Hundreds of Utah stores are running out of time to get new state license if they want to keep selling beer or dodge a fine

With a March 1 deadline looming, more than 1,000 grocery and convenience stores that sell beer in Utah have not applied for the liquor license now required under state law.

If they fail to do so, these merchants — mainly mom-and-pop businesses in small rural communities — could end up unable to sell beer to their customers.

The Utah Legislature is ready to approve a stopgap measure, HB202, which would extend the deadline to May 31 and keep beer on the shelves. But it would impose a fine of up to $300 for those who take advantage of the grace period.

“This provides a soft landing for folks,” said Rep. Timothy Hawkes, R-Centerville, the bill sponsor.

On Tuesday, the Senate Business and Labor Committee advanced HB202, which already cleared the House, 73-0.

Under a new state law, which took effect July 1, 2018, grocery and convenience stores that want to sell beer — 3.2 percent alcohol by weight — must obtain an “off-premises” license from the Utah Department of Alcoholic Beverage Control. Previously, merchants only had to get approval from cities or counties.

The requirement was one of many changes approved in 2017 as part of a massive overhaul of the state’s liquor laws. That law got a lot of attention because it loosened the state’s barrier — aka Zion Curtain — requirement for restaurants. It also boosted the state’s markup on booze.

But buried within its 144 pages was language that tightened the restrictions for beer displays in grocery and convenience stores. Lawmakers wanted to curb excessive in-store advertising and consumer confusion over nonalcoholic beverages and flavored beers and ciders, which often have similar labeling.

The off-premises license also would make it easier for the state to regulate stores if the state passes SB132. That bill, sponsored by Sen. Jerry Stevenson, R-Layton — and opposed by The Church of Jesus Christ of Latter-day Saints — would raise the alcohol limit of grocery store beer from 3.2 percent alcohol by weight to 4.8 percent.

The DABC estimated that 2,500 businesses across the state would need to apply for an off-premises beer license. But, as of February, only about 1,000 applications have been received, Executive Director Sal Petilos told the committee Tuesday. “More than half have not signed up.”

Under HB202 owners who submit an application after March 1 but before April 15, would be fined $150. Those who sign up between April 15 and May 31 would be charged $300.

Sen. Curtis Bramble, R-Provo, was initially opposed to the fines, especially if “the changes have not been understood" by business owners.

Hawkes said the DABC “has been working hard to get people to sign up." It also was important to have penalties, he added, because “it is not fair to those who have complied” with the March 1 deadline.

Dave Davis, president of the Utah Retail Merchants Association, which represents stores, said the group supports the bill and the late penalties "because the alternative was retailers unable to sell beer.”

To get the license — named because the beer that is sold is consumed off-site — the retailers must submit an application and a $325 fee to the DABC. A floor plan highlighting all beer displays and beer storage areas must be included. Store managers and supervisors also must complete mandatory training from the agency.

For small and midsize businesses, like Griffith Foodtown in Coalville, the license process is onerous and expensive; and managers have found it difficult to drive to the DABC offices in Salt Lake City to take the training.

“We wanted to get our license as quick as possible because we knew there would be a giant influx of applications," said store manager Chris Griffith, whose parents own the store. “But every single one of our managers has to take the training class, which is only held on certain days."

Several of the managers "don’t have time to go to Salt Lake or they don’t have child care,” he said. “It’s been a really big pain for us.”

The DABC — which says it is trying to develop online classes to solve the problem — charges $25 per person for the training.

“The whole thing is silly,” Griffith added. “It’s just Utah overmanaging something that could be handled at a county level.”