Yesterday, Ed Cooper, Vice President for Public Affairs of Total Wine & More made the case for giving consumers a seat at the table before the Alcohol Task Force. He reiterated the need to stop burdening consumers with unnecessary costs, and work towards establishing a more fair system of regulation.
Read his testimony in full below:
"Good afternoon. My name is Edward Cooper and I am the Vice President for Public Affairs and Community Relations for Total Wine & More, an alcohol beverage retailer with 159 stores in 20 states, including 4 in the Commonwealth of Massachusetts; in Natick, Everett, Shrewsbury and Danvers.
Thank you to Treasurer Goldberg, Executive Director Sacramone, Chairman Russell and the members of the Task Force for convening this hearing, and for the opportunity to testify today.
Our presence in Massachusetts has brought over 200 jobs to the Commonwealth. By company policy, the vast majority of which are full time with full benefits. This is not only unusual for the retail alcohol business – where the staff of most smaller independent retailers consists of owner/operators and mostly part-time employees – but runs counter to preconceived ideas of what it means to be a large national retailer. Additionally, we provide extensive education and training for our team members and opportunities for advancement within the company.
We provide our local store teams with decision making authority to seek out and purchase fresh, local products and we are proud to offer a wide range of craft and small batch beer, wine and spirits produced in Massachusetts.
Our commitment to our team members is just one way we distinguish ourselves.
We work hard to know our customers and actively participate in the communities we serve. We have already supported hundreds of charitable organizations in Massachusetts, including significant contributions made at our store openings -- to the Center for the Arts in Natick, Project Bread in Everett, Mechanics Hall in Worcester through our Shrewsbury store and to Northeast ARC in Danvers.
We are committed to our team members, we are committed to our communities, and we are most certainly committed to our consumers. It is on behalf of the consumer that I am pleased to offer today two suggestions for reform of the alcohol beverage industry in Massachusetts.
As an important lead-in to both of these proposals, I want to state definitively that Total Wine & More recognizes, supports, and intends to adhere to the Massachusetts regulation that alcohol not be sold below cost. As you have been aware from previous testimony, wholesalers make available to all retailers discounts for product bought in certain quantities. It’s a simple bulk buying discount -- retailers buy X amount of product over Y months and the wholesaler provides a discount for the purchase. Total Wine & More often qualifies for these discounts, which lowers our cost.
However, we are NOT currently allowed to pass this discount onto our customers, even after we have fully earned the discount, paid for the product, stocked the items on our shelves and started to sell that inventory of goods to our customers. So even though we paid a certain discounted price for the product, we are required by current Massachusetts law – as it has been recently interpreted – our customers will continue to pay an artificially inflated price, well above our actual cost.
That’s a bad deal for Massachusetts consumers.
But, there’s a way to fix this problem.
Distributors, retailers and regulators need to work together to formulate sensible changes to regulations and our own business processes to accurately calculate cost - in real time. Quite simply, if a retailer earns the discount it ought to take that discount when earned. If the current interpretation of the rule is allowed to stand, quite simply retailers will have to price artificially above cost, which harms Massachusetts consumers.
A second issue I’d like to raise is the use of retailer-backed coupons for purchase of alcohol, which are widely permissible throughout the nation. Already in the Commonwealth of Massachusetts, consumers can access coupons issued by the producers for redemption by mail. But alcohol retailers cannot establish loyalty programs or give coupons to our customers. This differential treatment among member participants in the three-tier system runs counter to the principles of equal treatment that are firmly embedded in MA alcohol beverage laws. It also imposes unnecessary barriers on consumers who desire greater convenience and easy access to prompt redemption of coupons.
In my written submission to the Task Force, I cited a number of studies that indicated a mutual benefit to both retailers and consumers through the use of retailer-backed coupons. They made two important conclusions:
First, at a time of challenges to the retail sector, coupons would inject an additional $80-85 million into local, brick and mortar sales that cannot be lost to online stores or other states. Therefore, retailer-based coupons can be a critical business tool to allow Massachusetts retailers to better compete with retailers in lower-cost states like New Hampshire. Second, the use of retail coupons benefits the consumer reducing their overall spending burden. It especially benefits lower-income consumers who the data show are more dependent on coupons for retail shopping.
Quite simply, the data show that coupons allow local retailers to gain more business and consumers achieve more savings. At Total Wine & More we have a relentless focus on providing our customers with great selection and service at low prices.
At our executive and board meetings, an empty chair is at the table representing our customers -- reminding our leadership to remain focused on the consumer. As you consider testimony and other input from all three tiers of this industry, I encourage this Task Force to retain a similar focus on behalf of Massachusetts consumers.
Thank you for the opportunity to present to you today, for the process you are undertaking, and I welcome any questions."