Brian Howey: A populist cold beer rebellion is brewing
Friday, April 14, 2017 9:37 AM
INDIANAPOLIS – If there’s been a curve ball in this waning session of the General Assembly, it’s been the Ricker’s cold beer controversy. And if key players aren’t careful, this could signal a populist uprising in the age of Amazon, Trump and the anti-regulation fervor that has swept Indiana and the nation.
There is significant danger for the package liquor store industry and their lobby. As they attempt to defend the status quo, they risk an array of collateral damage. For instance, their attempts to thwart Ricker’s in their legally obtained licenses at two stores in Columbus and Sheridan, they took aim at the Indiana Alcohol Tobacco Commission, and drew in Gov. Eric Holcomb, who up until this past month had been “laser focused” on his five-point agenda that didn’t include cold beer. Instead, he stepped in to defend the conduct of this commission.
It created headlines over the past month and drew populist sentiments. Look no further than state Senate candidate Gary Snyder, who will challenge freshman Sen. Andy Zay, when he posted on Facebook, “As your next state senator, I will not vote to regulate the temperature of the beer you buy or what days you can buy it.”
That could be the beginning of a 2018 cycle trend as Democrats attempt to claw back into relevance.
Bring the topic up in a room of average Hoosier Joe Sixpacks, and the notion that you can only buy cold beer at a package liquor store and not on Sunday brings derision. This is the age of Amazon, where people can order and buy just about anything, anytime, anywhere. It will be delivered to your front door, possibly soon by drone. This is an age where the Internet has changed everything, from how you buy your music, shoes, Christmas gifts and just about anything else. It has dramatically impacted the news media, higher education, state taxation, mobility, power and transportation.
Over the past 15 years or so, not only has the Amazonization of America occurred, there has been an explosion of vineyards, craft breweries and the transformation of grocery stores (and their pharmacies) that has opened up the sale of liquor, wine while perpetrating . . . warm beer.
Add in the anti-regulation environment that began here under Gov. Mitch Daniels, continued under Gov. Mike Pence, and has been embraced by President Trump, and what’s transpired is a perfect storm of consumer demand and an assault on rules and regulations. Throw in cunning lawyers who found and exploited loopholes the package liquor store industry knew existed years ago, and there will be news and controversy.
When it comes to the three-tiered alcohol system put in place overnight eight decades ago, these special interests now find themselves defending a status quo that seems absurd to the man on the street. The Average Joe can go to the Broad Ripple Brew Pub, the Oaken Barrel or Big Woods and quaff a couple of pints of beer on a Sunday afternoon, then take home a couple of growlers. But our friend Joe can’t go to the 7/11 and pick up a six of cold Budweiser.
While Marsh, Kroger and Martins have become literal package liquor stores, Joe can’t go in and buy a cold 12-pack. On Sundays, he has to find a brewery or commercial vineyard, or cross into Michigan, Ohio or Illinois to buy cold bottled beer. Joe doesn’t always plan ahead for that Sunday barbecue and this cold suds denial mocks and irritates him.
The 80-year-old three-tier system was thrust into place in 1933, with lessons learned two decades earlier, when brewers sold directly to taverns creating rampant consumption spurred on by saltpeter laced food. Prohibition brought about Al Capone and gangsterism, and when the epic social experiment finally fell apart and produced the 21st Amendment, the three-tier system was created to buffer the flow of alcohol, create a level of consumption control that promoted (to some degree) moderation, and taxation points.
There are some 12,000 points of access for alcohol in Indiana, and tens of thousands of suppliers worldwide. The three-tier system has been enduring because it allows the state to control access points, regulate and tax. Without it, the excise policing would become a vastly larger force than is in place today.
The dilemma for the package store industry is that changing the temperature and Sunday restrictions will put them in direct competition with the big box stores. As one source told me, the more big box stores act like package stores, the more package stores will have to act like the big boxes. There will be price alterations and potentially specialty product deprivations.
The real story here may be the classic “follow-the-money angle.” One observer explained: The wholesalers play an influential role, but you can never tell what side they are really on. Example: Monarch Beverage/CEO Phil Terry claims to be “neutral” on the issue of Sunday sales, but underwrites the liquor store association run by Patrick Tamm to the tune of $7,000, or $84,000 per year. So, while claiming neutrality, they underwrite the biggest opponent of Sunday sales to the tune of about two average-salaried positions each year.
What’s the solution? Legislation by House Majority Leader Matt Lehman last year created a two-year study committee of the entire Title 7.1 three-tier system. The key players also include State Sen. Ron Alting and House Public Policy Chairman Ben Smaltz. That study is expected to be completed in 2018, an election year.
Speaker Brian Bosma, Senate President David Long and others have described the evolved three-tier system as archaic and “antiquated.”
Bosma told the IBJ, “I really don’t have a problem with cold beer. We have to form a consensus over the next couple of weeks or there’s a potential for 5,000 new hard alcohol outlets ... throughout our state. For some that would be a great idea. I presume, once this gets into the hands of the Mothers Against Drunk Driving and the Indiana Coalition to Reduce Underage Drinking and some of the faith communities, once they figure out what this is, people will hear something different at home. We aren’t here to do just the will of what people think ought to be a good idea,” Bosma said. “We’re here to protect the public, to serve as their representatives, to dive deeply in these issues, and to try to do what’s best for all people in the state of Indiana.”
The dilemma is that in this populist environment, and in a new age of consumerism that has put entities like HHGregg, Payless Shoes, J.C. Penney and Sears on the endangered species list, there could be a political cost to those who simply seek to defend the status quo.