Archive for Wednesday, February 26, 2014

Kansas: Liquor store owners oppose push for grocery stores to sell alcohol

February 26, 2014

— Brian Fadden, owner of Parkway Wine & Spirits in Lawrence, says that if a proposed bill to allow grocery and convenience stores to sell wine, liquor and strong beer passes, he'll likely go out of business. But he'll at least be able to find another job.

If many of the thousands of grocery and convenience stores in Kansas get liquor licenses, the Kansas Alcohol Beverage Control office will have to hire lots of additional inspectors, he said.

"If I get put out of business, I'd be one of the first ones applying because they're going to need a bunch more agents to handle all these new accounts," Fadden said, adding that they can "barely get around" to visiting the 750 liquor stores in Kansas as it is.

Liquor store owners in Lawrence and elsewhere across the state are worried that House Bill 2556, which had a hearing before the House Commerce Committee last week, could put them out of business and hurt the state's economy by transferring profits to out-of-state corporations. Uncork Kansas, the consortium of grocery and convenience stores (notably Dillons and Hy-Vee) that is pushing the legislation, says the bill will make the state more consumer-friendly, preventing Kansans from having to buy their food and alcohol in separate locations.

In Kansas, a state with a long history of restrictive alcohol laws, grocery and convenience stores are only allowed to sell "cereal malt beverages" or beer containing 3.2 percent alcohol or less. Brewers specifically make the weaker beer for Kansas and the four states (Oklahoma, Colorado, Utah and Minnesota) with similar rules. Under the new proposal, grocery and convenience stores would be able to sell not only "strong" beer but also wine and hard liquor.

"Liquor stores have had it good. They have had a monopoly. They have had the government protecting their industry," said Jessica Lucas, spokeswoman for Uncork Kansas. "But what we're seeing is Kansans saying, 'We're not OK with this. We want the convenience, the choice and the cost savings that come from competition.' Competition is good because the consumer wins."

She argues that the law would help, not hurt, Kansas' economy by keeping consumers from traveling out of state to buy their groceries and alcohol in one place. She also says the legislation protects liquor store owners by not permitting any new liquor licenses to be issued for 10 years. That would allow the owners to sell the licenses if they wanted to get out of business, she said, though opponents worry that grocery and convenience would be the ones buying them. Grocery and convenience stores would be able to start selling regular-strength beer in 2017, wine in 2020 and spirits in 2024.

Alek Joyce, a 22-year-old Kansas University student, says if he wanted to make a gin and tonic, he'd have to get the gin at a liquor store then drive to a grocer to buy the tonic water (liquor stores aren't permitted to sell anything but alcohol and lottery tickets but, under the proposed legislation, would eventually be able to). "It's always seemed kind of backward that the two couldn't be sold in the same place," he said.

Though Joyce does worry about the law's effect on local liquor stores, he believes it is best for the consumer and what the free-market system is all about.

Christian Walter, owner of Myers Retail Liquor in Lawrence, said the law would hurt state tax revenues, by leading to lower alcohol prices, and, in turn, decreased sales tax receipts. He said the law's provision to allow 18-year-olds to sell booze would make it easier for minors to obtain it. And then there's the harm the measure would do the local economy, he added.

"My banker, my accountant, my janitorial staff would lose work. My (nine) employees would be out of jobs," Walter said. "This bill is awful for local business owners and good for the big corporations."


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