Gehrke: 2020 could see a push to let voters decide on sale of full-strength beer and wine in groceries

(Trent Nelson | The Salt Lake Tribune) 3.2 beer on the shelves at Smith's Grocery in Salt Lake City, Friday, Jan. 26, 2018. The selection of 3.2 percent beer in Utah grocery and convenience stores is expected to decline — as much as 40 percent — later this year. The beer industry wants the Utah Legislature to change state law to allow beer that is 4.8 percent alcohol in stores. According to a new Salt Lake Tribune poll, Utah residents are split on the issue, with the majority of Republicans and active Mormons opposing the idea.

Among those closely watching the fate of four initiatives seeking voter approval this year is a group of retailers who may try to bring full-strength beer and even possibly wine sales to grocery stories through a 2020 ballot measure.

Discussions have been going on behind the scenes about a possible initiative effort patterned after a successful ballot measure in Oklahoma in 2016 that gave the green light to wine and full-strength beer sales, according to several sources involved in the meetings, who spoke anonymously because efforts are still in the planning stages.

Francisco Kjolseth | The Salt Lake Tribune The Salt Lake Tribune staff portraits. Robert Gehrke.

The win in Oklahoma — as well as changes to laws in Colorado and Kansas — left Utah practically an island, one of just two states (Minnesota is the other) that limit beer sold in grocery stores to 3.2 percent. Major breweries have said, with the demand for low-strength beer drying up, they plan to drastically scale back the options that will be available in Utah.

Anheuser-Busch, the maker of the Budweiser line, said late last year it could drop the brands it would make available in Utah by 40 percent, and similar reductions were expected from other major breweries.

State liquor stores could pick up some of the slack, but not much. The director of the Department of Alcoholic Beverage Control said last year that it couldn’t handle all of the heavy beer and it would squeeze out other products.

Raising the allowable alcohol level to 4.8 percent would mean most of the beer options would be able to stay in stores, but the Utah Legislature balked at changing the law. Instead, legislators want to wait and see if the reduction in options proves to be a problem for retailers or consumers, or if there is a spike in traffic at the state-run liquor stores from customers buying full-strength beer.

The retailers, however, may not wait, and they view the Utah initiatives this year as an indicator of whether they want to put their own measure on the ballot in 2020.

In particular, they are tracking the medical marijuana initiative and how aggressively and effectively The Church of Jesus Christ of Latter-day Saints opposes that measure, knowing it is likely that the state’s predominant faith would oppose their effort as well.

So far, church leaders have issued a statement expressing concerns about the marijuana initiative. The question is whether the LDS Church will take more direct, forceful action.

If the retailers do run an initiative, it would surely cost millions of dollars, and with that kind of money on the line, it’s likely they’ll go all the way and include wine sales in the proposed measure, unless polling shows it’s a deal-breaker, one source told me.

That’s what has happened in Oklahoma, where retailers pumped several million dollars into backing the referendum that was put on the ballot by the state Legislature. Walmart led the way, spending nearly $5 million, on the campaign that voters approved by a 2-to-1 margin.

Earlier this year, Walmart hired prominent lobbyist Spencer Stokes to represent the chain in Utah — a noteworthy move because Stokes also is co-owner of Gather, a signature-gathering company that has done work on initiative drives, as well as for candidates.

Oklahoma is not the only state that proponents could look to for inspiration.

In 2011, voters in Washington state approved a ballot initiative that privatized the state’s to-that-point state-owned liquor stores. The main proponent of that measure was Costco, which badly wanted to be able to sell liquor in its big-box stores.

How badly? The company pumped more than $20 million into the effort, almost single-handedly funding the initiative, which was approved by voters, 59 percent to 41 percent.

One study found that, in the years following privatization, Washington saw an increase in the number of liquor outlets and an increase in prices.

In the first five years since privatization, the volume of liquor sales went up by about 22 percent, just slightly behind the rate of growth (23.6 percent) in Utah’s government-run stores.

All of this initiative talk is in the preliminary stages. And it’s not clear the public would support the change in the voting booth.

A poll by The Salt Lake Tribune and the University of Utah’s Hinckley Institute of Politics earlier this year showed voters were pretty evenly split on full-strength beer sales in grocery stores. The poll found 49 percent supported the idea while 45 percent opposed it.

But it’s pretty clear — unless you’re a teetotaling Utah legislator — that something needs to be done. And, as with all of the initiative drives this year, if lawmakers won’t act, then voters might again have to take the matter to the voting booth, with the ballot in one hand and a beer in the other.