Wednesday, January 26, 2011

Eliminate the 3.2

The Coalition for Jobs and Consumer Choice is pushing the Kansas Legislature to eliminate the 3.2 ABV beer sales in grocery and convenience stores. This bill, presumably, allow grocery stores to sell all manner of alcohol including wine and liquor by eliminating the lowest tier of liquor license.

The group is claiming that eliminating the 3.2 requirement will somehow create over 15,000 jobs and raise $72.5 million in local and state revenue. Without looking at the assumptions behind these numbers they seem to be double counting. I don't doubt that more Kansans would buy wine and beer if it was a little more convenient, but with an alcohol tax of 8% it would take an extra billion dollars in sales to raise that kind of money. Some of the $72.5 million could certainly come from increased income taxes from the 15,000 jobs. But, the jobs number seems just as iffy. Some smaller liquor stores are going to close from increased competition from liquor stores. The number of people losing their jobs would have to offset the 1 or 2 extra people a grocery store would hire. I think most of the 15,000 number would come from the marginal number of new grocery stores that would be built because of the increased profitability of grocery stores.

But, even if these numbers are wrong by a factor of 3, do you think Kansas is in a position to shun $25m and 5000 jobs? A good number of those jobs being Whole Foods and Costco jobs (Wichita has neither chain and would almost certainly get one of each if beer, wine and liquor sales could be added for increased profitability).

I'm interested in what the case would be for not eliminating the rule. Or to turn the argument around, what would be the reason to install a rule allowing grocery stores to only sell 3.2 beer? Could any bill like that ever pass today? It does offer small, neighborhood liquor stores protection from larger competitors, but they can still compete. Grocery stores, typically, have awful beer and wine selections. Smaller stores can definitely sell expertise, convenience and more diverse selection.


I can come up with no great reason to stick with 3.2 beer sales and many good reasons to eliminate them. I'm sure your elected KS state senator or representative would love to hear your thoughts on this issue, you can find the contact information for your elected congressperson here. Drop them a line and tell them your thoughts.

For more Kansas liquor laws that should be liberalized check here (this bill would take care of items 1-3). For the KCTV report on the issue check here.

3 comments:

  1. There are always advantages and Disadvantages on any move which is given go ahead by the Administration, this is a classic example of the same.

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  2. For convenience, you can't beat booze at the grocery store. You are undoubtedly right that liquor stores could still differentiate themselves through selection and expertise, but this would still put a lot of pressure on them. 3.2 beer is stupid, though, it would be worth it just to see it go away.

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  3. beers of this type are also available in countries (such as Sweden and Finland) that tax or otherwise regulate beer according to its alcohol content. In Sweden, beer containing up to 3.5% ABV (called Folköl or "Peoples Beer") may be legally sold in any convenience store to people over 18 years of age, whereas stronger beer may only be sold in state-run liquor stores to people older than 20. In addition, businesses selling food for on-premises consumption do not need an alcohol license to serve 3.5% beer. Virtually all major Swedish brewers, and several international ones, in addition to their full-strength beer, make 3.5% folköl versions as well.

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