Bill allowing higher alcohol beer in Utah grocery stores wins initial Senate approval

(Trent Nelson | The Salt Lake Tribune) 3.2 beer on the shelves at Smith's Grocery in Salt Lake City, Friday, Jan. 26, 2018.

A bill to put higher-alcohol beer in Utah grocery and convenience stores was approved by the Senate on Monday — despite worries about underage drinking, the loss of liquor revenue and the potential that the measure is just one step away from allowing wine in retail outlets.

SB132, which would hike the alcohol limit on retail beer from its current 3.2 percent by weight to 4.8 percent, passed 21-8 on a second reading. After a third reading in the Senate, possibly Tuesday, it will go to the House for consideration.

If the bill is approved and signed into law, Utah’s alcohol limit for grocery store beer still would rank among the nation’s strictest, said the measure’s sponsor, Sen. Jerry Stevenson, R- Layton.

Utah’s predominant faith, The Church of Jesus Christ of Latter-day Saints, came out against the proposal, but Stevenson said the measure is about commerce, not alcohol. If Utah were to keep the 3.2 beer status quo, he warned, "it would have a tremendous effect on small stores in outlying areas,” where beer products make up a significant part of sales.

Under current state law, only beer that is 3.2. percent by weight (or 4 percent by volume) can be sold in grocery and convenience stores. Stronger beer is sold in liquor stores, which are operated by the Utah Department of Alcoholic Beverage Control.

In recent months, alcohol shifts in other states have caused Utah’s 3.2 beer selection to evaporate. New laws took effect in Oklahoma and Colorado that allowed higher-alcohol beer to be sold in grocery stores. Kansas is not far behind; it will allow full-strength beer in stores April 1.

Large companies, such as Anheuser-Busch and MillerCoors, have said that it’s not worth brewing lighter beer for such a small market.

Small-business owners, Utah grocery and convenience stores, beer distributors and some brewers have been pushing to boost the alcohol limit so consumer selection is maintained.

SB132 would increase the limit from 3.2 percent by weight to 4.8 percent — or from 4 percent by volume to 6 percent, a more common industry standard.

Stevenson said that about half the beer that is now sold in liquor stores would move to grocery and convenience stores under the plan.

While the move could slow the growth of DABC revenue by about $23 million, he said, the state’s general fund, school lunch and public safety programs would not see any negative effects because Utah liquor sales have been rising about 7 percent annually. Last year, the DABC brought in more than $450 million.

There’s another added benefit to the DABC and its customers. Transferring beer to retail stores “leaves space on the shelves” for other products, Stevenson said. “There’s a list of other products that could replace this [beer] as it moves out.”

Sen. Don Ipson, R-St. George, voted in favor of SB132, calling it "a business bill” during the morning debate.

“The state of Utah is a business-friendly state,” he said. “Let’s not tie the hands of business.”

However, Sen. Lyle Hillyard, R-Logan, who voted against the measure, said the change would increase alcohol levels consumed by minors.

“I don’t care what other states are doing,” he said. “They’ll be drinking beer at a higher level than they thought. It’s just inviting problems to the state.”

Hillyard also said stronger beer would open the door to even more alcohol in retail stores. “The next step will be to putting wine in the grocery stores,” he said. “Mark my words, it’s going to happen.”

During a media availability after the Senate vote, Stevenson was asked about Hillyard’s complaints.

Stevenson said he does not intend to expand the availability of wines and other liquors. And while the state can’t control bad behavior, he pointed to Utah’s low rates of binge drinking and drunken driving as evidence that careful regulation is having a positive effect.

“We’re doing a better job than a lot of places,” Stevenson said, “but I don’t know how you get to perfect.”

Sen. Gene Davis of Salt Lake City was the only Democratic senator to oppose SB132. He said constituents in the local brewing industry had encouraged his opposition.

“I’ve got four small breweries in my district,” he said. “They called me and they asked for my ‘no’ vote.”

The Utah Brewers Guild opposes the legislation, saying that raising the maximum alcohol content to 4.8 percent doesn’t go far enough. The group would want to lift the limit to be in the 8 percent to 9 percent range, putting it in line with national standards.

Sen. Todd Weiler, R-Woods Cross, also voted against the bill. He questioned the July 1, 2019, effective date and wondered if a phase-in of 12 or 18 months, like other states had done, would be more prudent.

Small brewers, he said, could lose thousands of dollars in already-purchased labeling and packaging “because they didn’t know it would change so quickly.”

Reporter Ben Wood contributed to this story.