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Monday, February 04, 2008

Annual battle between groceries, liquor stores under way

Every year legislation is introduced to try to protect members of the Indiana Association of Beverage Retailers — that is, liquor stores — from competition from retailers licensed as drug, grocery and convenience stores, and this year is no different.

H.B. 1118, a massive, 79-page bill containing 39 sections, passed the House 73-19 and now goes to the Senate for consideration. In a nutshell, the bill would define a grocery store for alcoholic beverage sales,reduce grocery store quotas, mandate segregated sales areas for liquor displays in drug stores, require that clerks in drug, grocery and convenience stores be licensed, raise the age for clerks from 18 to 19 years of age, and require drug, grocery, and convenience store clerks to take alcohol server training.

Proponents of the bill piously insist that all they are trying to do is help keep the eeeevil alcohol out of the hands of minors, and to prevent stores that sell beer and wine out of neighborhoods that don't want them. This reasoning is a total sham, but does help recruit useful idiots to support the Indiana Association of Beverage Retailers’ cause.

The fact is, the overwhelming majority of violations are committed by licensed premises — that is to say, liquor stores and bars, whose employees must be issued permits by the Indiana Alcohol and Tobacco Commission. Very few if any violations are reported at drug, grocery and convenience stores. (I waded through several months of reports at the Indiana Excise Police Web site and didn't find any, but I didn't read the reports for every month of every year, so I could have missed something.) As far as keeping stores that sell alcoholic beverages out of neighborhoods goes, there are plenty of ways to handle that on the local level already.

Here's the crux of the biscuit: Liquor stores don't like it that they're losing sales to such places as Village Pantry, Kroger, Trader Joe's, Target, Marsh, Sam's Club, Costco, Cork & Cracker, Grapevine Cottage and other retail establishments that are licensed to sell alcoholic beverages by virtue of their grocery store or pharmacy licenses. The ability to open with a grocery license has enabled many small retailers all over the state to get into business without having to purchase the type of expensive permit (upwards of $150,000) that liquor stores must have to sell beer, wine and liquor. These establishments open as gourmet groceries, though the majority of their retail space may be devoted to wine and beer.

An insidious feature of this bill is that it would grandfather in existing businesses that operate under the current law, while making it difficult or impossible for any new, similar businesses to be established. The value of the permits of grandfathered businesses would rise dramatically if H.B. 1118 or a similar bill becomes law, so the owners of those types of businesses might be less inclined to object to a measure that would increase their own net worth and freeze out any potential future competition.

Who would lose if this bill becomes law? Consumers, of course, as well as anyone who has the dream of opening his or her own small business that sells wine or beer.

If this bill becomes law, the winners will be the package liquor store industry and LMV Consulting, the lobbying and public relations firm headed by John Livengood. (Interestingly, one of LMV's other clients is Monsanto, the company that produces bovine growth hormone, or BST. Monsanto has been behind efforts in several states to make it illegal to label dairy products as "Artificial Growth Hormone Free." Such a bill was introduced in the Indiana House of Representatives this session, but reportedly has died — see the bottom of the Feb. 4 post at Feed Me Drink Me — from lack of support. That doesn't prevent an unrelated bill from being stripped and having the identical language inserted before the end of the session, though.)

Should you happen to be one of those people who likes being able to buy wines and beers at groceries and thinks that competition is a good thing, you might want to contact your State Senator and let him or her know that you oppose H.R. 1118.

UPDATE: HB 1118 is expected to get a hearing in the Senate Commerce Committee between now and Feb. 24th.

FULL DISCLOSURE: I work part-time at a wine shop that operates under a grocery license.
J. Silverheels Gray, 10:25 AM

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