Archive for Tuesday, February 25, 2014

Lawrence liquor store owners oppose push for groceries to sell more alcohol

February 25, 2014


Brian Fadden, owner of  Parkway Wind and Spirits at 3514 Clinton Parkway dusts off some bottles on Monday February 24, 2014, preparing them for the shelves.

Brian Fadden, owner of Parkway Wind and Spirits at 3514 Clinton Parkway dusts off some bottles on Monday February 24, 2014, preparing them for the shelves.

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."


Nick Gemas 3 years, 12 months ago

It's time for the state of Kansas to get with the program and allow retail liquor and food to be sold in the same establishments. The bill gives some concessions to the liquor stores (by allowing them to expand the products they sell). The liquor stores will survive, and the new competition (sharing potential customers with area grocers) can only, in the end, benefit consumers.

William Enick 3 years, 12 months ago

It would be interesting to see how much cash Dillon's & Hy-Vee has had to invest in lobbying and who that cash went to. It's been hard for me to find out. Anyone know? Jessica says Kansans are traveling out of state to buy groceries & alcohol in one place. She better do better "bull" than that or she's gonna lose her job. What needs to happen? Liquor stores need to be free to sell anything they want..including fire arms. This should have been accomplished YESTERDAY. End of story, close your browser.

Ron Holzwarth 3 years, 12 months ago

It is absolutely amazing that California has been able to survive for so many years, considering the fact that all types of liquor are sold in grocery stores there, and have been for decades.

John Graham 3 years, 12 months ago

It is a shame for business owners that this or some similar bill will become law in the near future. People that have risked their money to buy a business and worked hard to make it a success will overnight see their investment become worth a mere fraction of what it was before the law was passed. Their businesses will be worth nothing more than their inventory. Many will lose their business and livelihood in the name of customer convenience. I wonder how many people in favor of this bill would be happy to have their lives potentially ruined in such a manner. Funny how some people in Lawrence are against Lowe's coming to town for fear it could hurt local mom and pop businesses that have been here for years yet don't care that many mom and pop liquor stores will become essentially worthless overnight when this or a similar bill becomes law. Where is Lawrence's famous outcry for the local business owners? Where is Lawrence's famous outcry for the small guy? I guess maybe the ease of buying a jug of wine trumps many local families having their lives turned upside down.

By the way, I do not own a liquor store nor do I know anyone who does. I just feel sorry for the multitude of small business owners in this state that will have their lives significantly damaged if this bill becomes law. In addition to seeing their investment that they plan on using for retirement become essentially worthless overnight, they will also lose their job and weekly paycheck. Who among us would like to have such a thing happen to them?

Matthew Herbert 3 years, 12 months ago

It's a free market economy friends...if you can't survive without a monopoly, (or a government bailout) you're in the wrong business. We should be legislating to free the market to the consumer's advantage. In a world where I can buy cigarettes and beer at Dillons, There is no logical reason to oppose liquor in grocery stores.

John Graham 3 years, 11 months ago

I hope then you are not one of the people in Lawrence against big box stores such as Lowe's.

Matthew Herbert 3 years, 11 months ago

I 100% support Lowe's coming to Lawrence. I was appalled when the city rejected their ability to come to 6th and Wakarusa because it might "devalue" the neighborhood....which apparently the Burger King and Taco Bell don't.

Andrew Dufour 3 years, 11 months ago

There is a reason to oppose it actually. The fear I have is that grocery stores are not going to have the beer (wine and liquor too but I'm a beer guy) variety that liquor stores have. Liquor stores are able to carry a wider variety because they make up a lot of money selling cases of beer. If everyone starts getting their cases of beer at grocery stores rather than going to a liquor store the stores very well may close and if they close you can say bye bye to variety.

St. Joseph MO is a great example, hyvee can sell liquor there and there isn't a single liquor store of any size in the city, ergo the options for good beer/wine/liquor is pretty must nonexistent.

Wayne Kerr 3 years, 11 months ago

Right, a grocery store selling alcohol is going to have limited options. That's exactly why you would shop at a liquor store, because they have a larger selection. If you're a true connoisseur of wine or beer you wouldn't be shopping at a grocery store. It's the greater variety offered at the liquor store that would keep them in business.

Matthew Herbert 3 years, 11 months ago

typically at liquor stores beer has the lowest mark-up of all of the inventory. But hey, when have facts stopped argumentation.

Andrew Dufour 3 years, 11 months ago

That's not the point I was making. My point was that liquor stores could get into real trouble with staying open if they lost all of their "case" business because people just picked it up at Hyvee instead.

Matthew Herbert 3 years, 11 months ago

then how do liquor stores stay in open in states that allow alcohol to be sold in grocery stores? What makes the alcohol market in Kansas so much different than the alcohol market in Alabama? Arizona? Arkansas? California? Connecticut? Florida? Georgia? You get the idea....the list goes on and on. We are the exception, not the rule.

Greg DiVilbiss 3 years, 11 months ago

It is NOT a free market economy and that is the point. If it were corporations would not need subsidies. This is about Kansas making a bad decision in the past....not allowing the free market and now that they have done that protecting those that bought into that system. To make a change now, will put people out of business, it WILL take the profits right out of your neighborhood (where the liquor store owners live) and send it right out of town. Let's see HyVee-Iowa, Wal-Mart - Arkansas, Dillons - Ohio and countless other places. Trust me I am a committed Libertarian yet I also do not want to screw people, just because of past bad mistakes by the Kansas Legislature.

Matthew Herbert 3 years, 11 months ago

a similar argument was made to uphold slavery - "removing it destroys an economy built on prior legislative mistakes"

If we accept that a law is pointless, we remove the law. As a committed Libertarian you should get that principle more than anyone else.

Beator 3 years, 12 months ago

I am guessing, liquor stores in "food deserts" would see minimal reductions in sales.

John Graham 3 years, 11 months ago

I do not know how liquor licenses work. I doubt the license dictates the size of inventory or amount of sales. If not then freezing the number of liquor licenses will not protect the current liquor store owners. There are many more liquor stores than grocery stores and Walgreens/CVS. So a few liquor store owners could sell their licenses but once each grocery store and Walgreens/CVS had one license, the rest of the licenses would have no buyers. Who would pay top dollar for a license that allows you to try to sell a product against a company that can live with smaller profit margins than you? Also since each grocery store would only need one license, there could well be a glut of available licenses as current owners try to salvage some of their investment. This glut of licenses would make them cheap for the grocery store to buy one.

Chris Jeter 3 years, 11 months ago

I'm all for passing this bill. At the same time the liquor stores need to be able to increase their inventory and do away with the stupid distribution laws we have in this state. Allowing those stores to be able to carry all the specialty/craft items they want will be key to their success in the future. There are plenty of states with similar laws on the books, MO for one and that still have liquor stores all over the place.

Julius Nolan 3 years, 11 months ago

Think the laws need to be changed to allow all beers and wines to be sold in grocery and convenience stores, but not spirits. And liquor stores should be allowed to sell mixers, ice and snacks of all kinds within the store. And stop the stupid, price fixing distribution system.

Phil Minkin 3 years, 11 months ago

Locally owned liquor stores are one of the last vestiges of small ("mom and pop") businesses in Ks. I live right around the corner from a "neighborhood" liquor store. Jeff Jensen has contributed to neighborhood projects, knows and meets neighborhood needs and provides his personal expertise when asked. This won't be available if he is forced to change his business model or even worse cease to exist. Furthermore, he is aware of neighborhood concerns and knows when not to serve people who are known trouble makers. Let's not change a system that has social, as well economic , value.

Jim Slade 3 years, 11 months ago

No one is forcing him to do anything. If he can't compete in a free market, then he shouldn't be operating.

Mark Kostner 3 years, 11 months ago

The liquor stores are right. I used to live in Las Vegas and in that land of 24 hour liquor there were virtually no liquor stores or drug stores. Liquor was concentrated at groceries, mostly chains, Walmart & Target, CVS & Sav On, Sams Club & Costco. On the other hand, as a consumer it's more convenient. When I was back there at the holidays I picked up my liquor at the Costco on the Missouri side which has laws more like California where I live now. California does have lots of liquor stores because they are set up like convenience stores and delis.

Leslie Swearingen 3 years, 11 months ago

"...knows when not to serve people who are known trouble makers." How is this even legal? How does he have the right to refuse service to someone?

I am amused by those who would drive miles and miles out of town for the convenience of getting booze and food in one store instead of going to a grocery store here in Lawrence and then to a liquor store.

I agree with Ron, I have lived in California where they sell liquor in the supermarkets and it does not seem to have altered anything. Go to Target and check out what they have to offer, you might be surprised.

Rick Masters 3 years, 11 months ago

So bartenders should never cut off a customer? It's the same idea.

Phil Minkin 3 years, 11 months ago

I guess you have never been to a bar where bartenders have a legal obligation not to serve patrons the deem drunk, or people being barred if they have previously been involved in altercations.

Jonathan Fox 3 years, 11 months ago

Let me get this straight. We want to systematically put hundreds of liquor stores out of businesses, put thousands of people out of work, create a huge new expense by having to quadruple the Alcohol Beverage Control (ABC) budget, sacrifice sales tax income, and send more money out of state to Walmart, HyVee... All for the sake of not having to buy gin and tonic at two separate locations?

Sorry, totally not worth it.

Oh and stop calling it a monopoly, there are way too many liquor stores in town competing against each other to be able to call it a monopoly.

Chris Bohling 3 years, 11 months ago

I don't think this would put big liquor stores like Cork and Barrel out of business because they would have a significantly better selection, but I do think that they would have to raise prices for their specialty items in order to make up for fewer sales of "basic" items.

I.E., right now Cork and Barrel can sell a fancy beer like Rochefort 10 for $6 a bottle because they make up the difference by selling 1000 bottles of cheap gin. In Illinois and other states where you can buy cheap gin at the grocery store, that bottle of Rochefort 10 costs $10.

From a purely selfish viewpoint as a beer snob I don't like this.

Munchma Quchi 3 years, 11 months ago

Having lived in states where grocery stores were allowed to sell proper beer and liquor, I can attest to the fact that the "Liquor Store Industry" does not suffer in any obvious way as a result. That said, the people of Kansas are not stupid and presumably knew what they were getting when they elected an ultra pro-business/free-market legislature and executive to run the state. You get what you vote for. If you, and your banker, and your accountant, and your janitorial staff are going to lose work as a result of this... well, you all should have thought about that when you went (or didn't bother going) to the polls.

Becca McMaster 3 years, 11 months ago

How is there currently a "monopoly"? The current law is specifically designed to prevent monopolies because history has shown through out time that the ability to control alcohol consumption is a power the government should not relinquish to a profiteer.

There is no "monopoly" under the current licensing law for retail liquor stores. It is impossible for any individual to control or "corner" the retail market because the law limits one license per individual or LLC.

It is the "no corporations and no multiple license" language that the supermarkets want to remove! They are attempting to remove the original statutory protections barring monopolistic market control and the attendant predatory practices.

Does it bother those of you supporting this market-grab that these non-resident mega-corporations are lying to you about a current "monopoly"; that they are "pushing your buttons" regarding the so-called "free market" because they know they can get away with lying about current law?

These mega-corporations comprehend the market power they will gain and consolidate if they can eventually manipulate the national market price of the only consumer product controlled by constitutional amendment: regulated both by the U.S. Constitution and by all 50 state constitutions.

Think about the significance of that fact before you assume that liquor should be sold just like Kleenex and cookies and, therefore, willingly cede the national and state alcoholic liquor markets to a very few mega-corporations; especially as they continue to merge and grow ever more powerful.

Seth Peterson 3 years, 11 months ago

Doh, someone doesn't understand what the word monopoly means.

Ryan Shumaker 3 years, 11 months ago

So lower prices are bad for the economy? If so, we should just overcharge for everything that way we get more sales tax revenue!

Betty Bartholomew 3 years, 11 months ago

I'll put in another, "Having living in California, there were plenty of liquor stores in spite of..."

Sometimes you just want to get your liquor and get out without having to wade through the rest of the store (and usually the liquor was at the back of the grocery store precisely for this reason), and sometimes you want to grab a bottle of wine to make marinara without having to make a separate trip. It seemed to even out.

I think the majority of patrons at the liquor stores here would continue to go to those liquor stores and those who infrequently buy alcohol and/or don't buy it if it requires a special trip probably won't cause much of an economic dent for the liquor stores.

Richard Heckler 3 years, 11 months ago

"It is NOT a free market economy and that is the point. If it were corporations would not need subsidies." AGREED

Corporations do NOT NEED SUBSIDIES they love subsides. Local government live in fear that if local taxpayers are not forced to pay... the local corporations will not build structures which is not true.

Once preferential tax dollar agreements expire most corporations leave town or come back begging for more or both. It is a fruitless venture for local taxpayers.

I do not know why commissioners would want to make decisions that could so many small business people out of work and provide Lawrence,Kansas with fewer choices. It seems to me that there are bottle shops quite close to most grocery stores so why change anything. Life is functioning well under the current system at least in Lawrence,Kansas.

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