April 16, 2017
Topeka Grocery store and liquor store owners are now waiting for Gov. Sam Brownback to decide whether he will sign a bill that would make the biggest change to Kansas liquor laws in the last 30 years.
It would, for the first time in Kansas, allow grocery stores to sell "strong" beer, or beer that contains up to 6 percent alcohol by volume.
At the same time, it would also allow liquor stores to sell cigarettes, chips and other items such as mixers, meaning their customers could buy both gin and tonic, or vodka and soda, at the same cash register.
And although the casual observer might not see why that's a controversial idea, it is actually a huge victory on the part of grocery and convenience stores who have spent years trying to get legislation to break the retail liquor stores' exclusive control of the package retail liquor market in Kansas.
It also may spell the end of what's known as "3.2 beer," or cereal malt beverage, which is currently the only kind of alcoholic beverage that grocery and convenience stores are allowed to sell.
"This is a decades-long battle," said Jessica Lucas, a lobbyist for a coalition of grocery and conveniences stores that pushed for the bill.
The history of 3.2 beer dates back to the Prohibition days in Kansas. Even after passage of the 21st Amendment in 1933, which ended Prohibition at the national level, Kansas continued to ban the production, sale and consumption of "intoxicating liquor" for another 15 years.
But in 1937, lawmakers passed a bill defining beer with an alcohol content of 3.2 percent or less by weight as "cereal malt beverage," or CMB, excluding it from the definition of "intoxicating liquor."
Many other states that still had "dry" laws did the same thing. And in Kansas, because CMB was not an "intoxicating liquor," it could be sold to people as young as 18.
But in 1984, Congress passed the National Minimum Drinking Age Act, which, among other things, reduced federal highway aid by 10 percent to any state that did not have a minimum drinking age of 21.
At that point, Lucas said, many states simply repealed laws that treated 3.2 beer differently from regular beer, but Kansas did not.
In 1986, however, Kansas voters did approve a constitutional amendment allowing the sale of liquor by the drink in bars and restaurants, ending the state's decades-long ban on "open saloons."
Since then, the demand for 3.2 beer has been dropping steadily, both in Kansas and nationally.
"For the last 10 years, sales of CMB have declined," Lucas said. "While some people still buy it, fewer people are buying it. And there are fewer products to sell because manufacturers have reduced the amount of 3.2 beer they produce."
Sheila Lowery, spokeswoman for the Hutchinson-based Dillons grocery chain, said she couldn't disclose how much 3.2 beer those stores still sell. But she said the push for change has come from customers.
"So many of our customers are interested in craft beers, which we're currently unable to sell under current legislation," Lowery said.
Currently, strong beer, wine and distilled liquor in package form can only be sold in Kansas through retail liquor stores, which have their own lobbyists in the Statehouse who strongly defend their turf.
The laws on retail liquor stores are also complex. For one thing, they can only sell beer, wine and distilled liquor. To sell mixers, cups and other items, they have to establish a separate business, or "party shop," which may be attached to the liquor store but which has a separate entrance and separate cash register.
That restriction would go away if Brownback signs the bill. But liquor stores would still be limited to earning no more than 20 percent of their total gross sales from nonalcoholic product, excluding cigarettes and lottery tickets.
P.B. Patel, who owns Roy's Wine and Spirits at Sixth and Wakarusa, across the street from a Dillons store, said that even with the ability to sell cigarettes and other items, he expects the law will cut into his profit margin.
"I think, typically, beer is about 50 percent of the gross daily sales at an average store," Patel said. "I am an average store. Even though the profit margin is a little lower on beer than it is for spirits, this will put a damper on our business."
Patel said he does expect to make room in his store for things like candy, chips and other items that he would be able to sell, but he doesn't expect that will make up for the loss of revenue he'll see when people can start buying beer at a grocery store.
"It will be damage control, basically, but I don’t think we’ll fully recover," he said.
Brownback has not indicated whether he plans to sign the bill. It was delivered to him on Friday, which means he has until Monday, April 24, to sign or veto it.
"We are hopeful that the governor will sign it, but, like any bill, we have to wait through the process," Lucas said. "We haven’t received any indication that he wouldn’t sign it. We are anxiously awaiting his signature."
Originally published at: http://www2.ljworld.com/news/2017/apr/16/strong-beer-may-soon-come-kansas-grocery-stores/