Saturday, February 22, 2014

Why Can't Indiana Convenience Stores Sell Cold Beer?


One residue of Prohibition, which ended 80 years ago, is the hodgepodge of state laws regulating the sale of alcoholic beverages. To say they are idiosyncratic is an understatement. A great illustration is Indiana, where only liquor stores, taverns and restaurants can sell cold beer for carryout. Other kinds of stores may sell beer, they just can't sell it cold. This rule applies only to beer. Everyone can sell chilled wine. No other state has this particular regulation.

The rationale, as usual, is that it is in the state's interest to limit alcohol consumption and one way to do that is by limiting access to alcoholic beverages. Regulators argue that anyone entering a liquor store must be 21-years-old and employees must go through permitting and training. Liquor stores are regulated on when they can be open. That's all true, but it has nothing whatsoever to do with the temperature of the beer. The rule assumes that a person, desperate for beer, won't drink a warm one.

State liquor laws are rarely updated and most haven't changed in 80+ years. They don't change because whoever benefits most from the status quo will resist change and there's rarely enough political will to overcome that resistance. Politicians don't like to go on record as having made alcohol easier to buy. When, however, there are strong financial incentives on the other side too, changes might be made, if not legislatively then in the courts.

This is happening right now in Indiana, where the Indiana Petroleum Marketers and Convenience Store Association is suing the state to force it to allow cold beer sales in convenience stores. The case is just underway in Federal court. Plaintiffs say current law violates the equal protection clause of the Constitution. Defendants say the 21st Amendment lets them do whatever they want.

12 comments:

Mat Garretson said...

Yet another example of how legislative theory often overlooks real life. Utah has a similar law...but every State store has a rapid-chill system near the checkout. So, really, what's to be gained here? It's a case of feeling good rather than doing good.

Chuck Cowdery said...

Indiana has the same thing.

Lazer said...

When I was a teenager I only bought cold beer. My parents didn't let me keep it in the fridge. Now, whenever I get nostalgic for bud light, I have a hard time finding a place to buy a warm six pack because I drink them slowly I don't like to take up fridge space with beer bottles that are going to sit there for a month and I don't like to re-chill beer.

Anonymous said...

What really drives me crazy is the law prohibiting liquor sales on Sundays. C'mon Indiana, step into the 21st century.
Crown Point Marc

Chuck Cowdery said...

DISCUS has done a good job of getting Sunday sales approved, going state by state. It's a good case, because the states that don't allow it are simply leaving tax money on the table, and they hate to do that.

Pat in OKC said...

Well, I guess that Oklahoma provides a complimentary arrangement to that in Indiana. You can only buy full strength beer in liquor stores in OK, but it cannot be chilled. You can only buy chilled beer in convenience stores or grocery stores (but it won't be full strength). What's really comical is that liquor stores can sell only products that contain alcohol, so you can't buy mixers, snacks, etc., but if you want to buy bitters, you have to go to a grocery store. I found this out when I gathered up the makings for a Manhattan. As a resident of Texas, who commutes to OK, I am frustrated by two states, not just one. ha.

Chuck Cowdery said...

The curse of vested interests and lazy legislators is everywhere.

Arherring said...

As it stands for customers right now there is very little functional difference between a package liquor store and a Wal-Mart or Target (or anybody else who can classify themselves as a "Grocery" and has a Phamacy) in Indiana except for cold beer. It wasn't always that way. C-stores, pharmacies and grocery stores have gradually eroded the barriers that used to keep them out of the alcohol business. Cold Beer is just the last domino to fall and could very well be the final coffin nail for many Indiana package stores.

Personally I don't understand why aficionados of craft beer and whiskey would cheer this. Where do you go for the latest and most interesting boutique brews and spirits, CVS, Wal-Mart, the mega-grocery in the shopping center or a pacakage store that specializes in such things and has employees who know what you are talking about? Half of their volume is cold beer. It is what keeps the doors open so they can sell the other stuff.

Chuck Cowdery said...

I hear you, but hanging on to an artificial competitive advantage isn't healthy for business in the long run. If you do a great job at something, like craft beer selection, you'll do fine. The stores that live off their cold beer entitlement and have nothing else to offer won't.

Arherring said...

The thing is it isn't an artificial competitive advantage or an entitlement. Package stores were supposed to be where you got alcohol because alcohol is a controlled substance and for that reason they were, and still are, prohibited from selling virtually anything else. Package stores were supposed to be gatekeepers, not monopolies. That is why their employees have server permits, just like bartenders and you must be 21 to enter a package store. The people bringing that lawsuit would like you to believe it is an entitlement because it is the last bit of business they haven't yet been able to pry away and I guarantee they do a much worse job at being a gatekeeper than package stores do. The bottom line is that even the best, most knowledgeable, package stores are going to be hurt very, very badly. The State will get no more tax revenue. The customers won't have as many places to go to find products that aren't the in the top 10 or 20 SKUs. The public won't be as well protected from underage sales and intoxicated buyers. The only people who win here are the grocery/pharmacy/c-store chains.

Chuck Cowdery said...

I hear you and I genuinely feel your pain, but grasping at the right to sell cold beer is a pretty thin reed. Obviously, the powers that be don't care about that other stuff, because they've already eroded the exclusivity this far. The 21st Amendment rights granted to the states are still pretty strong so there's a chance the package stores will prevail in court, but your position is weak because so much has already been lost.

Anonymous said...

IMHO, any already s***-faced college kid won't care whether his/her beer is warm or cold, so s/he won't care where s/he buys it :-/