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“It is clear the monopoly liquor stores have limits consumer choice and hurts the growth of our state’s economy.”

Convenience stores file federal appeal over cold beer

Statement as issued Tuesday by IPCA:

INDIANAPOLIS (July 15, 2014) – Executives and members of the Indiana Petroleum Marketers and Convenience Store Association (IPCA) announced today that they will continue their legal challenge of Indiana’s law governing the sale of cold beer with an appeal in federal court and a lawsuit in state court challenging Indiana’s unfair alcohol law.

“Our members and the public understand Indiana’s alcohol laws lack common-sense and we are asking the state and federal courts to put an end to this,” said IPCA Executive Director Scot Imus. “It is clear the monopoly liquor stores have limits consumer choice and hurts the growth of our state’s economy.”

In the federal appeal filed today in the U.S. Court of Appeals, Seventh Circuit, IPCA and its members state there is no rational basis to allow liquor stores to hold a monopoly on cold beer particularly when their compliance rate with Indiana alcohol laws is so poor. The U.S. District Court’s decision in June failed to overturn an archaic law regulating the sale of beer based on temperature.

In addition, the IPCA and its members have filed a lawsuit in Marion County Superior Court claiming Indiana’s alcohol law regarding cold beer sales violates the Indiana Constitution.

Under current Indiana law, convenience, grocery and pharmacy stores are only allowed to sell beer warm, while their competitors in the carryout market are allowed to sell beer cold. The law doesn’t apply to wine products, thus allowing convenience stores to sell these products cold. On average wine products, including wine coolers, contain higher levels of alcohol compared to beer.

Proponents claimed that liquor stores should maintain market share over the cold beer market, since owners are required to operate under more regulations than other retailers. However, the Indiana Alcohol and Tobacco Commission’s figures show that liquor stores have one of the worst compliance records. Since 2005 liquor stores received 1,877 violations, which equates to 1.73 violations per permit holder. During that same period convenience, grocery and pharmacy stores only received 928 violations or .321 violations per permit holder.

Additionally, the Indiana State Excise Police conducts a Survey of Alcohol Compliance which consistently shows convenience stores perform better than liquor stores at preventing the sale of alcohol to minors. Since 2010 stores with liquor permits averaged an 18.9 percent failure rate while stores with grocery permits only averaged a 7.7 percent failure rate. Convenience stores are issued grocery store permits.

“Convenience stores’ record of compliance clearly demonstrate that owners and associates are responsible retailers who know how to best keep alcohol out of the hands of minors,” said Imus. “Employee training programs and technologies are investments convenience stores make to keep their stores safe and successful.”

A look at the history of beer sales in Indiana shows a constantly changing regulatory environment. Coming out of Prohibition, only confectionary stores were allowed to sell cold beer. That practice ended when the General Assembly passed a law prohibiting such sales in 1941. Liquor stores could not sell beer - warm or cold - until 1953, and then, like other retailers, they were forced to sell it warm. A 1963 decision by the unelected three-member Indiana Alcoholic Beverage Commission granted liquor stores in metropolitan areas the right to sell cold beer. These changes were eventually codified into statute in 1979.

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