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State considers expanding beer and wine sales to smaller stores

December 31, 2012
TAGS beer / wine
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LANSING — Proposed changes to Michigan’s alcohol licensing regulations have some residents up in arms, but supporters say those in the business of selling booze could benefit from looser requirements.

The Office of Regulatory Reinvention’s Liquor Control Advisory Rules Committee has recommended changes to the Liquor Control Commission in hopes of making regulations more business-friendly and easier to comply with.

The committee of business owners and citizens is part of the Department of Licensing and Regulatory Affairs and was created to address discrepancies between an aging framework of liquor control and the realities of modern sales and consumption, said Phil Hendges, an attorney with the Office of Regulatory Reinvention.

One aspect of the plan would let more gas stations and convenience stores sell alcoholic products by easing liquor control standards.

Currently, the Liquor Control Code mandates convenience stores and gas stations to maintain an inventory of $250,000 or more — excluding gas or alcoholic beverages — to be eligible for a liquor license.

According to the office, such a requirement places an unnecessary burden on those operations, and the advisory committee recommended lowering the inventory requirements to $50,000.

Under the proposal, the stores affected would be able to sell only beer and wine, not hard liquor.

Hendges said the framework of alcohol regulation is outdated and could use a revamp to encourage more business activity and provide more alcohol outlets.

“It’s an area where the basic regulatory framework dates from 1933 — it’s very complex and not really suited to the modern marketplace in many respects,” he said. “The committee determined the mere presence of gas pumps didn’t cause any greater risk or problems than for a store that did not have them.”

Any stores that apply for licenses under the proposed change would still be subject to the same standards as other retailers selling alcohol, he said.

While the proposed change may be good for some businesses, representatives of some family-owned liquor operations say they are concerned it would hurt local communities. Some owners addressed the commission at its recent public hearing to voice such concerns.

Mike Lashbrook, president of the Michigan Beer and Wine Wholesalers Association, said the current system creates an atmosphere where independent retailers, distributors and brewers can thrive. Changing that system could upset the balance and cost communities jobs and variety, he said.

“In the state of Michigan, the system lets the small guys compete whether it’s at the retail, distribution or manufacturing level,” Lashbrook said. “If you change it, it’s going to allow mega-suppliers and brewers to start essentially buying the system.”

Lashbrook also said the association is concerned law enforcement agencies could have more difficulties regulating alcohol in convenience stores and gas stations to keep the public safe.

“It’s a unique substance — it needs to be regulated at a higher standard than a box of cornflakes or a bag of potato chips,” he said. “Public health and safety should be the highest priority.”

The commission has not made a final decision, said Andrea Miller, its press contact.

Hendges said any changes are a long way away because the process is just beginning, and any substantial modifications would have to go through the Legislature.

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