State panel proposes liquor store rule changes
Requirement that store locations must be at least a half-mile apart would be overturned.
The state Liquor Control Commission is pushing to allow liquor stores to locate closer to each other, saying an existing rule prevents competition and denies opportunities for small business owners.
The commission recently voted to repeal the current restriction, in effect since 1979, which prohibits stores from being located within a half-mile of each other, said David Harns, public information officer for the Department of Licensing and Regulatory Affairs. The Legislature’s Joint Committee on Administrative Rules must agree to the change for the repeal to go into effect.
Rep. Steven Johnson (R-Wayland), who chairs that committee, said he supports eliminating the half-mile restriction.
“To say a company can’t operate within half a mile of another that sells liquor is anti-free market,” he said.
“The artificial half-mile boundary has stifled competition in an industry that should be open and free for small businesses to serve their local communities,” he said.
But the move has generated some opposition from existing retailers fearing competition and legislators concerned about having too much liquor in one place.
“I don’t see a reason for it,” said Joshua Botsis, owner of Southside Party Store in Holland. “It will only negatively influence the stores that already exist.”
Sen. Rick Jones (R-Grand Ledge) introduced a bill in June to make the half-mile rule a law. If the rule were to become a law, the Liquor Control Commission would be unable to rescind it.
“The rule for 40 years was that liquor stores had to be a half-mile from each other,” Jones said. “Now, an unelected board can change that rule.”
The Senate Regulatory Reform Committee sent an amended version of the bill to the full Senate.
Jones said his concern is the potential increase in the number of liquor stores in a certain area.
“Cities are nervous about having a liquor store on every corner,” Jones said.
But Harns said such fears are unfounded. The Liquor Control Commission cannot increase the number of licenses allowed. The commission can issue one license for every 3,000 people in a city, incorporated village or township.
“The false claim that there will be a liquor store on every corner is absurd on its face,” Harns said. “It is impossible by law to have a liquor store on every corner unless the Legislature passes a law that would create more licenses.”
Jones contends the change will impact small, locally owned stores.
“Families could lose their life savings,” he said. “When they opened their stores, they expected to not have any competition for half a mile. With this rule, a store could open right next to them and take away their business.”
Jeff Dobler, owner of the Beverage Company in Traverse City, said the rule benefits only large stores like Meijer.
“With this, a Meijer can build right next to a Costco and compete for their business,” Dobler said. “Small stores benefit from having a little bit of distance.”
Small stores will not be able to compete with big ones, Jones said. “This allows big box stores to run out the little guys.”