2009 State of the Six Pack - Part 3

When the New Year begins, it is not uncommon to reflect on the year that had past and ponder what lies ahead in the coming year. Organizations give annual reports. Newspapers and television shows do special review pieces. Politicians give their annual address (the President’s State of the Union, the Governor’s State of the State, the Janitor’s State of the Mop Bucket, etc.).

It is in this spirit that Hoosier Beer Geek sent a Six Pack of questions to everyone we knew in the Indiana craft beer industry. Breweries, bars, restaurants, distributors, and stores across the state were included in this Six Pack. We packaged their comments, along with our thoughts, into the first annual State of the Six Pack address.

We have broken this up into three parts. Today, we conclude with thoughts on Indiana’s laws relating to beer and alcohol. Tuesday, we looked at the economic factors that have played into the Indiana craft beer market. And yesterday, we discussed the craft beer market slice of the larger beer market pie. We hope that you found this to be as interesting and illuminating as we did.

Question: The legislature may look at Indiana's blue laws. But instead of this being a battle between 18th amendment loving puritan Hoosiers and 21st amendment loving party Hoosiers, it looks to be grocery/convenience stores versus liquor stores. What are your views on the Sunday sales issue? What impact (positive/negative/any?) do you see this debate having on your business and the craft beer market in Indiana?

In discussing Indiana alcohol laws, Elizabeth Morse at Corner Wine Bar and Old Town Ale House sums up well what most beer drinkers think: “Indiana alcohol laws are archaic and difficult to change. An enormous change to the current system would come as a big surprise.”

So it came as a bit of a surprise when a lot of noise was being made about Sunday carry-out laws and that there was a push for a change. Of course, it shouldn’t be a surprise to anyone that right out of the gate, the legislative powers-that-be declared the issue dead and call for a moratorium to legislation related to liquor laws.

Because Indiana’s liquor laws are changing at break neck speeds.

Insert eye roll here.

But there are many that think a change is coming. And the driving force is the 2012 Super Bowl that Indianapolis will be hosting. Football and beer: life partners.

Jim Schembre at World Class Beverages sums up the number one reason to support allowing Sunday sales: “It will be more convenient to our consumers and that has value.”

But he is also quick to point out, “As a wholesaler we do not think it will have much impact on total beer sales. We do not believe consumption will go up…And as it relates to craft, the impact will not have much effect. At least, no more than it would on the mega beers.”

Cavalier Distributing’s Mat Gerdenich points out that the proposal to limit Sunday sales to grocery and convenience stores would likely have no impact on most craft beer sales. “Do you ever expect to see Thomas Hardy's Ale, JW Lees, Struise, or Mikkeller in a mainstream mega grocery store?”

Simply put: “[The Sunday sales] law is ridiculous and needs to be done away with,” says Courtney Hall at The Hop Shop. “There is no argument that I have ever heard to forbid the sale of alcohol on Sunday that does not lead back to religion…In addition to that, the law has been changed to allow restaurants and sporting events to serve alcohol on Sundays. So apparently, it is okay to buy alcohol from certain businesses, just not others.”

Question: There is an ongoing movement away from away from the traditional brick-and-mortar retail sales to online retail sales. Would you welcome changes to Indiana's laws to allow shipping and receiving of beers across state lines? Do you see great opportunities in selling Indiana beers online? Do you have concerns about out-of-state shipments into Indiana impacting your business? And what are the realistic chances of this ever happening in Indiana?

Jim Schembre answers our question with another question, “[W]hy does a consumer want to buy on line? Is it price, variety, or convenience?” And that’s a very good question. With traditional retail, I suspect price and convenience are the main answers. But in an industry that is as heavily regulated as alcohol production and sales, the answer for most craft beer enthusiasts is variety. Gaining access to beverages not available in Indiana is the biggest reason why Hoosier beer and wine drinkers are asking for changes to the law.

But it isn’t just Hoosier consumers that stand to gain. “I would be all for updating Indiana’s antiquated liquor laws to allow shipping,” says Courtney Hall. “There are many beers that we get here in Indiana that other states cannot get, which would allow us to offer them a product that they cannot purchase at traditional retail in their own state.”

Mike Sprinkle agrees. “I think it is only fair to open up the market. Lots of people want Indiana beers that cannot get it and I would love to have access to a lot of the brews we can’t get. It’s totally realistic. We have some pretty stupid shipping laws in Indiana.”

“There are lots of issues about who is buying it,” says Jim Schembre. “Who is collecting the taxes? And who is ultimately drinking it? If we had no rules or laws that say anybody can drink alcohol at any age then I think direct shipping to consumers should be legal. But people sometimes forget that we are not selling chocolate. Alcohol is a controlled product. So until we change that law, we must protect its availability to the market.”

In discussing the Sunday laws, we found that there were differing viewpoints on who should be allowed to sell cold carry out beer.

Mike Sprinkle: “I would welcome Sunday sales. On the other hand, I don't think Groceries should be able to sell cold beer and they should be more regulated. I know no one under 21 can come into my store, yet kids run free through the liquor and beer isles.”

Courtney Hall: “[Sunday sales] is also somewhat intertwined with the idea of being able to sell cold beer in grocery and convenience stores. This is another ridiculous law that unfairly favors businesses that have a 3 way package liquor license. We are now the only state that still limits cold beer sales to only one type of license.”

Outside of the Sunday and shipping laws discussion, there were plenty of additional comments about Indiana’s liquor laws.

Roger A. Baylor: “The most sadistic and hypocritical aspect of this topic is the fact that I can go to a small winery and buy wine to go on Sunday, but can’t sell beer to go from my small brewery. Almost as bad, it encourages people to drive drunk by forcing them to consume on-premise rather than drink at home. Beyond this, the Sunday sales dispute primarily is about who gets to sell cases of swill, so I can’t say it impacts us. I will say that from the perspective of living in New Albany, across the river from Louisville, Indiana hemorrhages tax revenue each and every Sunday. It’s hilarious to me that Their Man Mitch constantly talks the free-market talk, but very little of it ever seeps into the regulatory regime of alcohol in Indiana. Any “realistic” prospect of anything happening that pertains to alcohol sales has to do with one thing, and one thing only: The prompt and efficient collection of tax revenue, so that tax “breaks”can be awarded elsewhere. To me, sensible laws relating to interstate commerce should not except or exempt alcohol sales.”

Mat Gerdenich: “The bigger question…can anybody even have a realistic chance on changing any laws in Indiana? We are still two of 50 states that do not sell alcohol on election days. Let's see if we can avoid being the 50th state on this issue. We got to crawl before we can walk much less run.”

It appears that everybody, in varying degrees, agrees that Indiana could use some changes to our alcohol laws. The biggest challenge, though, appears to be getting everybody on together on the same page to push forward changes we all can agree to. Changes won’t likely come when different segments of the industry disagree. Liquor stores, convenience stores, grocers, breweries, and wineries all need to find common ground and build on it.