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Archive for Saturday, January 1, 2005

QuikTrip to pursue changing liquor law

Industry divided over allowing sales outside liquor stores

January 1, 2005

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The winds of change blowing through the Kansas liquor industry are strong enough to rattle the bones of Carry Nation.

The gusts started in 2003 with the advent of Sunday liquor sales in a handful of Kansas communities, including Lawrence. But powerful lobbyists now say that won't be the last change to the state's 1940s-era liquor laws.

The day when Kansas consumers can buy full-strength beer on Sunday -- or any other day of the week -- at a convenience or grocery store will soon arrive, predicted Michael Thornbrugh, an attorney and lobbyist for the QuikTrip chain of convenience stores.

"It is just a matter of time," Thornbrugh said. "The question is whether the state does it through the legislative process or whether we have to do it through the courts. The Kansas laws are just nuts. They're so backwards."

Stagnant sales

When cities started adopting Sunday sales laws, it was viewed by many as a step toward modernizing laws that had been largely untouched since the end of Prohibition. But now, several liquor store owners in Lawrence say the change in the law has the potential to do them more harm than good.

"If the city was going to vote on it again, I'd lobby against it," said Janet Durkin, owner of Glass House Liquor, 2301 Wakarusa Drive.

One reason for the change in heart is that a year's worth of sales data hasn't proven Sunday sales are profitable.

Data from the Kansas Department of Revenue show the state's liquor enforcement tax has not grown significantly in Douglas County since Lawrence began allowing Sunday sales in late September 2003. Collections of the tax grew by 3.8 percent in the first three quarters of 2004, when Sunday sales were in effect, compared with the first three quarters of 2003, when such sales were prohibited.

Current state law says individuals, not corporations, can hold a state liquor license. Chain liquor stores also are prohibited. An owner can operate only one liquor store, though a husband and wife can have two.

Differing views

Several liquor store owners said that increase reflected inflation and the city's population growth but not a surge in the amount of booze bought in the city.

"Sunday sales has done nothing to help our overall sales," said Ron Hassen, owner of Ray's Liquor Warehouse, 1215 W. Sixth St.

Sundays aren't slow days at liquor stores, but several operators said customers still buy the same amount of liquor but spread purchases over seven days instead of six.

That view isn't unanimous in the liquor store industry, though. Linda Vantuyl, owner of Linda's Liquor, 1540 Wakarusa Drive, said her store's Sunday sales were increasing on a regular basis. She said she noticed a lot of football fans on Sundays and wine drinkers seeking a bottle for a nice Sunday dinner.

"I think it is increasing sales because people before just didn't plan for it, and they were just out of luck," Vantuyl said. "Now they can just pop in."






'Can of worms'

Joe Schmidtberger, owner of Alvin's Wine and Spirits, 901 Iowa, said Sunday sales actually were a cost to his business because of employee salaries and utility costs for an extra day each week.

But he said he was more concerned about the law costing his business in the future. Schmidtberger said that if cities could exempt themselves from the state law prohibiting Sunday sales, they could exempt themselves from other parts of the law, including the provision that liquor only be sold in liquor stores.

"I think it has opened up a big can of worms," he said.

In a sense, the Kansas Supreme Court agrees. In a March ruling, the court upheld a lower court's decision that cities can exempt themselves from many parts of the state's liquor control act. That ruling, Schmidtberger thinks, is an invitation for convenience stores to get into the liquor business.

This is the first of two stories examining the possibility of change in Kansas liquor laws. Tomorrow, read about how the state's 1940s-era laws are affecting a Lawrence businessman.

Under current state law, only individuals, not corporations, can hold a state liquor license. Chain liquor stores are prohibited, too. An owner can only operate one liquor store, though a husband and wife can have two.

Schmidtberger said if the liquor sales were expanded, problems would follow.

"With the current system, it is very clear that I'm responsible for what happens in my liquor store," he said. "If I screw up and sell to a minor and he goes out driving and kills someone, the state has me on the hook. Who are you going to have on the hook in a corporation?

"They have lots of money, and money can solve lots of problems, but it can't solve them all."

'In a heartbeat'

QuikTrip's Thornbrugh doesn't buy that argument. He said corporations respected a fine as much as anybody else. And if a convenience store is habitually running a shoddy operation that sells to minors, there is an easy solution to that.

"Just revoke their license," Thornbrugh said. "We have no problem with that."

QuikTrip's days of simply talking about changing the state's liquor laws are numbered. He said the Tulsa, Okla.,-based corporation would begin actively seeking communities that have an interest in writing an ordinance allowing sale of full-strength beer in convenience stores. He said the company was not interested in selling actual liquor in its stores "at the moment."

"There is no question that cities have the ability to opt out of the state law," Thornbrugh said. "We would be willing to go to court on that in a heartbeat."

What's more, the company said it would be happy to help pay the legal bills of any city that wanted to take on the issue.

"Our patience ran out on this issue 10 years ago," Thornbrugh said. "We're getting really frustrated about it."

Two cities, Leavenworth and Edwardsville, passed ordinances in early 2003 that would have allowed full-strength beer sales in convenience and grocery stores. Both ordinances were rescinded after it became obvious they would embroil the cities in costly legal battles.

The convenience store industry chose not to use either of those cities as their test case.

"Those ordinances probably weren't as complete as they needed to be," said Bob Alderson, a Topeka attorney and lobbyist who represents Casey's General Stores, which also supports a change in state law. "But I think there are still forces at work on that."

Watching, waiting

Tom Groneman, director of the state's Alcoholic Beverage Control division, knows the issue will end up on his desk someday.

"Sooner or later, someone will try it," Groneman said.

He said he hoped state legislators would take action to prevent future problems. Cities are allowed to exempt themselves from the state law mainly because the state law has regulations that are applied differently to cities depending on their size. In legal terms, the law is not uniform. Generally, cities are allowed to opt out of any state law that is not uniform in nature.

Groneman said he hoped legislators would rewrite the law to make it uniform, which would make it more difficult for cities to exempt themselves from the regulations.

"It is creating an enforcement headache," Groneman said.

He's also closely watching a case that is before the U.S. Supreme Court involving the ability of winemakers to sell and ship their products to consumers across state lines. Groneman said if the court fully sides with winemakers, it could make it very difficult for the state to place meaningful controls on how, where, or by whom liquor is sold in the state.

"We're definitely interested in how they rule," he said.

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