Tuesday, August 10, 2010

Utah Getting Out of the Liquor Business?

Is the State of Utah Getting out of the liquor business? Believe it or not it's being discussed by some of Utah's state legislators.

Here's the idea. The state would sell all of it's liquor stores to the private sector, they would all be independently owned and operated. The state would still set prices and control amount of taxes.

Right now the tax on liquor, wine and heavy beer is 85%. That's pretty steep for an independent retailer. The state would have to drop the tax to a reasonable level to make it possible for a these newly privatized stores to make a profit and pay employees.

Beer has not mentioned in the plan. However, if I was buying a liquor store you could bet your sweet ass that I would provide refrigerator units inside for beer.

No word on what would happen to the DABC warehouse or if the distribution model would change.

Remember, this is very preliminary info. It's in the earliest phases of discussion.

Here's Fox13 report on the story.
 
What are your thoughts? Is this a good thing? - could it mean much higher costs at the liquor stores? - could it bring in retailers like Trader Joe's?

Cheers!

18 comments:

Plang said...

Won't happen. The state would be giving up control, which too many of them would hate to do. They would also be giving up a revenue stream. They would make a quick buck by selling, but they would be giving up millions a year in revenue that the stores bring in. And good luck getting them to reduce that tax. Even if the state did reduce the tax (which means even less money for the state) the private owners would add on their profit margin and keep prices at or above where they are now.

Plang said...

By "they" I mean the legislature.

Mikey said...

Yeah, I'm gunna have to agree. There's really no way to keep the states cash flow while keeping liquor, wine & beer prices from going through the roof.

There's one thing that would help the state save money. Get the heavy beer out of state warehouse and put it with the distributors where it belongs. They'd still get all their taxes without the cost of transporting and storing it.

james p said...

when the state announced it was closing the SLC liquor store on main and about 14th south a few months back, there was a moderate backlash from some conservatives who pointed out that the DABC pyramid is one of the few utah entities that is consistently in the black.

it would be pretty short-sighted for the state to privatize the industry, and, as Plang mentioned, prices most likely would go up, not down, even with a tax decrease. it sucks buying warm beer and having to deal with the state's hours, but frankly, it could be worse.

i'm living in new jersey while i'm going to law school, and i appreciate the ability to buy liquor and beer from 7 a.m to midnight. but i can't buy beer at 7-11 or the grocery store; i have to make a special trip. everybody in utah thinks our system sucks, but having at least the option to pick up a 12er of cutthroat at 12:55 at my corner market is pretty sweet.

my point is, there's balance to our system, and it's not a terrible one. the state makes money, availability isn't totally unreasonable (as long as you don't want wine or liquor, i guess), prices don't fluctuate much, people have jobs, etc. could be worse.

Tilley's Mum said...

Yeah I don't think the State is going to give up that revenue either, that make way too much money -- and plus, what would the children do without all their school lunches? Won't somebody think of the children?

But Mikey you bring up a good point about the beer storage -- you'd think with all the revenue they're getting they could at least invest in some refrigeration units for the warehouse and stores.

I'd personally like to see heavy beer on draft ... I know the legislature has considered that in the past and I think they should be looking at that instead. (Of course the DABC would be storing heavy beer kegs at a warmer temp, but at least it's a step in the right direction)

Mikey said...

T, what I proposed would put the beer distributors in charge of storage at their own facilities. No storage at the DABC.

Anonymous said...

"...there's balance to our system..."

Like Hell there is. A six pack of decent beer that would cost $6 (or less) anywhere else costs up to $15 in Utah - and it's warm when you buy it. Meanwhile, prices on whiskey and other high-point liquors are more in line with the national averages. This crazy pricing schedule penalizes the buyer for purchasing lower-proof beverages like beer - which is just the opposite of what you'd think a "tea-totaller" would want.

Douglas said...

I'm from Pennsylvania where similarly there is a state liquor/wine (not beer) monopoly. They have talked about privatizing for many years, but the employees who essentially have cushy government jobs have lobbied hard for no changes. I don't see how privatization reduces the amount of taxes the state gets, they will still tax everything at a high amount. But they will not have to pay for running the system. It could work, but they need to compromise on taxation levels, licensing, ending the 4% thing, etc.

Josh said...

I'm completely in favor of any steps they could possibly take towards privatization, especially regarding beer, even if it bumps costs up more in the short term. The system we have now just plain doesn't work, and really holds back our beer scene. As much as it's gotten better in the last couple years, it could be so much more. When I read the stuff about how states that have gone private have had less selection, I have to laugh. Our beer selection is atrocious, especially in liquor stores that aren't one of the 4-5 that actually get some good stuff. Anything that happens now will be good in the long run, and will be another baby step towards full normalization. I will be very disappointed if I see any local breweries fighting against this. But I suspect the opposition will mostly come from Waddouche, Valentine, and our local rogue MADD chapter.

Tilley's Mum said...

Yes, you did say that Mikey, mea culpa! Guess I should finish my coffee before I post a comment ;)

Mikey said...

T, What have I told about writing before coffee? tisk-tisk

Regie said...

Only in Utah would the government give up a $27.6 million stream of revenue (2009) and get out of the booze "business." They have never operated in the red across the board. Privatizing would allow them to set prices (read: increase profit for the state), and tax the crap out of any profit the new store operators would have after a 100% markup.
That being said, it would be nice to get a cold sixer of my favorite brew instead of the room temp swill they vend to me now. The only way that will happen is to privatize, unless the Utah state legislature mysteriously disappears...
Cheers!

Anonymous said...

To Anonymous
There is no way you could buy a six pack for 6$ or less have you been out of state lately beer prices are up all over the world due to malt and hop prices a six pack of Rouge in Oregon is 9$
Jim

Anonymous said...

This is another example of how moronic some of our legislators are. If they want to make the most off of liquor taxes, they should allow the grocery stores to sell liquor, wine and beer like Arizona does - I imagine established stores would have less overhead than the DABC. But there is no sense diverting profits to a corporation that would run stand alone liquor stores much like the system we already have. I would rather see Utah continue to keep the revenues and spend them on public projects if they insist on keeping the liquor in specialty stores.

Brian said...

I'm just looking forward to some awesomely-ridiculous quotes from legislators and MADD reps arguing for and against this change!

Aaron said...

Being able to buy a keg in-state would be great. Currently, Utah residents send most of that money to Wyoming.

J. said...

Any push to privatize should make amble use of the fact that it is socialism in the purest sense, and link it to Obama, then it'll pass for sure....

Stacey said...

the Mormon Mafia will NEVER get out of alcohol sales, which is so unfortunate because we're talking beer, here.
Jesus! It's as if They act that I am an evil person for enjoying one of the best things this World has ever come up with.
Hats off to brewer's in Utah for showing this State what good beer is all about and also (slowly) changing these lunatic laws, Once and for All.

Stacey