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The Battle Over Who Should Be Allowed To Sell Cold Beer

A group of convenience store owners is suing Indiana, saying its alcohol laws provide liquor stores an unfair advantage.

Miller Beer

Photo: Gretchen Frazee

Under current state law, grocery stores are allowed to sell cold wine but not cold beer.

Alcohol laws across the country are a hodgepodge of regulations- many of which date back to the 1930s.

The 21st Amendment ended prohibition and left states with nearly exclusive power to decide how to regulate alcohol within their geographic boundaries.

In Indiana, nearly all carryout sales of alcohol are prohibited on Sundays and the liquor stores hold the exclusive right to sell cold beer.

Now, the battle to loosen some of those regulations is playing out in court after a group of convenience stores filed suit against the state for the right to sell cold beer.

“Where’s The Refrigerated Section?”

Tassie Gnaidy has lived in Bloomington Indiana for two and a half years. She’s lived all over the U.S.—New Mexico, Vermont and California and was surprised to learn when she moved here she couldn’t go to the grocery store or stop in a gas station and pick up a cold beer.

“I walked into the grocery store and the fact there was alcohol in the grocery store I was like, ‘OK,’ but then I was like, ‘where is the refrigerated section?’ And it just wasn’t there,” she says. “I think I went to a Kroger that had the chiller for the wine and I was like, ‘so I can chill a bottle of wine, but what if I put a bottle of beer in there?’”

It was another Hoosier who ignited the current battle. A man from Richmond, Ind., bought a chilled 12-pack of Bud Light from a liquor store for $13.36.

He bought the same warm 12-pack from a Richmond convenience store for almost three dollars less. He then crossed over the border and bought the same 12-pack cold for $11.76.

“One of the things Indiana consumers will realize when they go to buy cold beer in a liquor store – the very first thing the clerk does is touch the package because if the package is cold,” says Scot Imus, the Executive Director of the Indiana Petroleum Marketers and Convenience Store Association. “You get charged a higher price than if you would have picked up a case that was on the floor. They charge you more for the privilege of buying it cold.”

According to Imus, Indiana is the only state in the country that regulates beer sales based on temperature.

Protecting Minors Or Liquor Stores?

“No state has a public policy goal of making alcohol readily available,” says Patrick Tamm, the president of the Indiana Association of Beverage Retailers. “There are consequences for when a controlled product is missold or misused unfortunately.”

Tamm says the state has the constitutional right under the 21st Amendment to determine how alcohol is sold and who sells it.

“We believe Indiana has found a good balance for that,” Tamm says. “Other states have done various other matters as well. However we believe Indiana has created a policy that has worked well for its public.”

Tamm says the legislature – not the courtroom – is the place to set public policy. For years, the Convenience Store Association tried that avenue, but none of the proposals ever gained any traction in the legislature. They say it’s because the liquor lobbyists like Tamm have such a strong hold over the legislature.

The group’s suit contends the restrictions that prohibit gas stations, grocery stores and pharmacies from selling cold beer are discriminatory and grant unequal protection to one group – the liquor store industry.

“You tend to hear more about individual cases that might be based on race, sex or religion,” says John Maley, the plaintiffs’ attorney. “But the courts have long recognized and long held that businesses are also protected by the Equal Protection Clause in the U.S. Constitution which makes sense so that companies, as federal or state governments pass laws or ordinances, they are entitled to equal treatment. Government can’t pick winners or losers.”

Maley, who has represented WFIU/WTIU, in an unrelated matter, says the recent ruling in Evansville’s smoking ban case adds strength to his case.

“[The city of Evansville] said restaurants and bars, you can’t smoke there, but you can smoke in a casino,” Maley explains. “The Indiana Supreme Court said that violates the equal privileges – businesses are entitled to be treated equally.”

But Indiana University McKinney School of Law Professor David Orentlicher says it’s going to be difficult for the plaintiffs to use the equal protection argument in court.

“The Supreme Court has said it’s okay to draw distinctions and treat some people differently than others.  It’s ok to treat grocery stores different than convenience stores and different from gas stations and liquor stores,” Orentlicher says. “You can treat them differently as long as it’s not irrational.”

The Attorney General’s office is defending the state in the lawsuit.  Attorney General spokesman Bryan Corbin said with the motion before the court, he could not comment beyond the brief the state had already filed in the case.

That filing echoes Orentlicher’s explanation.

“[The] Plaintiffs admitted that convenience stores (in terms of the business operations) are not the same as package liquor stores. Convenience stores offer one-stop shopping for various basic items such as gas, groceries, candy, soda, bread, milk, eggs, and meat. Package liquor stores, on the other hand, do not. Many Indiana convenience stores are open 24/7. Package liquor stores, on the other hand, are not,” it reads.

In addition, liquor stores are heavily regulated. There are rules about who can enter, where stores can be located and employees have to have special permits to sell alcohol.

That’s why Patrick Tamm says they should continue to have the exclusive right to sell cold beer.

“We believe alcohol is very much different than peanut butter. Our gas station friends would very much like to sell it like peanut butter,” Tamm says. “We believe alcohol is sold in a regulated environment because there are consequences when you misuse or inappropriately sell alcohol.”

But one of the things the plaintiff repeatedly brought up in court was liquor stores have far worse records when it comes to selling to minors than drug, grocery and convenience stores.

The excise police have a program called the Substance Abuse Awareness Council (SAAC).  They test permit holders to see if they sell to minors.

The program has been in existence for four years and in each of those four years convenience stores have fared much better than liquor stores.

A previously posted version of this story incorrectly identified the defendant as saying liquor stores have far worse records when it comes to selling to minors.

Sara Wittmeyer

Sara Wittmeyer is the News Bureau Chief for WFIU and WTIU. Sara has more than a decade of experience as a news reporter and previously served with KBIA at the University of Missouri, WNKU at Northern Kentucky University in Highland Heights, KY, and at WCPO News in Cincinnati.

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