5.2. SR 01-08-2001Item #5.2.
City of
E
River
MEMORANDUM
TO:
Mayor & City Council
FROM: Pat Klaers, City Administrator
DATE:
January 8, 2001
SUBJECT: Wine and Beer Sales in Grocery Stores
The 2001 Legislative Session is just underway and the first issue of concern
to municipalities, especially those who have off-sale liquor stores, is a
proposal to allow the selling of wine in grocery stores in the seven county
metropolitan area. It is widely believed that if this legislation is approved it
will expand within a very short time to include beer sales, include
gas/convenience stores, and spread to the outstate area. This in turn would
create some significant enforcement issues for our local police department as
it relates to underage purchases.
Attached for your information is a memo from Chief of Police Tom Zerwas
regarding his concern about the increased number of establishments that
could sell wine.
Municipalities being allowed to have off-sale liquor establishments and a
monopoly on this activity within their city limits allows for easy enforcement
of state laws relating to underage purchases and monitoring any off-sale
liquor transactions. One of the main purposes of this law is management and
control of the industry. Any legislation that would increase our enforcement
costs or erode our current ability to enforce liquor laws would be a detriment
to the city. Additionally, a well run and managed liquor store is a nice source
of funds for special projects and can keep taxes lower. Certainly allowing
wine to be sold in grocery stores would reduce profits at Northbound.
The Minnesota Municipal Beverage Association (MMBA), of which we are a
member, is strongly opposed to the expansion of the liquor laws that would
allow wine (or strong beer) to be sold at any place outside of a licensed liquor
establishment. The MMBA is requesting members to adopt resolutions in
opposition to this type of legislation. Additionally, the MMBA Board has
authorized a membership dues assessment plan to help fund an education
and lobbying effort against the wine in grocery store proposal. Based on
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone (763) 441-7420 · Fax (763) 441-7425
revenues at Northbound our assessment is $5,000. Information on this
assessment plan is also attached.
Recommendation
It is recommended the City Council adopt the attached resolution in
opposition to allowing wine to be sold in grocery stores.
It is recommended the City Council authorize payment of our dues
assessment to help oppose the wine in grocery stores proposal.
Elk River
Police Department
Memorandum
To: Patrick Klaers, City Administrator
From: Thomas D. Zerwas, Chief of Police J~
Date: December 28, 2000 (//
Subject: WINE IN GROCERY LEGISLATION
It has been brought to my attention that the Minnesota Grocers
Association is actively promoting legislation to sell wine in grocery
stores. I would recommend that the City of Elk River pass a
resolution in opposition to this legislation.
My rationale is that Elk River currently has one (1) off-sale
establishment for the sale of wine and strong beer in the City. If this
legislation passes, we could have as many as eight (8) stores selling
wine and event~ally strong beer in their facilities. This would
magnify the problem we currently have in regards to youth access to
alcohol.
At the present time, we assign officers to monitor the liquor store
parking lot to prevent and reduce the likelihood of youth access. If
this legislation passes, it would be impossible to effectively monitor
all locations.
I, therefore, feel it is to our best interest as a city to keep the number
of off-sale establishments as minimal as possible as indicated above.
am recommending the City Council pass a resolution in opposition to
this proposed legislation.
TZ/krna
13065 Or0n0 Parkway · P.O. Box 723 · Elk River, MN 55330 · (612) 441-2324 · Fax (612) 441-8937
Minnesota Municipal Beverage Association
~.,so'r^ ~v~c~, ~ I N C O R P O R AT E D
~ An organization composed of the municipally-operated
dispensaries
of
Minnesota
OFFICERS
PRESIDENT Mike Larson
St. Anthony Village
VICE PRESIDENT
Bob Leslie
Branclon
SECRETARW
TREASURER
Sally Larson
Herman
DIRECTORS
DIRECTOR-AT-LARGE
Scott Olson
Park Rapids
DIRECTOR-AT-LARGE
Nell Wegner
Hutchinson
DISTRICT 1
Mary Ehler
Spring Grove
DISTRICT 2
Ron Radke
Tracy
DISTRICT 3
Sally Larson
Herman
DISTRICT 4
Dan Bahr
Bemidji
DISTRICT 5
Tom Byrnes
Silver Bay
DISTRICT 6
Steve Grausam
Edina
Mike Larson
St. Anthony Village
Brenda Visnovec
Lakeville
DISTRICT 7
Bob Leslie
Brandon
Paul Kaspszak
Executive Director
Tom Ryman
Financial Secretary
Box 32966
Minneapolis, MN 55432
763-572-0222
1-800-848-4912 Ext. 3925
Fax: 763-572-8163
www. municipalbev, com
Position Against Allowing Grocery (General Food)
Stores To Sell Wine
BACKGROUND
In Minnesota, wine intended for consumption off the licensed premises (off-sale) may
only be sold by an Exclusive Liquor Store. The proposal would allow wine to be sold in
grocery stores.
POSITION
MMBA is opposed to this legislation due to its negative affect on preventing drunk driving
and underage alcohol sales and consumption. In addition this legislation would have a
significantly detrimental economic impact on current off-sale retailers.
REASONS
1)
2)
3)
4)
5)
This legislation would significantly increase the number of off-sale establishments
allowed to sell wine (alcohol) - a controlled substance. This increase would put a
large economic and personnel burden on regulatory bodies.
These establishments would be allowed to sell all types of wine products including
wine coolers, fortified wine, sweet "pop" wine and jug wine - products most strongly
desired by underage individuals.
The minimum age to purchase alcohol in Minnesota is 21 years old. The majodty of
current off-sale retailers do not allow persons under 21 to enter their facility to
purchase any items, unless accompanied by an adult. Common industry practice
allows individuals under 21 years of age to enter and purchase products in a grocery
store including cigarettes and lottery tickets. This customer base would make it
difficult to ensure consistent legal sale of beverage alcohol.
The economic impact to current off-sale retailers would be devastating. Current off-
sale retailers are statutodly limited to the types of items they can sell. Grocery' stores
are not limited and will be able to simply utilize wine as a new and significant profit
center to complement their existing inventory. Current off-sale retailers will not be
able to compete.
This legislation opens the door for the elimination of 3.2% beer in Minnesota. (3.2
beer contains not less than one-half of one percent alcohol by volume nor more than
3.2 percent alcohol by weight).
Minnesota law allows grocery stores, gas stations, convenience stores and wherever
beer is sold to sell 3.2 beer. Due to the same regulatory issues concerning regulation
of alcohol and wine, "Strong" Beer (over 3.2%) can only be sold in exclusive liquor
stores. If wine can be sold in grocery stores, there will be little to prevent them from
eventually selling strong beer. Since beer accounts for approximately 60% of off-sale
revenue, most, if not all, small and medium sized off-sale retail operations would be
forced out of business and the alcohol retail distribution system in Minnesota would
be dramatically altered forever.
A bill that would allow wine to be sold in grocery stores will be introduced in the upcoming legislative session. This initiative
will only be defeated through one on one participation and support of industry members.
For several months, MMBA has been encouraging cities to pass a resolution against this concept. Many thanks to the following
cities who have passed a resolution (as of l l/20/O0): Nisswa, Buffalo, Lindstrom, Spring Lake Park, Battle Lake, Mazeppa,
Savage, Renville, Proctor, Braham, Sacred Heart, Morris, Walker, Hutchinson, Edina, Clarissa, Alexandria, lvanhoe, Park Rapids,
Lonsdale, Warroad, Hawley, Two Harbors, Shorewood, Lakeville, Randall, Litchfield, lsanti, St. Anthony I/illage, Worthington &
Silver Bay.
These municipalities have used the sample resolutions on these two pages as guides and made personal modifications as needed.
MMBA continues to request cities to pass a resolution and send copies to their senator, representative and the MMBA office.
n addition, the League of Minnesota Cities recently passed a policy position which states: ,
x"The League opposes any proposal that could result in increased risks of youth access to alcohol and tobacco products and
expanded off-sale venues for the sale of such products."
The opposition has committed $200,000 toward this initiative. However, this is a battle we can win, with your participation.t
Thank you.t.t,t
RESOLUTION OPPOSING THE CONCEPT OF ALLOWING FURTHER PROLIFERATION OF LIQUOR SALES
FROM DISPENSARIES OTHER THAN DULY AUTHORIZED OFF-SALE LIQUOR STORES.
WHEREAS the sale of 3.2 beer by convenience stores, grocery stores, gas stations, and other associated retail outlets for off
premise consumption is currently allowed under Minnesota law, and
WHEREAS
the check out clerks at the aforementioned types of retail outlets are not generally fully trained to recognize fake
identification or in other alcohol management techniques normally required for the employees of duly
authorized off-sale liquor dispensaries, and
WHEREAS
there is a proposal before the Minnesota Legislature that, if adopted and made law, would allow convenience
stores, grocery stores, gas stations and other similar retail outlets to sell wine including sweet "pop" wines, wine
coolers and associated products for off premise consumption, and
WHEREAS the city of (name) is endeavoring to curtail youth access to alcohol and tobacco products, and
WHEREAS the proliferation of the types of outlets where the sale of alcohol provides additional opportunities for youth to
have access to alcohol, now, therefore, be it
RESOLVED by the City Council of the City of (name) that they hereby oppose the concept of allowing the further prolifertion
of liquor sales from dispensaries other than duly authorized off-sale liquor stores.
EAL
Attest: City Official Mayor
MUNICIPAL LIQUOR STORES 10
MMBA
Minnesota Municipal Beverage Association
INCORPORATED
An organization composed of the municipally-operated dispensaries of Minnesota
OFFICERS
PRESIDENT
Mike Larson
St. Anthony Village
VICE PRESIDENT
Bob Leslie
Brandon
SECRETARY/
TREASURER
Sally Larson
Herman
DIRECTORS
,DI RECTOR-AT-LARGE
Scott Olson
Park Rapids
,DIRECTOR-AT-LARGE
Neil Wegner
Hutchinson
DISTRICT 1
Mary Ehler
Spring Grove
DJ ;T 2
~' ~adke
Tracy
DISTRICT 3
Sally Larson
Herman
DISTRICT 4
Dan Bahr
Bemidji
DISTRICT 5
Tom Byrnes
Silver Bay
DISTRICT 6
Steve Grausam
Edina
Mike Larson
St. Anthony Village
Brenda Visnovec
Lakeville
DISTRICT ?
Bob Leslie
Brandon
Paul Kaspszak
Executive Director
Tom Ryman
Financial Secretary
Box 32966
Mi~,neapolis, MN 55432
53-572-0222
1 .~48-4912 ~t. 3925
Fax: 763-572-8163
www. municipalbev, com
Wine in Grocery .... Beer in Grocery...Liquor in Grocery
As you know, the Minnesota Grocers Association (Grocers) has
launched a massive campaign to c'onvince the general public and
legislators that wine should be sold in grocery stores.
While the current proposal would only allow wine to be sold in metro
grocery stores...
...there is a strong likelihood the legislation will be
modified to include areas outside the metro and allow
sales of strong beer!!!! In addition, your city, .even
though it has a municipal beverage facility, will not be
~hle to deny a grocery store from selling this type of
alcohol!!!
To date, it has been projected that the Grocer's have invested
hundreds of thousands of dollars on this issue.
To defeat this initiative;' MMBA is working with organizations
inside and outside the beverage industry.
MMBA and its allies currently plan to spend between
$147,000 - $400,000 on: Focus Groups, Research, Strategizing,
Information Development and Distribution, Media,
On-Site Promotions and More!
Over the past month, MMBA had extensive discussions with
members, exploring ways for the organization to raise revenue
and financially participate in the above activities. As a result,
~: MMBA*bO~i,d~ ~e~or~,:'has authorized.-the fo~ member
1)
Similar to the annual dues procedure, member allocation amounts for
this dues assessment are based on total annual sales, as listed in the
latest (1998) State Auditor' s report:
Sales
Allocation
$6,000,000 and above = $10,000
$4,500,000-$5,999,999 = $7,500
$3,000,000-$4,499.,999 = $5,000
$1,500,000-$2,999,999 = $2,500
$1,000,000- $1,499,999 = $1,250
$750,000 , $999,999 = $625
$500,000 - $749,999 = $315
$250,000 - $499,999 = $160
$0 - $249,999 = $100
Recognizing that circumstances are different in various cities,
members have the option to pay more or less than the requested
amount. In addition, payment amounts can be spread over time
and / or incorporated into your annual dues payment. Please contact
the MMBA office to make .arrangements.
3) Funds raised in this effort will only be used for wine (beer, liquor) in
grocery related projects. They will not be used for other industry
issues or political contributions.
4) Funds will be placed in a separate MMBA bank account and only the
MMBA board of directors or a duly appointed MMBA legislative
committee is authorized to distribute the money.
If assed, the Grocer's proposal will dramatically change the
way alcohol is sold in Minnesota. Your c~ty would lose ~t s
ability to control alcohol distribution, important revenues
would be decreased or eliminated and you could lose your
job!!!
If you have any questions please call Paul at the MMBA office or an
MMBA board member. The telephone numbers can be found in the
enclosed sheet.
Your parffcipation is strongly needed!!!!
Thank you in advance for your support!!
MMBA
Minnesota.Municipal Beverage Association
INCORPORATED
An organization composed of the municipally-operated dispensaries of Minnesota
OFFICERS
PRESIDENT
Mike Larson
St. Anthony V'~lage
VICE PRESIDENT
Bob Leslie
Brandon
SECRETARW
TREASURER
Sally I_arson
Herman
DIRECTORS
DiRECTOR-AT-LARGE
Scott Olson
Park Rapids
DIRECTOR-AT-LARGE
Nell Wegner
Hutchinson
DISTRICT 1
Mary Ehler
Spring Grove
DIE "2
R(~,. ,adke
Tracy
DISTRICT 3
Sally l.arson
Herman
DISTRICT 4
Dan Bahr
Bemidji
D~STRICT 5
Tom Byrnes
Silver Bay
DISTRICT 6
Steve Grausam
Edina
Mike I_arson
St. Anthony Village
Brenda Visnovec
Lakeville
DISTRICT 7
Bob Leslie
Brandon
Paul Kaspszak
Executive Director
Tom Ryrnan
Financial Secretary
Box 32966
Mir'-oapolis, MN 55432
3-572-0222
1-~, ~-t8-4912 Ext, 3925
Fax: 763-572-8163
www. municipalbev, com
Janua~,2001
INVOICE
MINNESOTA MUNICIPAL BEVERAGE
ASSOCIATION DUES ASSESSMENT
TO BE USED FOR DEFEATING
WINE (BEER, LIQUOR) IN GROCERY LEGISLATION
(City)
Amount: ,~~' ~ '~' ~' '~
Please make checkpayableto: MMBA
P.O. Box 32966
Minneapolis, MN 55432
Thank you for your support!!
RESOLUTION 01-
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION OPPOSING THE CONCEPT OF ALLOWING WINE
TO BE SOLD 'FOR OFF PREMISE CONSUMPTION AT ANY OUTLET
OTHER THAN A DULY AUTHORIZED OFF SALE LIQUOR STORE
there is a proposal before the Minnesota Legislature that if
adopted and made'law would allow grocery stores to sell
wine and associated products for off-sale consumption; and,
the City of Elk River is endeavoring to curtail youth access to
alcohol products; and,
the proliferation of the type of outlets that can sell wine
provides additional opportunities for youth to have access to
alcohol; and,
WHEREAS,
this proliferation of the type of outlets that can sell wine will
cause increased police protection costs in the enforcement of
the law pertaining to underage purchases of alcohol.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Elk River that they hereby oppose the concept of allowing wine to be sold for
off premise consumption at any outlet other than a duly authorized off-sale
liquor store.
Passed and adopted by the City Council of the City of Elk River this 8th day of
January, 2001.
ATTEST:
Stephanie A. Klinzing, Mayor
Sandra A. Peine, City Clerk