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Archive for Saturday, February 5, 2011

Liquor statistics

The economic picture being painted by retailers who want to extend liquor sales to grocery and convenience stores in Kansas may not be as rosy as it seems.

February 5, 2011

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Proponents of changing Kansas liquor laws to allow liquor sales in Kansas grocery and convenience stores are presenting some figures that are pretty attractive to a state in need of jobs and tax revenue.

A coalition of retailers, including the Walmart, Hy-Vee and QuikTrip chains, is making its case for such a change by contending that it would generate more than 12,000 new jobs in Kansas while adding $216 million in wages and $72 million in new tax revenue for the state.

Opponents of the bill say those numbers are exaggerated, but the proponents, known as the Coalition for Jobs and Consumer Choice, didn’t just pull their figures out of the air. They came from a study conducted for the group by Kansas University’s Center for Applied Economics.

The 16-page report carefully supports its claims with a variety of data that leave some room for questions.

Although the report concedes that the change would eliminate about 341 liquor stores and 1,154 jobs in Kansas, that number would be offset by an increase of 116 grocery stores with 3,987 jobs and 449 convenience stores with 9,349 jobs. And the new jobs would pay better and contribute more to the state economy.

The report arrives at these figures by comparing the per-capita number of liquor, grocery and convenience stores in five states like Kansas with “restricted” liquor sales to the number of stores in five “unrestricted” states like Missouri and Nebraska. The report found there are more grocery and convenience stores per capita in the unrestricted states and, therefore, concluded that its sample “provides clear evidence that the market supports more grocery stores and convenience stores than specialized liquor stores when the market is deregulated.” The statistics may support that claim, but it’s a pretty shaky basis on which to promise that changing state liquor laws will bring 116 new grocery stores and 449 new convenience stores to the state.

The report also addresses how changing the liquor laws could produce more alcohol-related taxes without raising alcohol consumption in the state. This contention rests heavily on shifting more alcohol sales back to Kansas from border states, such as Missouri. The report looks specifically at the Kansas City metropolitan area, which has 48 grocery, convenience or liquor stores on the Missouri side within a quarter mile of the Kansas border.

Granted, allowing liquor to be sold in grocery and convenience stores on the Kansas side might be a convenience for some, but it won’t address the tax issue that will keep many of those sales in Missouri. Missouri charges an excise tax of $2 per gallon on liquor, while Kansas charges an excise tax of $2.50 plus an enforcement tax of 8 percent on packaged liquor.

While the statistics in the KU report aren’t wrong, they may not tell the whole story. The companies that commissioned the report have an obvious financial interest in a legal change that would allow their stores to sell wine and liquor. The losers in this equation would mostly be small independently owned liquor stores across the state.

Maybe the change would be a good financial deal for the state, but it’s probably not quite as good a deal as the coalition and its report contend. Kansas legislators need to look beyond the rosy predictions.

Comments

grigori 3 years, 2 months ago

SHOwss youa ll whuaet yodu know about liqor! Haha I sesf drinking as a good thign cause you dont getits cause yaour just hating the liqwoer sTOres.

Youknow sometihgn thoguh?<< ITs ofkay, cause I love youu and I think yoeur sexxy

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sr80 3 years, 2 months ago

i remember when you couldn't buy booze on sundays in kansas, it was a sunday ritual to drive over to mizzery to buy booze. time to make the change. time is a wasting away.

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sr80 3 years, 2 months ago

i remember when you couldn't buy booze on sundays in kansas, it was a sunday ritual to drive over to mizzery to buy booze. time to make the change. time is a wasting away.

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oneeye_wilbur 3 years, 2 months ago

So, the writer at the JW questions the companies that request the "study". Gee, that sounds so locally familiar with studies being questioned.

J/W why is that you don't question the validity of local studies commissioned by the commission and to date the Retail Study.

More wasted money on studies to employ those who perform the study. Paperwork, all eventually going to a shredder.

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langston76 3 years, 2 months ago

Be on the lookout for a well-reasearched, neutral study this week that indicates that study claiming all these benefits are not accurate.

www.keepkansasjobs.com

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Healthcare_Moocher 3 years, 2 months ago

Kansas would loose huge amounts of money. Who is to say that Walmart/Sams would not purchase Corona products on the Texas border and place them into their distribution chain, then send any profits to Arkansas? Same with Sam Adams in Boston.

If anyone believes all the new job crap, well, Grocery stores only merchandise their own products. All products from Lays potato chips to Wonderbread are placed on the shelf by people other than those from the grocery stores. Does anyone really believe that when a small liquor store with 8 to 10 employees is ran out of business by the grocery/convienence store selling liquor or beer at 1 cents over cost will hire 8 to 10 employees to manage those products?

There is not one of the groups wanting the laws changed that is headquartered in Kansas.

A real problem is with 18 year old clerks at these places. Another real problem is with the security of these products. It is very much easier to steal from a grocery store than it is from a liquor store and if these products are kept in liquor stores, the availablilty would favor all those who desire to limit underage drinking.

There are no good reasons for this bill to go through, unless you are one of those who support corporations rather than the small businesses. This is no different than those who cry that Walmart will put small businesses out of business.

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texburgh 3 years, 2 months ago

Here is how Art Hall and the Koch-endowed Center for Applied Economics does research: First, write the conclusion, then pick facts which support that conclusion, finally if you don't have enough facts make some up.

Their study on the sales tax increase was done for the Kansas Policy Institute (Koch's Kansas "think tank") and American's for Prosperity (Koch's "grassroots" organization). They found that the 1 cent increase would devastate the economy and cost tens of thousands of jobs. In fact, since the increase, the Kansas unemployment rate has declined and the economy is in a slow recovery.

So it's no wonder that Hall would "create" a study to support the desires of his corporate handlers. The only real fact in the study is the part that says independent liquor stores would go out of business. That would probably happen to Alvin's if the HyVee next door were permitted to sell all the product available at Alvin's.

Personally I could care less if the law allows supermarkets to sell liquor. It would be more convenient. But a better reform of our alcohol laws is to get the state out of regulating where the retailers get their product. The state keeps such a tight control over product that our liquor stores can't compete when it comes to selection with their neighbors in Missouri. It's not just the tax difference; it's the selection difference.

Isn't it time Kansas dropped the last of its prohibition era regulations?

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speakmymind 3 years, 2 months ago

I am very much in support of allowing grocery stores full access to liquor. The end result is a better experience for the consumer. I can purchase liquor while at the grocery store and we should see lower prices due to an increase of purchasing power for a large chain vs a single liquor store. Grocery stores will also have a larger selection of product. The consumer wins in this deal!

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Richard Heckler 3 years, 2 months ago

I say leave it alone. Let the small business people stay in business. The motivation by big business people is selfish!

If these stores want in the liquor business open up liquor stores. HyVee Leawood has a store a few blocks from one of their stores on State Street.

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Scott Morgan 3 years, 2 months ago

increase of 116 grocery stores with 3,987 jobs and 449 convenience stores with 9,349 jobs.

If a few of those grocery stores could prosper in rural areas currently not served by a store, well I'll drink to the new law.

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