SALEM – Shoppers on Bend’s west side could soon buy their bread, bananas and bourbon without leaving a single grocery store – most likely Ray’s Food Place on 14th Street.

The Oregon Liquor Control Commission (OLCC) has tabbed Bend as one of the state’s first test sites to sell distilled spirits at urban markets under a ”liquor store within a store” concept.

The move is the most significant shift in years in the way the state controls alcohol sales. Some see it as a step toward deregulation of the booze business – and a threat to the livelihood of owners of the state’s 239 liquor outlets.

Today, only small grocers in rural areas such as Sunriver are licensed to sell liquor under the same roof as produce and meat. But in cities, shoppers have needed to visit a state-licensed liquor store to purchase the hard stuff.

Regulators approved the two-year experiment to see whether more convenient access to booze will be a hit with the public and lead to increased sales and increased state revenue, said Ken Palke, spokesman for the OLCC.

The agency will establish as many as six pilot stores.

The west side of Bend is considered an ”underserved market,” and it’s at the top of the list of places where the agency proposes to test supermarket sites, Palke said.

”We’re in serious negotiations with one of the markets there and we expect an agreement shortly,” he said.

Three westside supermarkets appear to fit the definition of a large supermarket under a temporary rule adopted by the agency; it appears that the Ray’s Food Place will house the new outlet, said store manager Chris Starling.

He said details were still being finalized and referred additional questions to the corporate office. Those calls weren’t returned Wednesday.

Palke said the OLCC wants to have the new Bend location – which would be the city’s fourth liquor retailer – running by October, he said.

Other underserved locales targeted by the agency include South Salem, Hillsboro, Gresham and the Gateway area in Eugene.

Customers won’t be sighting Jack Daniels or Jose Cuervo in the wine aisle, however. The rules call for stores to build a separate room that would be open only to adults and have a separate cash register, much like a bank would be a separate business in a grocery store, he said.

”In recent years, the OLCC has been moving toward well-lighted grocery store and strip malls because they are modern places where people like to shop,” he said. ”The supermarket test is in that vein.”

The pilot project came as a surprise to liquor store agents – some of whom are already pinched financially, said George Kuppler, owner of Oak Grove Liquor in Milwaukie and president of the Associated Liquor Stores of Oregon.

The state owns the liquor sold in Oregon, and licenses people to sell it. The state decides how much of the profit the dealers keep and that rate – 8.9 percent – hasn’t changed significantly in a decade, he said.

So stores are already dealing with tight margins at a time when leases, labor costs and electric bills are getting more expensive, he said.

And now, the state could change the playing field.

”Anytime a new store comes online, the next door neighbor is going to get some effect,” he said.

”The bottom line is that the state wants to get $1 million a year from the new stores. Even if 30 percent of that is new business, it means $700,000 is coming from the stores around it.”

Cheryl Stoddard, the licensed agent at the Redmond Liquor Store, said she doesn’t feel threatened – yet.

”I think it will end up being a pilot project in a few odd stores,” she said.

She doubts many large supermarkets will jump into the hard alcohol business because of the limits on profits.

Already, Fred Meyer stores have done the math and given the prospect a thumbs-down, said spokeswoman Mary Loftin.

”When they gave us the numbers we couldn’t figure out how it would be profitable,” she said.

In addition, alcohol sales would open the door to more legal liability and probably wouldn’t generate any additional customers.

Fred Meyer officials who spoke to liquor dealers found that many make most of their money from cigarettes and Oregon Lottery sales – and those are already available at Fred Meyer, she said.

But at Ray’s Food Place in Bend, manager Starling said a key benefit to selling booze could be more business for the rest of the store.

”You use existing space as a traffic flow builder,” he said.

The state agency says the pilot project isn’t a step toward total deregulation of the alcohol business in which any store can sell booze and put it on the shelf next to other groceries, Palke said.

But Kuppler said it could be tough to keep other big retailers out of the booze business if they discover a way to make it profitable or if they fear losing market share to competitors.

”They can’t afford to let traffic walk away,” he said.

The proposal also is causing some discomfort among activists who say easier access to alcohol will usher social ills and raises public safety concerns such as drunk driving and underage drinking.

”In every state where access has been made easier, the rate of underage drinking has gone up,” said Bill Deiz, spokesman for the Portland-based Oregon Partnership, a nonprofit that runs anti-drinking campaigns geared toward kids.

He said owners of small liquor stores make sure that teens are not waiting outside. ”But if liquor goes into the big chains, they won’t have that kind of due diligence.”

Oregon’s strict oversight of liquor sales dates back to the Prohibition era. It is one of 18 control states.

James Sinks can be reached at 503-566-2839 or at jamess@cyberis.net.