Ohio Cracks Down on Secondary Alcohol Sales


Secondary market booze sales (i.e., sales of alcohol that was previously purchased, even if still unopened) is mostly illegal in the United States. R Street’s Kevin Kosar has written about why this market should be legalized and brought out of the shadows. While states like Kentucky have recently made modest moves toward liberalizing their secondary alcohol markets, Ohio has escalated a crackdown of such sales according to the Freemont News Messenger:

In December, agents with the Ohio Investigative Unit (OIU) teamed up with Ohio Liquor Control (OHLQ), charging five people throughout Ohio after an investigation into secondary market liquor sales.

Secondary market liquor sales often take place on web sites, such as Craigslist and Facebook groups and Marketplace. An example of secondary sales is when sellers go to other states, purchase bottles of liquor not found or difficult to find in Ohio and turn around to resell them. In Ohio, consumers may only purchase spirituous liquor from authorized sources such as an OHLQ location, which are private businesses that sell the product on behalf of the state of Ohio or permitted retail establishments, such as bars and restaurants…

Read more here.

Family Dollar Looking to Penetrate Cincinnati Booze Market


Last year, DrinksReform covered that Ohio was planning to expand its number of statewide liquor stores. Family dollar is looking to join this market, as they have applied for 28 liquor permits. They are known for selling discount products, and may expand this service to the booze industry. Biz Journals reports the story:

The discount store chain has applied and is pending approval for 28 liquor permits in Hamilton, Clermont, Butler and Warren counties. Those permits would allow 14 stores to sell packaged beer and wine to-go. The vast majority of those, 21 pending liquor applications, are in Hamilton County.

It's part of a new push by the chain to offer alcohol in its Cincinnati-area Family Dollar locations. The company has obtained permits to sell beer and wine in nine Cincinnati-area locations since September of last year.

"We are simply trying to provide our customers with a convenient option to purchase adult beverages while shopping for their everyday needs," Family Dollar spokeswoman Kayleigh Painter said in an emailed statement. She did not elaborate further on the strategy or return a call for comment.

Read the whole article here.

Ohio Liquor Regulators Set to Eliminate Booze Brands From State Stores


The Ohio Division of Liquor Control has announced that it will cut prices on 700 types of alcohol sold in the state, but also will eventually stop carrying the brands entirely. The Buckeye State is dubbing it the "Last Call Campaign," and the Division of Liquor Control's website has a list of the to-be-discontinued brands. While the state claims that the items are being discontinued to make room for more popular alcohol types and brands, the result will be shutting Ohio consumers out from brands they may enjoy. Columbus Business First has the full story:

"The Ohio Division of Liquor Control began cutting prices on around 700 different bottles of spirits this week, creating discounts of 25 percent to 40 percent on the selected bottles.

It's part of the division’s Last Call campaign, meaning these bottles will no longer be sold in Ohio.

Goodbye Alaska Outlaw, Admiral Nelson and Corner Creek?

'Once it’s gone, it’s gone,' spokeswoman Lindsey LeBerth said...

The delisting involves both brands and sizes. So some brands may still be sold by the state, but certain size bottles of those brands will not. Consult the full list here..."

Read more here.

Allowing consumers to purchase exotic or lesser known brands of alcohol online would be one way to ensure that consumers can access more types of liquor while also recognizing that stores may not want to carry such niche products. Unfortunately, as R Street's Jarrett Dieterle has written, the state of shipping laws across America makes shipping alcohol almost impossible.


Ohio is planning to expand its number of liquor stores statewide


In order to meet rising demand, Ohio is planning to increase the number of liquor stores statewide. Ohio is a control state, meaning the government operators retail sales of liquor (albeit through independent contractors), and the state has realized consumers want more outlet locations. Unfortunately, there's no indication that Ohio will consider privatization options that would allow the market to determine the number of retail outlets needed across the state.

 Columbus Business First has the full story:

"It isn’t just consumers thirsty for spirits, beer and wine.

The state of Ohio is seeing rising sales of alcohol and plans to meet the demand with the largest expansion of state liquor agencies in years with upwards of 20 potential openings in the next 18 months...

Under Ohio law, the state manages the wholesale and retail sales of spirits, although the licensed liquor agencies are operated by independent contractors that are paid by commission. Revenue goes to JobsOhio, the state’s private economic development corporation. Liquor sales generated $1.07 billion in 2016, up 5.6 percent from 2015, according to the nonprofit's annual report.

The division is looking for new operators in the designated areas. Exact addresses are to be determined, but the division does put a stake down at a set point creating a two mile radius in which to look for space...."

Read the rest here.


Ohio Tweaks Law to Allow Micro Distillers to Sell Directly to Bars

What would be routine in nearly any other industry constitutes a significant breakthrough when it comes booze. Ohio has reformed its liquor laws to allow micro distilleries in the state to sell their spirits directly to bars and restaurants, rather than being forced to work through the state-run wholesaling system. The Toledo Blade reports on the change:

It soon might become easier for Ohio’s micro distilleries to get their vodkas, gins and whiskeys on barroom shelves thanks to a change in state rules that will allow small-time distillers to sell products directly to pubs and restaurants.

That may not sound groundbreaking, but the process to get booze in the hands of a bartender is so ponderous that many producers didn’t even bother trying.

Under the Ohio’s strict liquor control rules, all distillers — no matter if they make 100 bottles a year or 100 bottles a minute — first had to ship their products to one of two state warehouses. The warehouse would send the bottles to a state liquor agency, where restaurateurs then could buy it wholesale.

'If we have a micro distillery in Cincinnati, they would have to deliver product to the Columbus warehouse just to have it come back to the Cincinnati market,' said Kerry Francis, a spokesman for the Ohio Department of Commerce. 'This will eliminate that step.'..."

Read the rest here.


A Federal Court Just Sided With a Brewery in Its Dispute With a Distributor

Many states have strict laws regulating the relationship between alcohol producers and distributors within the three-tiered system of alcohol distribution. These so-called "Franchise Laws" make it very difficult for breweries to terminate their contracts with distributors, even when its clear that the brewery would be better served by a different distributor.

But a federal court just sided with The Great Lakes Brewing Co. after it tried to end its relationship with its distributor after the distributor changed ownership.

The court held that while contracts between brewers and distributors could not contravene Ohio's state franchise laws, it was still perfectly acceptable for the parties to bargain for certain rights and obligations in addition to those laid out in the Franchise Laws (again, so long as the bargained-for rights did not conflict with those Franchise Laws).

As R Street's Jarrett Dieterle has previously noted, research suggests that state's without restrictive franchise laws generally have more breweries.

When the State Gives Lemons

The magazine Beverage Master has a nice rundown of liquor regulations and restrictions in various states around the country:

"With the passing of the 21st amendment, the prohibition of alcohol in the United States was officially repealed. Each state was given the power to regulate and control the distribution of alcohol within their borders. Today, every state handles the sales of alcohol a little differently, including setting limitations on what craft distilleries can do in their gift shops and tasting rooms. Some states are more “craft friendly” than others by allowing sampling, cocktail and bottle sales, direct distribution, paid tours, and other profitable options. However, every state imposes some restrictions. When the state imposes restrictions, how can distillers work within the laws to increase their bottom line?.."

Read the state-by-state summaries here: http://beverage-master.com/article/when-the-state-gives-lemons/

The 21st Amendment continues to choke the drinks trade

R Street's Kevin Kosar:

Tennessee recently passed a law limiting any company from owning more than two liquor-store licenses. Why? Well, current holders of liquor licenses don’t want out-of-state grocery chains to enter the market and, gasp, sell more brands of liquor at lower prices.

Would that this were an egregious exception, but such consumer-unfriendly policies are the norm. Consider some examples from around our great nation....

Read more at http://www.rstreet.org/2016/05/20/the-21st-amendment-continues-to-choke-the-drinks-trade/