Maryland Comptroller Comes Out in Support of Grocery Store Beer Sales


We've been following Maryland's beer reform debate over the past year, which culminated in a legislative reform package proposed by Maryland Comptroller Peter Franchot's task force. Franchot has been an outspoken advocate for overhauling Maryland's outdated beer laws, although some state lawmakers have been resistant to his ideas. In recent comments to the Baltimore Business Journal, Franchot added to his reform ideas by speaking out in favor of Maryland groceries being allowed to sell beer:

Comptroller Peter Franchot wants Maryland to join a majority of the U.S. and allow beer and wine sales in all grocery stores, marking a reversal from a previous stance he had on the issue as recently as last fall.

The Democratic comptroller said in an interview this week with the Business Journal that the move to legalize alcohol sales in supermarkets would "provide a shot in the arm" to local craft brewers, an industry he has been seeking to reform for more than a year...

Read more here:

Which State Has the Highest Beer Taxes?


Each year, the Tax Foundation releases its report on which states have the highest alcohol taxes. They do state rankings for each type of booze--beer, wine, and distilled spirits--and they have just released their 2018 rankings for beer:

With summer quickly approaching, we can expect to see a seasonal uptick in beer sales, thanks to much-anticipated barbecues, baseball games, and the like. But when we fork over cash to buy yet another six-pack, how much is being used to cover the expense of brewing the beer itself? Less than one might think.

According to the Beer Institute, “Taxes are the single most expensive ingredient in beer, costing more than the labor and raw materials combined.” Research has shown that approximately 40 percent of the retail price of beer is dedicated toward covering all the applicable taxes.

In addition to the federal excise tax on beer (which ranges from $0.11 to $0.58 per gallon based on production, location, and quantity), all fifty states and the District of Columbia collect their own tax on fermented malt beverages...

Rates vary widely by state: as low as $0.02 per gallon in Wyoming and as high as $1.29 per gallon in Tennessee...

Click here to view the map of all 50 states.


Indiana Stores Resort to Cooler Bags To Serve Cold Beer

Image courtesy of   The Journal Gazette

Image courtesy of The Journal Gazette

Indiana gas stations and convenience stores have long suffered a fate that their counterparts in surrounding states have never had to endure: They are forced to sell warm beer to customers. R Street's Jarrett Dieterle has written about Indiana's warm beer law and has documented the recent failed attempts to repeal it. According to The Journal Gazette, Indiana stores are now resorting to ever-more-creative measures to provide their customers with something as simple as chilled beer:

Convenience stores throughout Indiana are taking a new tack in the quest to be able to sell cold beer – a reusable bag that will chill beer and other beverages in just 15 minutes...

Convenience stores have long fought for the ability to sell carryout cold beer but lawmakers continue to side with liquor stores, who have that exclusive right. Indiana is the only state that regulates the sale of beer based on temperature...

A news release said with the reusable Chill Indiana glacier bag, the customer makes a one-time purchase of a bag and then is allowed free access to ice from the store’s fountain machine on subsequent purchases. An ice-filled bag will take a bottle or can from room temperature to an acceptable consumable temperature in just 15 minutes, and it keeps that beverage cold for hours...

More here. Despite this creative stop-gap solution, Indiana store owners are still hoping to repeal the warm beer law someday.


Could New Jersey Finally Reform its Liquor License Quota System?

New Jersey is notorious for its liquor license quota system for restaurants, only allowing one license per 3,000 residents. This arbitrary limitation on supply has inflated the prices of these licenses beyond what many restauranteurs can even afford. In, columnist Paul Mulshine discusses recent legislation that has advanced which would reform the state's quota system:

In 1947, the holders of liquor licenses managed to buy enough legislators to attain passage of a law that created an artificial monopoly on liquor sales.

This had the effect of pushing up the value of the licenses to levels that can now exceed $1 million. And that has had the effect of stymieing the growth of the state's restaurant industry.

That may be about to change. For the first time since that iron curtain descended there appeared a rip in it. That occurred last week when an Assembly committee advanced a bill that would finally open up the alcoholic beverage industry to competition...

The key argument that won the day was the role of restaurants as anchors for the sort of economic development so desperately needed now that retail stores are closing because of competition from the internet.

One couple who own a restaurant in Jersey City, and who brought along their baby for emotional impact, noted that New York never adopted New Jersey's practice of limiting liquor licenses. They said they had been living in Brooklyn when a boom in restaurants that serve drinks brought an economic revival.

Another couple who brought along a baby were Robert and Magdalena Pluta. They run Leonardo's restaurant in Lawrenceville just north of Trenton.

"The food costs are going up," Pluta told me. "It's hard to sell meatballs and linguini and make a profit. The mom-and-pop restaurants are struggling."...

Read the whole column here.




Tennessee Cracks Down on Online Alcohol Sales


Regulators in Tennessee are ramping up enforcement efforts against online booze sales on websites like Craigslist, according to The Tomahawk:

Law Enforcement Agents from The Alcoholic Beverage Commission conduct statewide sting operations targeting the online sale of liquor. No two states are alike when it comes to liquor laws, and most are changing from year to year. Anyone intending to sell alcohol through a home delivery service, whether by mail order or online, must hold a valid liquor license.

Seventeen suspects were charged with illegal sales of alcoholic beverages resulting from statewide sting operations targeting online ads on Craigslist and other social media outlets. Agents seized sixty-nine bottles of alcohol that were sold to them during the undercover operations which took place on street corners, parking lots, and places of business...

More here.

As booze expert Chuck Cowdery has explained, such crackdowns are the result of the absence--and illegality--of a secondary alcohol market in the United States:

There is, on the internet, a very active secondary market in rare bourbons and other alcoholic beverages. People offer bottles for sale or indicate bottles they would like to buy. Transactions are arranged by email or other private messaging. This happens on Facebook and Craigslist, and probably many other places. I’m not going to point you to any of them. They aren’t hard to find.

Unfortunately, in the United States the secondary market in alcoholic beverages is illegal. I’ve written about this before, as recently as October.

R Street's Kevin Kosar has also previously called for legalizing the secondary booze market.

Alcohol Producers Push To Make Federal Tax Relief Permanent


As part of the tax cut legislation signed by Congress and the President last year, federal excise taxes on beer, wine, and spirits were cut for the first time in decades. (R Street's Kevin Kosar and Jarrett Dieterle analyzed the details of these alcohol tax cuts in this R Sheet primer). The excise tax cuts, however, were only implemented for a two-year period. According to The Hill, alcohol producers are now pushing Congress to make them permanent:

The alcohol industry is pressing Congress to make permanent the excise tax relief it received under the Republican tax law.

The measure President Trump signed in December reduces excise tax burdens on distillers, brewers and vintners for two years, and industry groups are hoping that these changes can last for a longer period of time. Industry groups argue that the tax relief is particularly beneficial to smaller producers and is helping businesses make new investments and hire more workers.

It’s unclear what the vehicle would be for extending the cuts, but groups are optimistic that an extension will happen because there has been bipartisan support for lowering the excise tax burdens...

Read more here.

D.C. Raises Alcohol Taxes to Fund Metro

Photo courtesy of  Greater Greater Washington .

Photo courtesy of Greater Greater Washington.

According to WAMU 88.5, the D.C. City Council is raising numerous taxes--including booze taxes--to pay for the city's Metro system:

Uber rides and six-packs of beer in D.C. will soon get a little more expensive — and it’s all to help Metro.

The City Council on Tuesday gave initial approval to a $14.4 billion budget for 2019, which includes a number of tax increases to help fund the city’s $178.5 million annual commitment of dedicated funding for Metro.

Taxes will go up on ride-hailing services like Uber and Lyft from the current 1 percent of gross receipts to 6 percent. For a $10 ride, that would translate to an additional 60 cents paid by the passenger.

The city’s general sales tax will also increase from 5.75 to 6 percent; the tax for alcohol bought at liquor stores will increase from 10 to 10.25 percent; and the commercial property tax rate on properties assessed at more than $5 million will increase from $1.65 to $1.89 for every $100 of assessed value.

The new taxes will go into effect on Oct. 1, 2018.

“It’s very exciting,” said Council member Jack Evans (D-Ward 2), who also serves as the chair of Metro’s board of directors...

Read more here.

Court Allows Lawsuit Challenging N.C.'s Self-Distribution Cap To Proceed


R Street's Jarrett Dieterle has previously written about North Carolina's self-distribution cap for beer. The law holds that once a brewery reaches 25,000 barrels of annual production, it can no longer distribute its own beer to retailers but most work through a wholesaler. Breweries in North Carolina tried to repeal the law legislatively last year, but were thwarted in their efforts. They then turned around and filed a lawsuit, and as the Carolina Journal reports, a state court recently rebuffed the state's attempts to dismiss the suit:

A Wake County Superior Court has ruled against the state of North Carolina in a lawsuit seeking a permanent injunction against enforcement of the state’s distribution cap and franchise laws on breweries.

The complaint — filed last year by Craft Freedom LLC, The Olde Mecklenburg Brewery LLC, and NoDa Brewing Co. — says the distribution cap and franchise laws injure and threaten to impose additional damage on the brewers. They can produce no more than 25,000 barrels of beer each year without contracting with a distributor.

A subsequent motion filed by the state says the complaint should be dismissed with prejudice, and asserted the challenge, according to statute, must be heard by a three-judge panel of the Superior Court.

Superior Court Judge Allen Baddour, who heard the complaint March 20, issued the ruling Tuesday, May 15.

“We are pleased with the Court’s ruling, which rejected the State’s arguments for dismissal and held that we sufficiently alleged that these laws are unconstitutional,” Drew Erteschik and Bob Orr, lawyers for the brewers, said in a statement. “Our craft brewery clients, the entire craft beer community, and craft beer consumers across North Carolina can all share in this major victory.”

The ruling allows the lawsuit to proceed toward a trial...

Read the rest here.

Is it time to let Minnesotans buy booze in grocery stores?


Minnesota recently legalized Sunday alcohol sales, and now some commentators in the state are wondering whether the next step should be to permit grocery stores to sell alcohol. Mike Mullen writes for City Pages:

We Americans are a divided people. Especially when it comes to who gets to buy booze at grocery stores, convenience stores, and gas stations. 

Such laws are set state-by-state, leading to a patchwork regulatory scheme that swings wildly as one crosses borders. Consider Minnesota's neighbor states: North Dakota does not allow alcohol sales at grocery stores; South Dakota and Iowa do; Wisconsin leaves it up to local governments to decide. The majority of states have legal grocery store liquor sales of some kind.

With the curious, fabulous exception of Sentyrz Market in northeast Minneapolis, Minnesota allows for the sale of 3.2 beer (insert Monty Python joke), and nothing else. That might be about to change.

Well, someday. Maybe. 

A bill that would allow beer, wine, and "Minnesota-distilled spirits" to be sold at "food retailer" stores in Minnesota will get an "informational hearing" on Wednesday, as flagged by Minnesota Public Radio's Briana Bierschbach. The "informational" nature means shoppers shouldn't get their hopes up this year. Committee deadlines passed long ago, and Minnesota's (already highly productive) 2018 legislative session ends in a week.

But next year? Sure, yeah. Maybe...

Read the whole column here.

Delaware May Soon Allow Alcohol Producers to Sell Each Other's Products


In many states, distilleries, wineries, and breweries are restricted to selling only their own products in their on-site taprooms or tasting rooms. But now Delaware has taken a step forward to allow producers to sell products from other producers, as reported by Delaware Online:

Have you ever been to a craft brewery in Delaware with a friend who doesn't drink beer either because of taste or a gluten-free diet?

Well, they won't have to sip water any longer.

The state Senate voted unanimously Thursday to allow Delaware's craft alcohol-makers to sell each other's products, effectively allowing breweries to sell wine.

A spokesman for Gov. John Carney would not comment on whether or when Carney would sign the bill into law...

The new rule would take effect immediately once signed, allowing each of the state's 30-plus alcohol-makers to decide whether they want to sell their products at other craft locations and vice versa.

The move offers more for choice craft drinkers, ushering in a new era where a customer could conceivably drink a glass of wine from Marydel's Harvest Ridge Wineryat Blue Earl Brewing in Smyrna...

Read the rest here.