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Bar fight imminent as mom-and-pops battle big chains over booze

By   /   January 4, 2013  /   1 Comment

By Gene Meyer | Kansas Reporter

BOOZE WAR: Mom-and-pop liquor store owners who’ve dominated Kansas distribution since the state repealed prohibition inspired by Carrie Nation in 1881, now worry Big Retail will force them out.

FAIRWAY — Kansas, where legendary Emporia newspaper editor William Allen White once said voters “staggered to the polls every two years and voted dry,” is headed for another legislative bar fight.

Grocers, convenience store owners and the state’s most powerful business lobby, the Kansas Chamber of Commerce, are planning once again to ask Kansas legislators to allow grocery and other stores to sell wine, hard liquor and what’s known in the state as full-strength beer — anything above 3.2 percent alcohol.

The lawmakers reconvene Jan. 14.

“We’re still drafting a final bill and will have something ready later this month,” said Kent Eckles, the Kansas Chamber’s vice president of government affairs.

“Our goal has long been to allow the sale of full-strength beer, wine and spirits in grocery stores and convenience stores,” Eckles said. “We believe that would further free markets, competition and free enterprise.”

It will be the third such effort in as many years, and its prospects are uncertain. Kansas banned all alcohol sales until 1948 — some 15 years after the end of Prohibition — and forbade liquor-by-the drink nearly four decades after that. Nineteen of Kansas’ 105 counties are still dry.

Booze in Kansas can be sold legally only in bars, restaurants and  about 760 state-licensed privately owned liquor stores that follow strict rules on hours, prices, merchandising and other business practices. Kansas liquor retailers can sell only those products – and some lottery tickets that help fund addiction-abuse programs – but nothing else. The low-alcohol six-packs and wine coolers seen in the supermarkets are, in Kansas’ eyes, “cereal malt beverages” and somehow less intoxicating.

“It’s crazy,” said Tom Palace, executive director of the Petroleum Marketers and Convenience Association of Kansas, a convenience store trade association. “Liquor stores in Kansas can sell wine, but they can’t sell corkscrews. Convenience stores can sell corkscrews, but they can’t sell wine.”

Opponents warn that opening the state’s retail liquor market to grocers and convenience stores would devastate small business owners that American Beverage Licensees, their national trade association, says account for nearly 13,700 jobs that produce a $545 million impact on the state economy. 

Mom–and-pop liquor store owners would be hard pressed to compete with giants such as Walmart, the world’s largest retailer, or grocery chains such as Iowa-based Hy-Vee or Ohio-based Kroger, which have major presences in Kansas.

Opening grocery and chain-store retailers’ shelves to Kansas’ liquor markets would potentially add 15,000 jobs and as much as $350 million new wages into the state’s economy, economist Art Hall, director of the University of Kansas Center for Applied Economics, reported in a 2011 study that both moms-and-pops and the retailers use to press their arguments.

More than half of Kansas’ mom-and-pop liquor stores would be shuttered by the competition, though “their economic impact wouldn’t go away, it would be redistributed,” Hall told Kansas Reporter.

Shuttering Kansas’ small liquor stores would be devastating, said Amy Campbell, executive director of the Kansas Association of Beverage Retailers, the store owners’ trade association, in Topeka.

“Kansas is a small business state; 84 percent of its businesses employ 10 or fewer people,” Campbell said. “We are very disappointed that the Kansas Chamber or anyone would propose legislation that would put more than 300 of those businesses under.”

Plus, Kansas’ small liquor stores are extremely competitive, despite the virtual monopoly they have as group over the market, Campbell asserts.

“Anyone who wants can build a store across the street from an existing one, if they want,” she said. “If they meet state qualifications for a license and comply with local zoning codes, they will get a license.”

“Proponents want you to think that selling liquor is like selling pop or doughnuts,” she said. “It isn’t.”

Eckles, Palace and other advocates of the proposed change say their plans would benefit small store owners by allowing them to sell sodas, snacks and other non-alcoholic wares, including ice, that current law prohibits. Small store advocates say that’s no real boon because the owner of a typical 3,000-square-foot Kansas liquor store has fewer opportunities to expand offerings than, say, the proprietor of a much larger supermarket.

“But look what big chains did to small town grocers without alcohol,” said Whitney Damron, a Topeka lobbyist representing more than two dozen liquor store owners.

Nearly one in five grocery stores in rural Kansas has gone out of business since 2006, as bigger grocery chains altered buying habits of a dwindling population, according to one study by the Center for Rural Affairs in Lyons, Neb.

“Why should we expect it to be any different with alcohol?” Damron asked.

Because things change, said Palace, the convenience store association executive.

“Twenty years ago, the only place you could buy gasoline was at a convenience store or gas station,” Palace said. “Then grocery stores started selling gas. We learned to compete.”

Contact Gene Meyer at gene.meyer@kansaswatchdog.org

— Edited by John Trump at jtrump@watchdog.org

 

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  • http://www.facebook.com/marlene.bakken Marlene Bakken

    Well one thing’s for sure, those fighting against the anti-smoking agenda and smoking bans have been warning for quite some time, that the legislators in the pockets of big pharma and their objective of complete prohibition wouldn’t stop at smoking bans that shut down hundreds of thousands of businesses. ALL alcohol is next, right along with feel-good junk food. Even with this objective right on the tax exempt arm of J&J, the Robert Wood Johnson Foundation’s website, still people won’t believe it. It wasn’t on TV!

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