Competing Questions: Oklahoma’s 2 Alcohol Proposals Backed By Very Different Interest Groups

Jul 31, 2016

Supporters of a state question to update Oklahoma’s alcohol laws and allow wine and strong beer in grocery and convenience stores rolled out their campaign this week.

But it’s not universally liked. Oklahoma’s alcohol laws haven’t changed much in the past 60 years, and small, package liquor stores stand to lose out, Retail Liquor Association of Oklahoma president Bryan Kerr told The Journal Record’s Dale Denwalt:

Kerr pointed to Texas, which already allows sales of alcohol in grocery and convenience stores. There, he said, the liquor store survival rate is one per every 11,000 residents. In Oklahoma, it’s now one liquor store for every 5,800 people.

“We know what happens when you put wine and strong beer in grocery and convenience stores. You only have to look south of the Red River to see that model,” said Kerr. “Unless he means it’s OK that 300 locally owned mom-and-pop businesses die as a result of their inability to attract foot traffic due to a slanted marketplace.”

Kerr’s organization will start collecting signatures on their own state question in August. Along with restricting some wine sales, Kerr said his measure would keep the distribution network in place instead of letting big distributors control the wholesale market that retailers tap into.

The liquor stores will try to get their petition on the November ballot, but Kerr said it’s going to be a Herculean effort because he has just a few weeks to get enough signatures.

Both state questions would expand cold and strong beer sales to non-liquor stores, but 791 restricts profitable wine sales if the grocer is less than 500 feet from an existing liquor store.

Another key difference is how distribution is handled. Kerr said 792 lets out-of-state distributors set up a de facto monopoly over wholesalers, who then sell to the retailers. If the distributors buy a controlling interest in an Oklahoma wholesaler, the wholesaler can then decide to be the sole source of alcohol brands offered from that distributor. In Oklahoma’s alcohol market now, the state’s seven wholesalers can buy from both distributors and compete with each other on prices, delivery and service levels.

“So instead of me being able to buy Jack Daniel’s from seven different guys who compete on price, selection and service at the wholesale level, I get to buy from one guy who has to compete against nobody,” Kerr said.

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