A recent Salt Lake Tribune commentary by a Utah citizen focused on Utah’s liquor business and, specifically, the operations of the Department of Alcoholic Beverage Control (DABC). Although the article was an opinion piece, it contained some factual inaccuracies that merit addressing.
Nov. 1 was the day that grocery and convenience stores could sell beer containing up to 4% alcohol by weight. In October, many grocery and convenience stores allowed their shelves to run low to avoid being saddled with unsellable 3.2% beer. Utah state liquor stores, though, continued to carry many beers to meet the demand of customers. In fact, the sale of beer in October increased 4.7% in state liquor stores, resulting in strong profits.
By Nov. 1, only three pallets of beer (roughly 240 cases) remained unsold in the 47 Utah liquor stores, at a total cost to the DABC of $10,121. However, the increased sales at DABC during October 2019 generated $291,000 more than October 2018 sales. The profit was an extra $89,319 to the state.
This unsellable beer was not dumped at the state landfill, as claimed. Instead, it was delivered to recyclers, who separated the liquid from the glass, paper and metal. The liquid was converted to natural gas, and all other materials were recycled. Thus, beer that could not legally be resold was used to benefit the environment.
Utah’s population growth, combined with the efficient business practices of the DABC, has resulted in annual revenue increases for the state. Since 2015, sales have increased more than $100 million, which averages about 5% per year. Alcohol sales are projected to approach $500 million in 2020.
In 2019, more than $224 million from alcohol sales went to the state treasury, helping keep taxes low. Another $47.9 million went to the school lunch program, $2.5 million to Parents Empowered (Utah’s underage drinking prevention program) and $1.75 million for school underage drinking programs. Our 2019 annual report, which is available on the DABC website, provides additional detail.
While Utah’s tremendous population growth has generated increased revenue, it has also presented some challenges in meeting demand. However, in 2019, two new liquor stores opened in Syracuse and Herriman. In 2020 the DABC will open another two stores, in Farmington and Saratoga Springs. Plans for a new, larger and relocated downtown Salt Lake City store are underway. The Foothill store is finalizing plans for a remodel to increase the size from 4,200 square feet to over 12,000 square feet.
A new store in Taylorsville is in the planning phase, along with relocating the Redwood store in West Valley to an upgraded location. The DABC is currently seeking land possibilities in Sugarhouse, East Sandy, Park City, Utah County and Ogden.
Additionally, existing stores are modifying, as able, in order to minimize crowded aisles and longer lines. Products vary from store to store based on the demand, as demonstrated by sales trends. While some products are not available at all locations, Utah liquor stores currently carry over 5,600 different products, plus items available through the DABC Special Order Department.
Importantly, while the commentary focused heavily on financial issues, the DABC’s mission involves balancing many interests. The DABC’s mission is to reasonably satisfy the public demand, protect the public interest, prevent the consumption of alcohol by minors,reduce the harmful effects of over consumption by adults, and prevent impaired driving.
The DABC’s goal is to support that mission while striving to improve customer service and promote fiscal responsibility. The DABC’s Parent’s Empowered Program has made a marked impact in underage drinking, with Utah having the lowest percentage of underage drinking in the nation.
The U.S. Constitution grants states the right to control and regulate the sale and consumption of alcohol, and all 50 states do so with restrictions varying from state to state. One principle followed by Utah is not to compete with private enterprise by selling non-alcoholic items such as mixers, barware, lemons, limes, etc. Private businesses fill this niche, and sales tax from those items benefit the state and local communities at the same amount, while the individual business owners retain their profits.
The DABC is proud to have never operated at a loss, and is excited about the current and future programs to increase store availability and provide higher levels of customer service, while maintaining our commitment to our broader mission that includes preventing underage drinking and overconsumption.
John T. Nielsen
John T. Nielsen has had a long career in government and private law practice, serving as assistant city Attorney for Salt Lake City, Salt Lake City Police Department first legal advisor, deputy county attorney and chief deputy county attorney in charge of the Criminal Division and as Utah’s Commissioner of Public Safety. In that capacity, he was in charge of all the state’s law enforcement and public safety components. He currently serves as chair of the DABC Commission.