The Joplin Globe, Joplin, MO

Local News

January 12, 2013

Kansas group pushing lawmakers to expand sale of alcoholic beverages to all retailers

JOPLIN, Mo. — For the third year in a row, Kansans will debate whether the state should allow alcoholic beverages to be sold anywhere other than liquor stores — something their neighbor to the east allows.

The debate raises questions about increasing access for underage drinking, consumer convenience, increased revenue and jobs.

Lining up on one side are Kansas liquor stores; on the other are big box, grocery and convenience stores.

The conflict began in 2010 with the introduction of a bill in the Kansas Legislature, and continued last year with the introduction of a similar measure. This year, a Kansas group will again try to persuade lawmakers to vote in favor of it, perhaps as early as this month.

Mimi Redd, a Pittsburg liquor store owner, said changing the law would hurt existing businesses like hers.

“If the corporations like Wal-Mart, like convenience stores, can sell 5.0 beer and liquor, it will take it away from everyone else. It will destroy us, because more than half our sales are beer. If the other stores sell it, we won’t be selling as much,” Redd said.

She and her husband, Lloyd, opened Redd’s Retail Liquor 24 years ago. Through careful management and hard work, she said, the business grew and they built a new store on the lot next door in 1994.

“I now employ five part-time people,” she said. “We spend our money locally. The corporations, their profits go out of town, out of state, but we use local insurance, local banks, our profits stay in town.”

Lloyd died in 2007, but Mimi, now 69, continues to run the store.

“This business has put food on the table for our six kids,” she said. “I don’t know what I’d be living on without it. It doesn’t make you rich, but you can have a decent living with it.”

Uncork Kansas

A coalition called Uncork Kansas, which is comprised of more than 1,700 businesses and was launched in January 2012, believes a change is necessary. Supporters include the Kansas Chamber of Commerce, the Kansas Food Dealers Association and the Retail Grocers Association of Greater Kansas City.

“Kansans want to be able to buy a bottle of wine with their steak. Plus, consumers win when retailers compete. That’s the beauty of the free enterprise system. We believe dictating where full-strength beer, wine and spirits can — or can’t — be sold goes against the basic tenets of our economic system: free enterprise, fair competition and consumer choice,” said spokeswoman Jody Hanson.

She disagreed with critics who said changing the law will result in a rash of liquor store closings and job losses.

“The reality is that, just like in any industry when new competition enters a market, the weaker businesses that aren’t willing to adapt, change and optimally serve their customers’ needs most likely won’t survive,” she said. “The ones that listen to their customers and deliver on their requests will. We do think this type of thing will be minimal.”

Across the state line, in Missouri, Lorn Anderson and his mother run Paddock State Line Liquor on Old Highway 66, just east of Galena, Kan. They have been in business for 34 years. Unlike Kansas, Missouri retailers such as Wal-Mart, and grocery and convenience stores, sell liquor.

“You have to change with the times,” Anderson said. “Wal-Mart sells, grocery stores sell, even the Dollar Store sells over here. Yeah, you’ll lose a little business, the other stores will gain a little, but we’ve been dealing with that for a long time.”

His response was to install a “beer cave” that would give beer a higher profile in the store, and he said he is preparing to begin selling fountain drinks — both moves designed to keep his loyal customer base and perhaps attract new ones.

“We’re always looking at changing the way we do things here,” he said. “If you don’t, you’re going to die.”

Kansas versus Missouri

Kansas has a long history of wrestling with liquor laws; Missouri doesn’t.

Kansas is where Carrie Nation became famous for her enforcement of prohibition. Kansas prohibited all alcohol from 1881 to 1948 — longer than any other state — and then continued to keep tight restrictions on sales until 1987 — long after other states had loosened the rules. Kansas still has not ratified the 21st Amendment, which ended nationwide prohibition in 1933.

Missouri is more permissive.

When Carrie Nation smashed her way into Missouri bars, she was promptly arrested, fined and told by a judge to leave the state and never return. State law prohibits dry counties, and grocery stores, drug stores, convenience stores and gas stations sometimes have liquor departments as large or larger than other departments in those stores.

Jobs

According to Hanson, with Uncork Kansas, changing the law could create thousands of additional grocery and convenience store jobs. She cited a study by the Food Marketing Institute that said allowing restricted states such as Kansas to sell wine in food stores would lead to the creation of more than 168,000 jobs nationwide, paying $7.2 billion in wages.

But Pittsburg liquor store owner Don Hudson, who has operated Pitt Discount Liquor at 1001 S. Broadway since 2006, doesn’t see it that way.

“It has been estimated across the state, 300 to 600 mom-and-pop liquor stores will close down. We won’t be able to compete with the large out-of-state corporations,” he said. “It seems to me that our Kansas State Chamber of Commerce is promoting big business over small business. We’re a family store. We have five part-time employees. Wal-Mart ... Dillons ... they won’t hire extra people to sell it.”

The Pittsburg Area Chamber of Commerce, meanwhile, is taking no official position. President Blake Benson called the issue “a dicey one.”

“We have people on either side of this issue,” Benson said.

Spencer Duncan, executive director of a group called Keep Kansans in Business, opposes the change.

“The Kansas chamber prides itself on looking out for what is in the best interests of the Kansas economy. This support is shocking, because fact after fact shows this legislation is detrimental to our economy, destructive to rural Kansas’ tax base, unsupportive of small business owners, increases government and overall is bad economic policy,” Duncan said.

His group’s online petition has generated 1,250 signatures from those who oppose changing Kansas law.

But in testimony in support of the bill, J. Kent Eckles, of the Kansas Chamber of Commerce, said changing the law will “bring back Kansas dollars that are currently being siphoned off to neighboring states.

“QuikTrip and Hy-Vee are just two examples of our member companies that have stated they will not expand in Kansas until liquor laws are modernized ... QuikTrip even razed one of its Kansas stores a few years ago, and rebuilt it just a few feet east, in a state with more modern liquor laws,” he said, referring to Missouri.

Meanwhile, Uncork Kansas’ online petition has 27,087 signatures from those in favor of changing the laws. One of them is Gratz Peters, an Erie, Kan., resident who owns 24 Pumpin’ Pete’s convenience stores in Kansas, including three in Pittsburg, and one in Missouri and five in Oklahoma.

“It’s about what’s best for the customer,” Peters said. “What’s always been best for the customer is competition. We stifle, or limit, competition over here in Kansas with these liquor laws. All that does is drive the price that Kansas customers pay for their legal adult beverages higher.”

The price of other items suffers as a result, he said, and drives business over the border.

“Kansas liquor laws benefit Missouri,” he said. “Unfortunately, Kansas is home to the temperance movement, and we’re still carrying those skeletons around. It’s legal. It’s not like we’re asking to sell something that’s illegal in the state of Kansas.”

“This is about competition doing its job so that customers are not paying more for what they buy than they have to. (It’s) about keeping our revenues in the state of Kansas,” Peters said. “It’s not us versus them.”

Underage sales

According to testimony last year by Doug Jorgensen, director of the state’s Division of Alcoholic Beverage Control, the number of enforcement agents and administrative staff would need to nearly double to enforce expansion of alcohol to more than 2,000 new outlets, at a cost of an additional $1.3 million.

But Hanson also argued that opening up sales outlets won’t lead to more abuse by minors.

“The latest ABC figures show that grocery and convenience stores have a higher rate of compliance in prohibiting sales to customers younger than 21,” Hanson said.

She said a 2007 National Institute of Health study revealed that commercial alcohol availability is not directly related to underage alcohol use. Instead, minors indicated a much greater reliance on social alcohol sources such as friends and family.

“Kansas grocery and convenience stores already have the knowledge, understanding and infrastructure for the training, technology and internal enforcement to regulate liquor sales. Currently they responsibly sell pharmaceuticals, tobacco products, dry ice and beer,” Hanson said.

Conflicted

Southeast Kansas legislators are conflicted.

Rep. Julie Menghini, D-Pittsburg, said she has not supported a bill on revamping alcohol sales in the past, primarily because of the small business aspect of liquor stores.

“It truly is one of the last small businesses we have in the state. That being said, I understand the convenience factor,” she said.

Menghini said she does not yet know how she will vote.

“It is a really difficult issue for me,” she said. “I have promised I am going to be open-minded about this issue and I’m going to read very carefully what the bill says. I’m going to look very carefully at who the winners and losers are because, make no mistake, there are going to be losers in this, and they’re going to be our neighbors and local business owners that are affected when we make this decision.”

Sen. Jake LaTurner, R-Pittsburg, said he has been pondering a proposal he heard recently to make it a local ballot initiative.

“I’m not so sure that isn’t a bad idea — leave it up to the county to decide or the city to decide what they want in that particular place.”

“I find this a very philosophical divide for me on this issue, because I don’t want to limit consumer choices. I don’t think any one company should have a monopoly on the market; at the same time I don’t want to see small businesses being shut down. So this is a very difficult issue.”

Rep. Bob Grant, D-Frontenac, who just began his 20th year in the Legislature, has more certainty than the others.

“Over the years I have not supported it, and probably won’t support it again. Liquor stores sell nothing but liquor,” said Grant, who for many years owned a bar in Cherokee, Kan.

“I don’t know whether we want to expand the availability of stronger drinks (to kids),” Grant said. “When we’re talking about jobs ... I think we end up losing jobs. You’re looking at the last mom-and-pop business there is.”

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