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Put a cork in it

Why did a legislative task force studying strong beer and wine sales dry up?

Greg Horton November 9th, 2011

Members of the joint task force on the sale of wine and beer in grocery stores voted to disband on Oct. 20 after only two meetings. Jeff Reasor, CEO of Reasor’s Foods and a member of the task force, said there were signs from the beginning that the group would not reach a consensus.

“I went into this thinking we’d fully discuss the issues and try to find a way to bring our laws into the 21st century,” Reasor said. “But the first day, I was the only one who showed up without a prepared statement and without my attorney. I thought it was a strange way to begin a conversation.”

Reasor said the group was supposed to meet only two or three times, as he understood it, with the goal of discussing all the relevant issues. That never happened.

“The discussion got mired on a couple issues,” Reasor said, “especially excessive drinking and exposure of minors to alcohol. It seemed like a smoke screen for people who were just opposed to change.”

Rep. Ron Peters, R-Tulsa, cochair of the task force, said he agreed with Reasor’s assessment.

“There were people on the task force who wanted to keep the status quo,” Peters said. “The state’s whole salers and retailers do not want the laws to change because they want to keep their monopoly.”

However, J.P. Richard, a task force member, president of the Retail Liquor Association of Oklahoma and owner of Cache Road Liquor and Wine in Lawton, said that retailers do not have a monopoly.

“This isn’t about a monopoly,” Richard said. “This is about ensuring an equitable system for everyone. Some people want this thing changed tomorrow, but it’s not going to happen like that.”

‘Politically sticky’
John Woods, president and CEO of the Norman Chamber of Commerce and a task force member, said Richard is correct that change will not be easy. Woods researched the necessary legislative changes that would be required to get strong beer and wine into Oklahoma retail stores, but his report “took the air out of the room,” Richard said.

“This is a change that can be made,” Woods said, “but the system needs to be equitable. There are five different portions (of Article 28 of the Oklahoma Constitution) that would have to be changed to make this happen.”

Woods (pictured, right) said voters would need to approve five separate state questions or repeal the entire article.

“It’s similar in scope to the changes we saw in 1984 when Article 27 was repealed to allow liquor by the drink,” Woods said. “The five separate state questions would all need to pass to ensure equity. We can’t have three ‘yes’ and two (fail). Some of these questions would be politically sticky.”

The five issues that need to be addressed are related to the ability of liquor stores to compete with grocers and big-box stores like Walmart. First, Woods said, is a change that would allow liquor stores to sell other merchandise. Next would be a provision to allow liquor stores to operate as a corporation, as Walmart and Target do. Currently, state law only allows individuals to own a liquor store.

The third change would be to allow nonresidents to sell liquor. Current law requires 10 years of residency to hold a seller’s license, an impossibility for large retail chains. Additionally, question four would be related to the chains, inasmuch as current law only allows one liquor license per individual.

“With that sort of provision in place,” Woods said, “it would mean that only one Walmart in a city would be able to sell.”

The last question would be address Sunday and holiday openings for liquor stores. Since retailers and grocers are open on those days, liquor stores must also be afforded the same flexibility. The law prevents that right now.

‘Smoke-screen issues’
Reasor said this was the sort of question that could have been ironed out in the task force meetings.

“Some of these things aren’t that hard,” Reasor said. “Compromises are possible, such as limiting the retailers’ and grocers’ hours of sale to the same hours that liquor stores must follow. We could have looked at extending hours until 10 p.m. None of that happened because we got stuck on the smoke-screen issues.”

Peters said he believes the change will come via referendum.

“I suspect someone will begin circulating a petition so that we can get the necessary number of voters to allow the question on the ballot,” Peters said. “If it comes down to a vote of the people, the laws will change.”

A vote to repeal Article 28 would make the passage of five separate state questions unnecessary, but how that vote would turn out is unpredictable. During one of the task force meetings, both sides presented poll results showing a majority of Oklahomans both for and against the changes.

Whether the laws change, Reasor and Richard both see reasons to be concerned.

“We have no way of knowing how the state’s distributors will service several hundred to a few thousand new locations,” Reasor said.

“It’s the elephant in the room no one is talking about.”

Richard’s concern is related to the viability of small liquor stores: “If you tell a retailer he has several years to prepare for these changes, then I think you’ll get more retailers behind the idea, but as it is, people want this thing overnight. We’re not comfortable with that, and the situation is too complex to make that sort of time frame feasible.”

Photos by Shannon Cornman and Mark Hancock

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