KS: House passes bill overhauling strong-beer sales in Kansas

cjonline.com

By Tim Carpenter

April 6, 2017

The House approved on emergency final action a bill Thursday delivering to convenience, grocery and drug stores entry into the strong-beer market in Kansas and granting liquor stores authority to begin selling cigarettes and other nonalcoholic merchandise.

The bill was forwarded on a vote of 80-45 to the Senate, where a substantive shift in regulation of the liquor industry might not be so readily toasted.

A consortium led by Dillons, Hy-Vee, Quicktrip and Casey’s has been engaged for years in an intense political struggle at the Capitol to crack Kansas law blocking sales in their stores of anything other than 3.2 percent beer. This coalition, fronted by the lobbying group Uncork Kansas, engineered compromise language in Senate Bill 13 during negotiations with leaders of the Kansas Association of Beverage Retailers, which represents less than one-fourth of the state’s 750 independent liquor stores.

“The legislative process is built on compromise,” said Rep. Erin Davis, an Olathe Republican who warned peers that amending the bill would scuttle the deal. “Both sides of this issue for the past 10 years have zealously defended their position. Both sides have come together for a grand compromise.”

Rep. Ken Corbet, R-Topeka, denounced the bill as a concerted effort by large corporations to squash small retailers.

“Kansas is driven by small mom and pop businesses,” he said. “It just seems wrong to ask us to change the law so that big corporations can add just one more product to their inventory at the expense of 700-plus liquor stores in Kansas.”

Under the House bill, businesses limited to 3.2 percent beer licenses would be able to place on their shelves beer that contained no more than 6 percent alcohol by volume as of April 1, 2019.

At the same time, the state’s retail liquor stores would be permitted to sell merchandise, as long as sales of those items didn’t exceed 20 percent of a retailer’s total gross sales. Sales of cigarettes and lottery tickets wouldn’t be included in calculation of that cap.

The arrangement would represent a step back from Uncork Kansas’ original proposal to sell full-strength beer, wine and liquor in their stores.

The House gave first-round approval of the bill on a 70-50 vote, but the chamber declined to immediately advance the bill to final action. However, the House agreed after a lunch break to conduct the final vote on the liquor legislation because lawmakers are eager to leave Topeka for a three-week break.

Rep. Brandon Whipple, D-Wichita, said an unwritten agreement among lobbying organizations involved in striking the deal would block consideration by the Legislature of major reforms to Kansas liquor law for a decade.

However, skeptics of that type of informal arrangement said no future Legislature could be bound by promises made by lobbying organizations.

Rep. Annie Kuether, D-Topeka, said the bill had financial implications for cities and counties that hadn’t been defined by proponents. She expressed concern that retailers with corporate headquarters in other states would be given license to draw Kansas tax dollars elsewhere.

“It’s sort of a gun being pointed at the head of small business owners,” Kuether said. “I’d like to see my tax dollars stay in the state. There’s still a lot of unanswered issues.”

Rep. Tom Cox, R-Shawnee, said state government shouldn’t cling to antiquated laws shielding liquor stores from legitimate competition.

“Maybe it’s not our job as government to keep them thriving,” he said.

Big-box retailers, corporate convenience shops and mega-liquor store operators would have the financial firepower to run the small liquor stores out of business, said Rep. John Carmichael, D-Wichita. As existing liquor stores close, he said, the loss of outlets offering whiskey and wine will compel passage of legislation allowing sales of those products outside liquor stores.

“The moms and pops, the ones on the margin of profitability, uniformly oppose this legislation,” Carmichael said. “This is not a compromise. This is a death knell for these businesses.”