Conservative Approach to Alcohol Sales

Conservative Approach to Alcohol SalesThe 18th Amendment to the U.S. Constitution prohibited the sale of alcohol, and the 22nd Amendment repealed the 18th and sent alcohol regulation back to the state level. With that came a myriad of varying laws and regulations, with some states taking a very conservative approach to alcohol sales.

Indiana may lead the way with the most restrictive alcohol laws on its books. We mentioned that state’s stringent restrictions on Sunday alcohol sales (see Sunday Alcohol Sales Part 2); however, other alcohol laws in that state are equally conservative.

Rich James, long-time state and local government and political writer, recently suggested that some Hoosiers are probably bemoaning the end of Prohibition in “Alcohol sales could leave the Dark Ages.” So conservative is Indiana’s approach to alcohol sales that there’s been a 67-year ban on the sale of alcohol at the Indiana State Fair with recent legislation finally proposed to end that ban. Until 35 years ago, you couldn’t even purchase a drink in a restaurant with a liquor license on Sunday.

Balancing Alcohol Sales

Although there are many who point to Indiana’s laws as out-of-date and no longer rooted in current reality, others worry about the inequity created between laws that regulate alcohol sales by package stores and big box retailers. Those retailers – including the likes of Kroger, Costco, and Wal-Mart – are not bound by the same laws that apply to package stores, according to’sErasing all restrictions on Indiana alcohol sales is a recipe for disaster.”

Package store owners are required to be residents of the state, locate the store within city limits, and hire workers who are older than 21. These same rules don’t apply to the large retailers.

A similar inequity exists in Washington. Small liquor stores are having a tough time competing with the big box counterparts. A number of these small liquor stores were in jeopardy of losing their liquor licenses resulting from delinquent tax payments. In the Associated Press’s “Washington taxes hit small liquor stores hard,” the situation resulted from an initiative approved in 2011 allowing the sale of alcohol outside of the realm of state-operated liquor stores.

As a result, the state lost millions in lost sales revenue and imposed new fees on spirits to help shore up the loss. There’s a new 17 percent licensing fee on all liquor sales on top of the 10 percent excise tax. The inequity occurs because Washington state law does not require the 17 percent fee to be added to the purchase price of alcohol. Hence, bigger retailers have the ability to spread that fee over every product they sell. Additionally, big retailers have the financial wherewithal to buy in greater bulk and get discounts from distributors.

There’s now a push from small liquor store operators for legislative changes toward a more conservative approach to alcohol sales… and this in a state that has legalized marijuana.