Business and Economics

Indiana Convenience Stores To Appeal Cold Beer Rulings

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July 16, 2014 — Indiana Public Broadcasting’s Brandon Smith reports.

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TheStatehouseFile.com

INDIANAPOLIS – Convenience store owners announced Tuesday they will appeal state and federal court rulings that upheld a state law limiting cold beer sales to liquor stores.

“Hoosiers are tired of paying the surcharges that apply to cold beer and are sick of having limited choices of where to buy cold beer,” said Scott Imus, executive director of the Indiana Petroleum Marketers and Convenience Store Association.

Under current Indiana law, convenience, grocery and pharmacy stores are only allowed to sell warm beer, whereas carryout markets, such as liquor stores, are allowed to sell cold beer.

In a ruling last month, U.S. District Judge Richard Young upheld that law. “The state has a legitimate interest in limiting the sale of alcohol and, more to the point, a legitimate interest in curbing the sale of immediately consumable beer to minors,” Young wrote in his decision.

But convenience store officials said Tuesday that they are allowed to sell cold wine products, even though – on average – wine products contain a higher percentage of alcohol than beer.

“Members of the public understand Indiana alcohol laws lack common sense,” Imus said.

Imus added that the monopoly liquor stores have on cold beer limits consumer choices and hurts the growth of the states economy.

“The existing law violates the state and federal constitutions solely to protect the special interest of one class of retailer over another without any justification,” Imus added.

Currently, Indiana is the only state that regulates beer sales based on temperature.

Convenience store owners pointed to figures from the Indiana Alcohol and Tobacco Commission that show liquor stores have some of the worst compliance records. Since 2005, liquor stores received 1,877 violations, equating to 1.73 violations per permit holder.

During the same time period, convenience, grocery and pharmacy stores received 928 violations or .32 violations per permit holder.

“No rational basis exists to allow liquor stores to hold monopoly on cold beer sales particularly when their compliance rate is so poor compared to pharmacy, grocery, and convenience stores,” said John Maley, an attorney representing the association in the cases.

But Young said in his ruling that the convenience store association’s statistics were “problematic, irrelevant, and misplaced” and said that a liquor store faces much stricter regulations than a normal convenience store.

And Patrick Tamm, chief executive officer of Indiana Association of Beverage Retailers, said the group is not surprised by the appeal.

“These plaintiffs are large corporate interests with deep pockets and have much to gain in overturning Indiana law – even as they admitted in their own testimony calling their gas stations and convenience stores that sell alcohol ‘profit centers,’” said Tamm.

Still, convenience store owners vowed to fight on.

“The fight for common sense, fair competition, and rewarding rather than punishing responsible beer sellers continues,” said

He said the convenience store environment is a better place to sell liquor – and prevent youth from purchasing alcohol – because many people use them, they are well-lighted, and are patrolled frequently by police.

He added that they are responsible, sophisticated businesses, not “one-off liquor stores that have an incentive to sell that next 12-pack because they need the $3 in profit.”

Maley said the law is just not fair towards convenience stores.

“Indiana’s government should not pick winners and losers in each business,” Maley added.

Maley pointed to a February decision by the Indiana Supreme Court that ruled an Evansville smoking ban as unconstitutional. In the case, the ordinance prohibited smoking in bars and restaurants in Evansville, but allowed it on the local riverboat casino.

The Indiana Supreme Court said the ordinance was unconstitutional because it picked a winner and a loser.

“The antiquated cold beer prohibition does the same thing,” he said. “It picks a winner and a loser.”

Nationally, nearly 80 percent of convenience stores sell beer, which accounts for more than 30 percent of all beer purchased in the United States, according to the association’s appeal to the state court.

And the temperature of beer does not control or alter its alcohol content, according to the group’s appeal.

“We continue our fight for rational public policy that not only protects our society but one that will end confusion in the market place,” Imus said. “We fight for a solution and for healthy competition among all retailers which provides greater convenience for Hoosiers.”

“We’ve waited long enough and now is the time to modernize Indiana’s alcohol laws.”

TheStatehouseFile.com is a news website powered by Franklin College journalism students.

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