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Wine & Spirits

2013-02-01 09:40:59

Should Kansas' liquor laws change?

Q-The Kansas Legislature is considering a change to the state’s liquor laws that will allow liquor sales in “big box” stores. How will this affect the existing retail liquor stores’ Kansas consumers?

A-For the past decade, big box retailers and convenience store chains have aggressively lobbied the Kansas Legislature to change longstanding liquor laws to allow them to sell hard liquor, strong beer and wine in their respective establishments. The proponents of this legislation, working collectively under the moniker, “Uncork Kansas” suggests free enterprise demands this change. I am all for free enterprise, but there is a lot more to the story than the rallying cry of “free enterprise.” First of all, one should ask who is “Uncork Kansas?” It is a coalition of some of the largest corporations in the world: Wal-Mart/Sam’s, Koger/Dillon’s, Hy-Vee, Quik Trip and Casey’s, to name the major players. We have seen what these companies want -- total market share. We see it in small towns in our state and we also see it in big cities, where the local grocery store has gone by the wayside and will never return. These companies, in their never-ending search for margin and profits seek to exploit yet another business opportunity at the expense of small business men and women who have operated under more than 60 years of regulatory oversight and responsibility. In 2011, a study commissioned by these companies said that if their legislation passed, more than half of the state’s retail liquor stores would go out of business! Think about that for a minute. Why should you care? Well first of all, do you think it makes sense for the state of Kansas to go from approximately 750 retail liquor stores to more than 4,500? Yes, if every grocery store, convenience store and related business entity allowed to sell alcoholic beverages under their legislation sought a license, we would see more than 4,000 additional retailers in Kansas. Kansas liquor laws are very restrictive for a reason: To insure an adult-only product is sold in a responsible manner. In Kansas, a retailer can only own one store (and their spouse can own one, too). If the Director of the Division of Alcoholic Beverage Control finds a retailer to be violating the law, they can cause them to close for a period of days or forever. No such control will be given to the Director to deal with these large chains. If they are found to be selling in violation of Kansas law, they suggest they should only be restricted from selling liquor products for a period of days, not all products in their store. They also believe teenagers should be allowed to sell hard liquor products (18 year olds and older). In a retail liquor store, minors are not allowed to work and sell products (under 21 years of age). Profits from retail liquor dealers are spent and invested in Kansas, not sent off to Bentonville, Arkansas (Wal-Mart), Cincinnati (Kroger), West Des Moines (Hy-Vee), Ankeny, IA (Casey’s) or Tulsa (Quik Trip). Retailer liquor dealers hire the services of Kansas lawyers, accountants and related professionals. They buy supplies for their stores in Kansas and they sponsor local organizations like most small businesses do. Can you say the same about the companies that want to take over the liquor business in our state? In 2011, Kansas adopted some of the most stringent DUI laws in the country. Does it make any sense to follow this up by loosening the ability to access liquor products both legally and illegally through legislation that will produce an additional 4,000 liquor stores in Kansas? Shouldn’t an adult-only product be sold in a safe and responsible manner and not up and down the aisles of every grocery and convenience store in our state? Retail liquor dealers are all for competition and small business. Anyone who can qualify for a liquor retailer license is free to obtain a store. But no one, no matter how large their liquor store is can compete effectively with the Wal-mart’s of the world if they want the business… and once the competition is gone, they will control their relevant market like they do in so many communities in our state already. Proponents of this change say the current retailers can sell other products under their bill. That doesn’t work well for most retailers, who have stores that are sized for a retail liquor store, not to sell cigarettes, potato chips, bread, milk, pop and assorted items. Furthermore, many stores have purposely located next to these large retailers in order to provide a convenient location for customers to shop. Business decisions based upon more than 60 years of regulatory history. If these large grocery store chains are allowed to enter into the market and have retailers in their vicinity, it is a virtual certainty these stores will fail. Kansas has a 3-tier system for the manufacture, distribution and sale of alcoholic liquor products that has been carefully designed to insure compliance with Federal, state and local laws relating to the manufacture and sale of intoxicating liquors. Manufacturers cannot be licensed as wholesalers or retailers; Wholesalers cannot be licensed as manufacturers or retailers; and, retailers cannot be licensed as manufacturers or wholesalers. This structure insures maximum compliance with the state’s liquor control act and provides for an orderly market for sale. The proponents of these initiatives want the Legislature to consider their proposal as nothing more than a statutory imposition of free market economics on a generic commodity. That may be appropriate for the sale of bread and butter, but it is not appropriate for the sale and marketing of a product Kansans have demanded be carefully regulated in its manufacture and sale since 1948. The Legislature has made incremental changes in the sale of alcohol products to address the desire of the consumer, but these changes have been instituted within the 3-tier system. Proponents also want to eliminate the restriction on the number of stores a retailer can own – meaning each of their grocery stores can obtain a liquor license. Should Kansas go down that path, we can be assured the “Wal-Mart Model” will come to the retailing industry – fewer stores, larger and more predatory competitors and fewer choices for consumers. Allowing big box retailers to sell liquor won’t create jobs, but will rather cost thousands of Kansans their jobs and their livelihoods. It will increase access to liquor by our youth and it will result in profits leaving Kansas and going to the corporate offices of some of the largest corporations in the country. Changes to state liquor laws advocated by the big box retailers and convenience store chains should be rejected in favor of our current regulatory system for the sale of alcohol products that has served our state and its citizens well for more than fifty years. Support Small Business Retailer Liquor Dealers… we proudly support small business ourselves!