Utah breweries opposed to bill to allow full-strength beer in grocery stores
February 16, 2019
While breweries in Utah have often grumbled about restrictive alcohol laws, one regulation has allowed them to thrive in a unique niche. Now that the restriction might be partially lifted, breweries are worried increased competition could drastically impact their sales.
In the Utah Legislature, S.B. 132 would permit full-strength beer to be sold in Utah's grocery and convenience stores. Utah breweries argue the change — increasing the limit from 3.2 percent alcohol content by weight to 4.8 percent — would provide outsized benefits to larger, national breweries. Yet the change could be a boon for consumers who prefer a wider selection.
The bill is sponsored by Sen. Jerry Stevenson, R-Layton. It received a favorable recommendation from the Senate Business and Labor Committee on Feb. 7.
The bill comes after states like Oklahoma and Colorado passed similar laws allowing stronger beers to be sold in grocery and convenience stores. In a couple months, Utah will be one of two states that draws the line at 3.2 percent. Two years ago, national brands announced they would start cutting 3.2 percent beer products because the customer base is relatively small, and that trend is expected to continue.
Where big brands pulled out, local breweries stepped up. Nicole Dicou, executive director of the trade organization Utah Brewer's Guild, said the number of breweries in Utah has almost doubled in 10 years.
The guild represents all 28 of the state's craft breweries, and she said the vast majority are opposed to the bill.
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"It's giving favor to mega retailers and mega breweries, limiting shelf space and hindering progress in the craft beer industry in Utah," she said.
She said most Utah breweries have designed their products around current laws. They all have beers with an alcohol content of 3.2 percent by weight, or 4 percent by volume, but national brewers have higher-strength beers because they can be sold in most states.
"Going up to 4.8 percent, it's like, 'Well we'll still be limited and now all these other, Coors, Busch beers will flood in with that exact percent,'" Dicou said. "It would definitely throw a wrench in things and make people scramble and try to keep up."
Hud Knight, co-founder and marketing and sales manager of Park City Brewery, said the change would allow the brewery to put only one additional beer from its current lineup on grocery shelves. National breweries and regional craft breweries would have several products to add.
He said he either wants to see the limit raised to an even higher alcohol percentage — allowing the brewery to sell its beers with alcohol contents greater than 4.8 percent by weight in grocery stores — or for the law to remain as is.
"There is limited real estate shelf space in grocery stores as well as convenient stores," he said.
He said national companies with more financial power will likely kick out small breweries. The breweries could roll out beer with alcohol levels between 3.2 and 4.8 percent, but it would take time to perfect new recipes and packaging.
Knight, like other brewery owners, said he worries that, if the bill is signed into law, lawmakers will not consider raising the limit for at least another decade. Dicou said most of the breweries in the state have comparable opinions.
"This number is still the tiniest baby step, and we're not going to just take a baby step because it's a baby step. We want actual progress for the crafters," she said.
Some breweries in Utah do think the increase is a win because it moves the needle in the right direction, Dicou said. Greg Schirf, founder of Wasatch Brewery, said he is indifferent toward the bill. He admits the proposed change would benefit bigger breweries over small ones like his, and that it would increase competition for a spot on the shelves. But he also said there would be more products available, which benefits the consumer.
He wants to make sure lawmakers listen to Utah business owners and their constituents when making decisions rather than being influenced by large organizations.
Bill Malone, president and CEO of the Park City Chamber/Bureau, previously said he also sees both sides of the coin. For small breweries, the change may not be beneficial. But if it were to pass, tourists would have a wider selection of beers to choose from at the store.
He said it is a balancing act.
Dicou said the bill would be more accepted if lawmakers delayed the implementation of the change so local breweries could have time to prepare. The bill currently states the law would be put into effect on July 1. Utah breweries will adapt if they have to, just as they have done for years.
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