Topeka Grocery and convenience store owners pushed Kansas legislators on Tuesday to allow their businesses to sell full-strength beer, wine and liquor, hoping their economic arguments will overcome both opposition from liquor store operators and the state's dry heritage.
The Senate Federal and State Affairs Committee began hearings on a bill to permit grocery and convenience stores to start selling full-strength beer and wine Jan. 1 and to phase in liquor sales by 2015. State law allows them to sell only "cereal malt beverage," also known as "weak" or "low-point" beer.
Grocery and convenience store owners have wanted to sell full-strength beer for years, but loosening up state law to allow them has been a quixotic quest in a state well-remembered for Carrie Nation's saloon smashing. Critics of this year's bill also argue that it favors big, out-of-state retail chains over family owned liquor stores.
But backers of such changes appealed Tuesday to the free-market instincts of the Republican-dominated Legislature and promised that looser liquor laws will create thousands of new jobs and boost tax revenues for a state that must close a projected $492 million budget shortfall. Several witnesses also said the bill would help save struggling rural grocery stores.
"This is a lifeline," said Jim Puff, the owner of a steak house in Maple Hill and a grocery store in Alma, both west of Topeka.
Trade associations for Kansas grocery and convenience store owners have formed a new group, the Coalition for Jobs and Consumer Choice. It includes chains such as retailer Wal-Mart Stores Inc. and Tulsa, Okla.-based QuikTrip Corp.
Opponents created their own group, Keep Kansans in Business, reflecting concerns from liquor store owners that they'll be driven out of business.
"I don't believe it's going to increase any jobs overall," Rick Daugherty, the owner of a Wichita liquor store, said after Tuesday's hearing. "We know that if this happens, a number — anywhere from a third to a half — of liquor stores are going to close."
After hearing Tuesday from the bill's supporters, the committee planned to take testimony Wednesday from opponents. Chairman Pete Brungardt, a Salina Republican, said he hopes to have the committee debate the measure and vote on it early next week.
Kansas remains one of five states preserving legal distinctions between full-strength and weaker beer, along with Colorado, Minnesota, Oklahoma and Utah, according to industry sources. In Kansas, "cereal malt beverage" is beer that is 3.2 percent alcohol or less by weight.
Under the bill, liquor stores would continue to hold special licenses allowing them to sell liquor, along with full-strength beer and wine.
The number of such licenses, now 766, couldn't increase statewide from July 1 through Dec. 31, 2014. A grocery or convenience store could obtain one in that period only if a liquor store closed or sold its license, but after Jan. 1, 2015, the state could go back to issuing an unlimited number of licenses.
Supporters of the bill said those provisions will give liquor store owners a chance to cash out or to adjust to the coming changes — perhaps by becoming convenience stores themselves.
"This is going to allow them an opportunity to become entrepreneurial," said Mike Moon, who owns a grocery store in his hometown of Osawatomie and another in Humboldt, in southeast Kansas.
Supporters of the bill also touted a recent study by Art Hall, executive director of the Center for Applied Economics at the University of Kansas. It said more than 300 liquor stores would go out of business, but added that the loss of stores and jobs would be more than offset by an increase in grocery and convenience stores. The study projects a net gain of more than 15,000 jobs, though Hall told the Senate committee the full transition could take a decade.
But opponents of the bill are skeptical, and Keep Kansans in Business has posted a review of Hall's study online by Lawrence economist David Burress, who did research at the University of Kansas for two decades. Burress described Hall's work as lacking validity, adding that it fails to deal with economic harm caused by shifting from businesses owned by local residents to national chains.
As for liquor stores adapting by becoming more like convenience or grocery stores, Tom Kessler, who owns a Wichita liquor store, said after the hearing that he doubts he has room for new products.
His wife, Rachel, said: "If we had wanted a convenience store, we would have purchased one."