Motivation. Alcohol policy liberalization is a contentious issue in the United States, particularly regarding whether grocery stores should be allowed to sell wine. This debate highlights a key tradeoff: consumer convenience, industry growth, and tax revenue on one side versus concerns about business closures on the other. However, little empirical evidence exists on the actual economic impacts of such reforms.

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What we do. We evaluate the effects of wine sales liberalization using state-of-the-art policy evaluation methods to inform both industry and policy discussions. We focus on three key outcomes: (1) the number of liquor stores before and after the reform, (2) employment levels, and (3) tax revenue. We find that allowing grocery stores to sell wine had no significant effect on the number of liquor stores but did increase excise tax revenue. Employment declined in the short term but recovered in the long term. The results of this study have been used by FMI to inform their members and have also served as a basis for policy discussions and legal debates on this issue.

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