7.5. SR 01-02-2007
City of EII< River Item Number
REQUEST FOR COUNCIL ACTION 7.5.
Agenda Section I Meeting Date Prepared by
I\dl1Unistratio11 T anuary 2, 2007 Da\Te Potv'in, Liquor Store rv1anager
Item Description Reviewed by
~~utllorization for Council to Send a Letter to Legislators
Regarding \Vine in Grocery Stores
Introduction
.t\.S YOll knO\V, legislation to allo\v \vine to be sold itl grocery stores \vill again be puslled by the fvfinnesota
Grocers ~\ssociation. If tllls COll1es to pass it \vould defuutely unpact tlle control of alcollo1 \ve 110\V llav"e
as \vell as impact re,Te1lue tllat is important to Elk River.
Discussion
It is unportant tllat I, as tlle :tvfanager of Elk Riv"er's liquor operation, becolne in'volv-ed in opposing tIlls
legislation. It is also critical tllat Councils of cities \v~idlliquor operations become involved. \Y/e need to let
our legislators kl10\V 11o\v linportant tllls issue is to Elk River.
I alll askulg tllat as indi\Tiduals and as a Council (as part of a legislative age1lda) you strongly oppose this
legislatioll. I \vould like Council approv"al to send a letter froln dle COUI1Cil to legislators expressing your
oPPOSitiOll to tlle \vine in grocery stores bill. If Council is in Stlpport of sending a letter, please re\Tie\v tlle
attaclled draft letter alld let lne knO\V if you 11ave any cllanges.
Financial Impact
N/~~
Attachments
· Draft letter opposing tlle \vine in grocery store legislatiol1
· "\V'llle in Grocery \X/ould Dralnatically Cllange ~'litlllesota ..t\Jcollo1 La\v" fvIeclia ~~d"visory
· 1\IN J\Iulucipal Be\Terage ~\ssociation l\fedia .L\d\Tisol1T
· Deceluber 13, 2006 Star Tribune article "\Y/ine in grocery stores \vorries city officials"
· Elnail regarding Indiana \v~ine in grocery
· "\\fine in Grocel1T Talking Points"
· Si\~1RTLetter and D\TD
Action Requested
.r\ COUnCillTIotion autllorizing staff to se11d tlle attaclled letter froln Council opposing tlle \vine in grocery
stores legislation.
Council Action
i\Io cion bv
Second by
,rote
Follow Up
S:\OFFSITE\LIQUOR \ \'\r'ine in f,rroceI}' Letter.doc
IT)) [RlL~JI~u
Jal1l1ary 3,2007
Re: Wille ill Grocery Stores
Represell tati \T e/S ellator:
TIle Millllesota Grocers Associatioll is, Ollce agail1, pllSllil1g legislatioll to allo\v \vine to
be sold ill grocery stores. If passed, tl1is legislation \vould have a negative ill1pact 011 an
ill1portal1t SOllrce of revenlle for tIle City of Elk River. TIle profits froln our liqllor
operations go illtO COll1111Ullity projects alld llelp lo\ver property taxes.
A1lotller cOllseqllellce of tile proposed legislation \VOllld be tile loss of control of alcoll01
sales Wl1iclll11l11licipal operatiollS 110\V llave \vithill tl1eir COllll1ll111ities. Along \vitIl profits,
cOIltral is all esselltial reaSOll cities l1ave liqllor operatiol1s. TIle State of Mil111esota l1as a
good systell1 ill place to lill1it sales of alcohol to ll1illors alld it would be a step backwards
to allo\v tIle sale of \Vil1e ill grocery stores.
Weare aslcil1g YOlI to oppose tllis legislation alld llelp tIle City of Elk River continue to
sell alcoIlo1 respollsibly alld for the bel1efit of Ollr citizellS.
Sillcerely
Mayor StepIlanie Klillzillg
011 beIlalf of tIle Elk Ri\Ter City COlIllCil
S:\OFFSITE\LIQUOR\ \Vine in grocery letter2.doc
Wine In Grocery Would Dramatically Change
Minnesota Alcohol Law
The following Media Advisory was sent to press throughout Minnesota, on October 30, 2006.
(Minneapolis) After years of legislative failure, the Minnesota Grocers Association (Grocers) is, once again, conducting a large-scale
public relations campaign to allow wine to be sold in grocery stores (WIG).
A coalition of private and public organizations, including the Minnesota Municipal Beverage Association, opposes the WIG initiative
to greatly expand the number of outlets allowed to sell alcohol. If experiences in other states are a predictor, WIG will someday
expand into strong beer and / or spirits in grocery, and / or convenience stores, - dramatically changing Minnesota Alcohol Law.
The Grocers state, "This (WIG) convenience is enjoyed in 33 other states." What they fail to mention is that three-fourths of states
allow strong beer to be sold in grocery stores and about one-third of states allow distilled spirits to be sold in grocery.stores.
According to the Minnesota Legislative Auditor, ". ~ ~ the pattern is similar for convenience and drug stores. A slightly higher number
of states allow drug stores to sell alcohol beverages, while a slightly lower number allow convenience stores to sell these products."
Number of States fincludin'i the District of Columbia) Allowin~ Alcohol Beverages to Be Sold in Various Types of Stores
Type of Store
Drug
Grocery
Convenience
Strong Beer
42
40
37
Wine
37
33
31
Sprits
22
17
16
While the cur'rent proposal only addresses wine in grocery stores, future expansion into strong beer and spirits in
grocery stores, and wine, strong beer, and spirits in conv~nience stores, (with or without Grocer support), is inevitable.
The Grocers also state, (WIG) is i'supported 2 to 1 by Minnesota consumers.7~
However, two separate, previously unreleased, polls conducted by DRS Acquisitions, Woodbury 1\1:N", indicate Minnesota
consumers dramatically oppose alcohol (wine) being sold in grocery stores. Consumers also think it is currently "easy" to
~ legally purchase alcohol products, and would be "concerned" if Minnesota were to significantly expand the number of retail
outlets allowed to sell alcohol. (polling results are attached. For further information on the poll, contact Pat Haggerty, Haggerty /
Schatz, at-Office: 651.778.9394 or Mobile: 651.235.0775)
According to the Legislative Auditor: "...Policymakers should be cautious in considering dramatic changes in Minnesota's
retail (alcohol) laws. Ev~n a minor increase in the co~ts of alcohol abuse would offset the savings consumers would receive
from lower prices and improved convenience."
2006 Wine in Grocery Ouestions and Responses.
1. Under the current state law, how difficult is it for you to legally purchase alcohol products?
Easy...791 Adequate... 147 Difficult... 62
2. If Minnesota were to significantly expand the number of retail outlets allowed to sell alcohol would you be
Concemed?..448 Indifferent?..244 Unconcerned?.~308
3. Is it a gooq idea to increase the exposure of children, to the retail sale of alcohol?
Yes...l04 No...896
4. Would you support a law prohibiting anyone under 21, from entering a retail liquor outlet, unless accompanied by
parent or guardian?
Yes....825 NOu.175
5. Do you think alcohol should be sold in grocery stores?
Yes...359 Nou.641
2005 WIG Polling Results
1. Under the current state law, how difficult is it for you to legally purchase alcohol products?
Easy... 724 Fairly easy... 121 Adequate... 98 Fairly difficult... 21 Difficult... 36
2. If Minnesota were to significantly expand the number of retail outlets allowed to sell alcohol would you be
Very concerned?~.. 250 Somewhat concerned?.. 254 Indifferent?....301 Somewhat at ease?...... 91 Very at ease?.... 104
3.. Is it a good idea to increase the exposure of children, to the retail sale of alcohol?
Yes.... 105 No.... 895
4. Would you support a law prohibiting anyone under 21, from entering a retail liquor outlet, unless accompanied by
parent or guardian?
Yes.u 846 No...154
5. Do you think alcohol should be sold in grocery stores?
Yes....370 No....630
MUNICIPAL LIQUOR STORES 22
42
40
37
Wine
37
33
31
22
17
16
Page 1 of3
Page 1 of2
Potvin, Dave
From: kaspszak [kaspszak@visi.com]
Sent: Wednesday, December 13,2006 9:21 AM
Subject: StarTribune Article
In today's Metro North Section.......
lstarTribuneocom ~ MINNEAPOLIS -ST. PAUL. MINNESOTAI
NALCOHOL 121306
Last update: December 12, 2006 - 4:22 PM
Wine in grocery stores worries city officials
Officials worry about the effects grocery store wine sales would have on city-owned liquor stores -- and, they saYI
on safety.
Sarah Moran, Star Tribune
A recent push to allow wine sales in grocery stores isn't winning friends among some people in cities that own
liquor stores.
City officials who oppose a change in the law say there would not be enough control over underage purchases
and shoplifting at grocery storesl that beer and liquor might eventually be allowed on grocery store shelves} and
that taxes will increase or city services will decrease to make up for cities' loss in revenue.
In the north-metro area, Anoka, Columbia Heights, Fridley and 81. Anthony make $175,000 to $5001000 a year in
profit at city-owned liquor stores.
That money goes back into cities to reduce property taxes, pay for park improvements or buy equipment for police
and fire departments.
81. Anthony planned a forum this week for city managers, mayors and liquor managers across the metro area to
build opposition to grocery stores selling wine.
The issue resurfaced this fall after a legislative audit this spring concluded that banning wine in grocery stores
creates a lack of competition that costs consumers millions of dollars a year. Grocers are pushing again to
change the state law. They say shoppers want convenience and that they can handle alcohol responsibly, just as
they have handled tobacco and food.
State law has said that in a given city, liquor stores can be either privately owned or city owned, but not both.
Grocery stores that sell alcohol can only sell it in a separate, walled-off space with its own entrance and cash
register.
Convenience, safety arguments
Customers at one of three Columbia Heights liquor stores had a range of views on the city running such
operations. Some had never thought about itl some thought it was good for the city to keep a watchful eye over
sales and put profits back into the city, and others simply wanted to be able to buy wine with their groceries.
Although Paula Bergl a resident of Columbia Heights, says wine should be allowed in grocery stores because it
12/14/2006
Page 2 of2
goes naturally with food, she said the longtime ban could be a hard change.
liThe city does need that revenue stream," she said.
Dave Duwenhoegger, liquor operations manager for Anoka's stores, said even more important than the revenue
is safety. He said 15- or 16-year-olds milling around the grocery store wine aisle aren't going to draw attention like
they would in a liquor store.
liThe wine in grocery stores [effort] is pushing convenience, and I think that safety is more important than
convenience,1I he said.
City officials say they work closely with their public safety departments to train employees - all of whom have to
be 21 or older - and to conduct undercover checks.
Paul Kaspszak1 executive director of the Minnesota Municipal Beverage Association, said in liquor stores, lIour
decision on whether to serve somebody starts when they walk through the door.1I Recently a man staggering out
of a taxi in Rogers didn't get served. A man asking for separate receipts in a college town was denied a sale.
lilt's a controlled substance that, when used improperly, leads to problems,ll Kaspszak said. IIMaybe it should be a
little more difficult to buy.1t
Thomas Johnson, Columbia Heights police chief, said grocery stores could be more likely to have problems such
as shoplifting.
"There's a potential of additional resources being needed as far as violations that could take place," he said.
Grocery industry: 'We're ready'
Grocers say they are merely responding to customers' desire for convenience and wouldn't do anything to
jeopardize public safety.
Jamie PfuhlJ executive director of the Minnesota Grocers Association, said grocers in the state have agreed to
follow a code of conduct that includes posting age restrictions, guaranteeing that cashiers under age 18 can't sell
alcohol, training employees and working with police.
"We believe and know we can manage wine responsibly,lI she said.
Sarah Moran · 612-673-7512 · smoran@startribune.com
@2006 Star Tribune. All rights reserved.
I
12/14/2006
Page 1 of2
Potvin, Dave
From: kaspszak [kaspszak@visi.com]
Sent: Wednesday, December 06,2006 3:31 PM
Subject: [Fwd: Indiana Liquor in Grocery]
FYI from the Minnesota Licensed Beverage Association.......
-------- Original Message --------
Subject:lndiana Liquor in Grocery
Date:Wed, 06 Dee 2006 15:07:06 -0600
From: <update@mlba.com>
To:Update <update@mlba.com>, Patrick Doyle <pdoyle@startribune.com>,
<lsturdevant@startribune.com>, <tscheck@mpr.org>
The state of Indiana[ since the time of Prohibition has allowed wine and beer to be sold in grocery stores. The
only reason for liquor stores to exist in the state of Indiana is to provide a place for the retail sale of spirits.
In 2003 there was an effort to allow spirits to be sold along side beer and wine in a grocery store. The spirits
proposal was supported by a coalition made up of DISCUS (Distilled Spirits Council of the United States)[ the
Indiana Grocers Association[ the local convenience store association and drug stores. The coalition fell apart
when the liquor storesl with the leadership of the Indiana Association of Beverage Retailers[ and quietly
supported by the Indiana Spirit Wholesalers[ proposed defining a grocery store in a manner that left out the
convenience stores and drug stores. Both proposals failed.
However[ the issue did not go away. In the December 5[ 2006 story below1 you will read how a local unit of
government in Indiana is being forced to allow spirit sales in grocery stores because of 2005 action by an
administrative agencYI the Indiana Alcohol & Tobacco Commission. Pushed by grocers to allow spirit salesl
rf- the comm~~.~~~_~~mes a court order for its bad decision. _--------~
\
This action by the grocers shows that they have every intention of wanting to sell all three forms of alcohol; \
beer[ spirits & wine. It also shows that while the Minnesota Grocers publicly proclaim they do not want to sell )
strong beer and spiritsl the Minnesota Grocers are very much aware of the desire of manufacturers of spirits
to have their products sold in a grocery store. The Grocers do not conduct business in a vacuum. While not
taking the leadl it is reasonable to assume that Minnesota grocers would support efforts by others to allow
strong beer and spirits t<;> be sold in Minnesota grocery stores. Sadly I the local officials in Indiana are telling ~
MLBA staff that they are jealous of Minnesota's model of alcohol control and wish that Indiana law makers had
the foresight and wisdom to have adopted a similar model after the repeal of Prohibition.
The Minnesota Grocers have a campaign based on the selfishness of convenience. They are appealing to their
customers without giving the whole truth. Fortunately[ legislators are given the opportunity to learn more and
to say no to Wail-Marti Costeo[ Super T~rget & SuperValu.
Please help distribute this information.
htto: / /www.southbendtribune.com/a DPS/pbcs. d Ilia rticle? AI D = /2006120 5/NewsO 1/61205022
Local
SouthBendllibune.com
December 05.2006 3:53PM
12/8/2006
Wine in Grocerv TalkinI! Points
../ Convenience should never comDromise our public safety. For beverage alcohol retailers, the decision to serve
alcohol begins when the individual walks through the door. It does not start and end at the checkout counter.
Selling alcohol is much different than selling cereal, soap and thousands of other items. Selling wine for
"convenience" is a serious public safety issue.
../ Supermarkets can already sell wine. What puzzles us most about this whole issue is that they can already sell
wine! Cub, Byerly's, Casteo and Sam's Clubs are perfect examples. Alcohol is a controlled substance, and the laws
that govern how it is sold are in place for a reason. They work.! !
../ Don't be fooled.. beer is next. There is no difference between "Wine with Dinner," Beer with a Burger, or a
Martini with a Steak. In addition, The Grocers state, "Wine in Grocery is a convenience enjoyed in 33 other
states." What they fail to mention is that three-fourths of states allow strong beer to be sold in grocery stores and
about one-third of states allow distilled spirits to be sold in grocery stores.
../ Fiscal impacts would hurt many cities. Throughout the state, cities with municipal beverage operations would
lose valuable revenue. In addition, this legislation would negatively impact a municipality's tax base, by forcing
small independently owned retailers to close their businesses.
../ The public does not support the proDosal. Two separate polls conducted.by DRS Acquisitions, Woodbury Iv1N,
indicate Minnesota consumers dramatically oppose alcohol (wine) being sold in grocery stores. Consumers also
think it is currently "easy" to legally purchase alcohol products, would be "concerned" if Minnesota were to
significantly expand the number of retail outlets allowed to sell alcohol, and are overwhelmingly against
increasing the exposure of children to the retail sale of alcohoL
../ The state of Minnesota is concerned. According to the Legislative Auditor: ".. .Policymakers should be cautious
in considering dramatic changes in Minnesota's retail (alcohol) laws. Even a minor increase in the costs of alcohol
abuse would offset the savings consumers would receive from lower price~ apd improved convenience."
.../ It's not about "convenience" at all. If they were really talking about convenience, why have the grocers drafted
tp.eir bill to exclude the smaller entrepreneurs and convenience stores? It's not about convenience. It's about the
supermarkets wanting to add even more profit to their bottom lines.
F or more information:
.~
~
www.minnesotasmart.com