by Brad Klopfenstein
The Legislature is in session, so it’s time once again for the annual discussion on Sunday alcohol sales. I’ll try to frame the issue so that you have the ability to draw your own conclusions prior to giving you mine.
On one side, you have the grocery stores, drug stores, and big box stores like Costco and Sam’s Club. They argue that they are already devoting floor space to products that they could otherwise be selling, they are open anyway, and the prohibition on Sunday sales harkens back to old Blue Laws who’s time has long past. A small, but important nuance in the Indiana code limits grocery stores to only sell beer and wine. However, any store with a pharmacy is allowed to add spirits to that mix, which is one of the reasons that you have seen a dramatic increase in the number of supermarkets with pharmacies. Currently, these stores are only allowed to sell beer warm, but trust me when I say that they would love to be allowed to sell cold carryout beer. Most of these stores would fall into the category of large conglomerates, mostly headquartered in other states with a regional or national presence. Clerks do not have to be licensed to sell alcohol, and any person of any age is allowed in their stores and allowed to walk aisles with alcohol. Since Indiana does not have a definition of a grocery store, in most communities, any convenience store with a few grocery items can qualify for grocery store permits, which are generally readily available.
On the other side of the issue, you have the liquor stores. Liquor stores argue that being open on Sundays would not sell any more product, but would force them to increase their labor costs by almost 15% by being open an additional day. Much like auto dealers, liquor stores enjoy having one day a week mandated by the State of Indiana where they can have a day off. Liquor stores are allowed to sell cold carryout beer, but are not allowed to sell cold soft drinks and are otherwise limited to selling other items that are common in the consumption of alcohol. So they can sell cheeses, salty snacks, cherries & olives, mixers, glassware, and cigarettes, but they cannot sell other grocery items or health & beauty products. Liquor store licenses are far more difficult to obtain due to the fact that they must be located within the city limits of a town, and are restricted by the population of the town. Those restrictions also make the licenses far more expensive to obtain given their relative scarcity. Liquor stores are generally locally-owned, small businesses. Everyone in the store must be at least 21, and all employees must be licensed by the State of Indiana. They argue that they are far more regulated, and have a vested interest in restricting access to minors given that selling alcohol is about all that they do. However, they do not have the luxury of using alcohol as a loss-leader to drive traffic to their stores. Grocery stores can make up the loss on alcohol sales on the sales of other items. Liquor stores also say that changing the law now would wipe out the equity that they have built up in their stores. Often, the owners of these stores have all of their savings wrapped up in their business, and a change in the law would devalue their largest asset.
So those are your players. If you believe that alcohol sales should be consumer focused, then you fall on the side of the grocery stores. If you support Indiana small businesses, and believe that alcohol sales should remain a highly-regulated industry, then you fall on the side of the liquor stores.
What do I think? I believe that demonizing a product like alcohol can contribute to its abuse every bit as much as increasing its availability. I also think that my friends in the liquor store industry could do a better job of innovating given the limited amount of items that they are allowed to sell. Your grocery stores are generally interested in selling volume. They are concerned with turning product over, so they will typically stick to selling only the top selling items in any category. Liquor stores should embrace that they can offer a much deeper variety of beers and spirits then their competition. The industry is moving more and more towards microbrews and specialty spirits. Embrace that change. Insisting on competing on 12-pack Miller Lite cans is a business model that is destined to fail.
Indiana opened up the door to Sunday sales by allowing bars and restaurants, and microbreweries and wineries to sell alcohol on Sunday. Neighboring states have shown that selling alcohol on Sundays does not lead to anarchy and rampant alcoholism on that one day each week. My advice to my friends in the liquor store business would be to compromise on Sunday sales and make sure that you retain your monopoly on cold carryout beer as a tradeoff. Maybe insist that alcohol is not allowed to be sold below cost. Otherwise, by sticking hard and fast to the status quo, they may find that they will lose both Sunday sales and cold carryout, and Indiana could lose an industry that is still very important to consumers.
Brad Klopfenstein is the founder of the Tavern League of Indiana. He can be reached at email@example.com.