The head of a group of Foodland supermarkets, Roger Drake, said liquor store operators were overreacting to his group's proposal to stock South Australian wines on store shelves.
The Australian Hotels Association and the Liquor Stores Association have taken a newspaper advertisement to argue wine sales from supermarkets would be bad for small business.
"This proposal will force the largely independent liquor retailers across the state to close or sack staff to survive," they said in a statement.
"These are the specialist wine retailers that currently support SA wine.
This proposal must further empower the national chains likes Coles and Woolworths to have even greater influence in the marketplace." Drake Supermarkets has been petitioning for public support to sell wine in South Australian supermarkets.
Mr Drake said his Foodland chain was only interested in stocking local wine, not beer or spirits.
"Foodland is committed to sell SA wines only ....
the legislation's not even in place or anything, it's up for consultation but if that's the legislation then let's put it there.
Let's clearly put it in there, SA wines only," he said.
Other supermarket retailers Coles and Woolworths already have substantial liquor interests and many of their liquor stores are adjacent to their supermarkets.
Wendy Bevan for the Liquor Stores Association argues supermarket chains already own many liquor outlets.
"Now Coles and Woolworths already own BWS, Vintage Cellars, Dan Murphy, Liquorland, First Choice - they've bought those licences and they'll now also be able to sell wine in their supermarkets so it's about increased market dominance, pushing out the smaller players," she said.