Should we Uncork Kansas?

"Imagine being able to buy groceries and wine at the same time. Or, being able to buy beer when you’re at a convenience store – instead of making a special trip to the liquor store. And what if you could buy ice, mixers, and snacks from your neighborhood liquor store rather than having to make a special trip to the grocery store that may be several miles away. That’s what Uncork Kansas is working to accomplish."

I guess its that time of year again. Last January, Senate Bill 54 was introduced in an attempt to allow the sale of full strength beer in Kansas grocery and convenience stores. I don't have any idea what stopped it, but somehow the bill was removed from the senate calender less than 4 months later, the issue apparently dropped. Now the debate is heating up once more thanks to organizations like Uncork Kansas.

As much as I want this to just be over with, for a final decision to be made, I think its important to remember just how critical this issue is. Its easy to view the question of where a consumer is allowed to purchase alcohol as a simple matter of personal freedom. Why should the government tell me where and when I can buy booze? But like most things in life, the reality not quite that simple.

The truth is passing legislation to allow beer to be sold in Kansas grocery stores will have a major impact on hundreds of businesses and thousands of people. Millions of dollars are at stake here. A study released last year by KU business professor Art Hall suggests Kansas would have 25 percent more grocery stores, 34 percent more convenience stores, and 58 percent fewer liquor stores if this proposal were adopted. This means Kansas could expect 116 more grocery stores, 449 more convenience stores, and 341 fewer liquor stores under his proposal. Predictions like this need to be viewed with a skeptical eye, but there are clearly some large economic implications to deal with here.

To put it simply, it seems that grocery stores would be handed a windfall while some liquor stores go out of business. But of course, it is more complicated than that.  Its easy to think of all liquor stores as the little guys, independent businesses who take pride in offering fine products while grocery stores are the big bad corporations just in it for the money.  But many liquor stores offer no customer service, little product knowledge, poor selection and no real value to the consumer. They are able to stay open purely because they are located next to a grocery store that cannot sell real beer. In a free market, such stores would never have survived and if the laws are changed, they will likely be the first stores to go under. 

The big question for me is what does this do to GOOD liquor stores? What happens to stores that offer a large and dynamic selection and a well trained, knowledgeable, passionate sales staff? These are exactly the kind of stores that are good for the beer industry and are critical for the growth and development of craft beer. While these stores may be in the best position to weather the storm, they will surely lose some of their sales.

But just like not all liquor stores are the epitome of the noble small business, not all grocery stores are ignorant when it comes to craft beer.  A few of the local grocery chains in Missouri offer excellent beer selections that could rival even the best Kansas stores.  Some of them operate with a separate liquor department that employs people just as interested in better beer as you and I.  They too can help spread the word about craft beer and in many ways, a grocery store is the best place to convert mainstream customers.  Its up to each store to decide if they will only feature the mass produced favorites or if they will expand their selection and bring in products from smaller niche producers.  Though many will probably just carry the 100 top selling SKUs, I think its wrong to assume that all of them will.

What about breweries? Large producers like MillerCoors and AB InBev would surely sell more beer if Walmart, CVS, and others were allowed to carry their full-strength products. The impact on smaller breweries is less clear. A Wall Street Journal article that covered a similar legal fight in Colorado last year had this to say:

"Colorado's 130 craft breweries are also fighting to keep the status quo. The proposal would greatly expand their potential market, by letting them sell their full-strength beers to chain groceries. But the brewers prefer to market their beer to independently owned liquor stores, some of which are enormous—50,000 square feet—and stock scores of niche brands and seasonal brews. Supermarkets don't have the shelf space, so if big grocery chains came to dominate the beer market, consumers might have less exposure to local products, said John Carlson, executive director of the Colorado Brewers Guild. 'I'm not saying it will be Armageddon,' said John Bryant, president of Oskar Blues Brewery in Longmont, Colo. 'But it would change the dynamics of craft breweries in Colorado.'"

What do you think?

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