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Alcohol state question uncorks many issues for Oklahoma voters

It's always busy at Byron's Liquor Warehouse, but peak hours typically begin about 3 p.m. and don't stop at the bustling store until almost close.

Byron's, 2322 N Broadway Ave., was one of the first liquor stores to open in the state after prohibition ended in 1959 and remains a fixture of NW 23 and N Broadway, just a few blocks from the Oklahoma Capitol.

Blake Cody, general manager at Byron's, fears his customers will dwindle if State Question 792 passes in November, cutting into the liquor superstore's wine and beer sales.

SQ 792 would begin the biggest overhaul to Oklahoma's alcohol laws since the state went wet nearly 60 years ago. The measure would allow for wine and cold, full-strength beer sales in grocery and convenience stores, as well as change the state's alcohol distribution system.

A companion bill, Senate Bill 383, would rewrite many of the state's alcohol statutes, including raising minimum age of store cashiers to sell beer to 18, up from 16 at grocery and convenience stores.

While the ballot measure would allow liquor stores to sell things like some groceries, drink mixers and other items for the first time, as well as expand to two locations, it won't be enough to make up for the loss of wine and beer sales, Cody said.

"It's too little to compete. I don't think it will help most liquor stores,” he said. “Most of them are in not very large size locations and it's not enough to help them.”

Cody and other liquor store owners say they are not against reforming Oklahoma's liquor laws, but they believe the language of SQ 792 will make it harder to compete against large, chain convenience stores, many of them owned by out-of state companies.

“We are opposed to the way it is written,” Cody said.

State Sen. Stephanie Bice, R-Oklahoma City, said she didn't know what thorny issues she was uncorking when she proposed a bill in 2015 that would make it legal for liquor stores to sell refrigerated, full-strength beer.

Bice soon found herself in the center of a raging alcohol modernization debate that includes doing away with low-point beer and legalizing wine sales in grocery stores.

“Immediately, I was bombarded with phone calls and Facebook messages that said ‘this is great, but can you please put wine in grocery stores,'” Bice said. “I spent a year and a half researching existing laws, speaking with all of the stakeholders and what we have tried to put together is something Oklahomans could be excited about so we can modernize the laws.”

SQ 792 is the product of a legislative referendum on alcohol modernization approved by the Oklahoma Legislature that was sparked initially by Bice's cold beer sales bill.

Vowing to sue

Faced with a well-funded ballot measure legalizing wine sales in grocery stores that has strong public support, the Retail Liquor Association of Oklahoma says there's almost no doubt that it will sue if State Question 792 passes in November.

The liquor store owners group plans to challenge the constitutionality of the ballot measure if it passes, said Bryan Kerr, president of the Retail Liquor Association.

The group believes the measure is unconstitutional under the 14th Amendment, because it proposes two different sets of laws for liquor stores and grocery stores.

“They can't write something that is fair enough to overcome the hurdle of the 14th Amendment,” Kerr said. “It's not a surprise that they would craft something that is going to become unconstitutional.”

While SQ 792 would allow liquor stores up to 20 percent of sales in nonalcoholic products like corkscrews and mixers, grocery stores with a license to sell wine would have no restrictions on what they would be able to sell.

While liquor store owners would be limited to opening two stores under the measure, 792 proposes no limits on how many stores selling wine that grocers can operate.

Alex Weintz, spokesman for the Yes on 792 campaign, said he believes the ballot measure would withstand any legal challenge if voters approve it.

“792 is modeled on successful reforms that have taken place in other states,” he said. “I'm confident it will withstand a constitutional challenge. We are confident we will win the election, so that's where our focus is at this time.”

Measure backers

The Yes on 792 campaign has ample funding from Walmart and several other larger retailers. The Yes campaign already has spent more than half a million dollars on television advertising.

Political advertising disclosure forms filed at Oklahoma television stations show Yes on 792 has spent $468,129 on television spots in the Oklahoma City market leading up to Election Day, as well as an additional $112,435 for television ads in the Tulsa market.

Weintz said the organization's internal polling shows strong support for the ballot measure, but it still wants to get the word out any way it can.

Liquor store owners expect the Yes campaign to outspend them by many multiples, Kerr said.

“There's no question it's a David and Goliath issue. They've got a lot of money to spend,” Kerr said. “We've got a lot of small business people who can barely pay their bills or feed their family. They can barely afford to buy one radio commercial in their hometown. The money hides the true intent of 792. If they really had a good bill and a good message, they would not have to spend so much trying to sell it.”

Campaign contribution reports filed with the Oklahoma Ethics Commission in July show the political action committee Yes on 792 Inc. had raised $100,000 in cash to promote the ballot measure by the end of June, as well as tens of thousands of dollars of in-kind contributions.

Reports that will show contributions up to Sept. 30 aren't due until the end of October.

The group Oklahomans for Consumer Freedom, backed by Walmart and several other larger retail chains including Tulsa-based QuikTrip Corp., was the largest donor, contributing $59,589 in cash to promote the state question.

Oklahoma City-based 7-Eleven Stores contributed $25,000 cash to promote the state question.

The conservative Foundation for Economic Prosperity Inc. also donated $20,000 to Yes on 792.

Oklahomans for Consumer Freedom made $78,972 in in-kind contributions to the campaign, which includes personnel and market research.

Walmart also has made $45,125 in in-kind contributions to the Yes on 792 campaign, mostly in employee time, documents show.

End of 3.2 beer?

SQ 792 also proposes changes to the state's liquor distribution system, and could possibly mean the end of low-point beer.

Oklahoma accounts for 50 percent of 3.2 beer sold in the nation, and it may no longer make economic sense for brewers to keep making it if Oklahoma legalizes full-strength beer sales in grocery and convenience stores.

Oklahoma is one of just five states that sell 3.2 beer because of alcohol laws. However, Oklahoma is the largest consumer of low-point beer because of how beer sales are structured in the state, said Lisette Barnes, president of the Oklahoma Beer Alliance.

“I can see that some manufactures will choose not to brew 3.2 beer anymore if this market isn't there for them anymore,” Barnes said.

The Oklahoma Beer Alliance, backed by the beer distributor Anheuser-Busch Sales Of Oklahoma, moved to lend its support to SQ 792 after a rewrite of the measure that will allow Anheuser-Bush to keep its distributorship business in the state. An early draft of the measure would have banned common ownership between alcohol manufacturing, wholesale and retail operations in the state.

Barnes said allowing for cold full-strength beer will mean more product selection for consumers at the stores. Some brewers have refused to distribute their products in Oklahoma, because refrigeration of full-strength beer is banned.

“Even Anheuser-Bush brings in only a portion of their portfolio to Oklahoma right now,” Barnes said. “So many brewers don't bring their product into Oklahoma right now, because they can deteriorate. It's a matter of quality for them.”

The measure would also change Oklahoma's liquor distribution system to allow for alcohol manufactures to choose to distribute their product through just one distributor.

Current state law requires that liquor distributors be allowed the same rights to distribute all products.

Differing viewpoints

While the Yes on 792 campaign argues that the measure will benefit consumers by increasing customer selection, liquor store owners and distributors say the opposite is true.

Current state distributor laws keep liquor prices down in the state, because markups to products are posted with the Oklahoma ABLE Commission, making prices fair, Cody said.

“With the current system, everyone can post prices and meet each other,” Cody said. “Manufacturers and wholesalers are going to set prices however they want now.”

While Oklahoma spirit markups average about 10 percent in Oklahoma, the markup in other states is closer to 25 percent, Cody said.

Allowing the state to go to a franchise distribution system will also make it harder for smaller craft beers and wines to get distributed, meaning less selection for the consumer, Cody said.

“Consumers will have to pay more for product, and the products will be limited,” he said.

Weintz said the changes to Oklahoma's alcohol distribution system will make Oklahoma's laws more modern and competitive.

“It would streamline the liquor distribution system and make it the same way Coca-Cola and Doritos are distributed,” Weintz said. “It's easier for the brands and helps drive down prices and increase selection.”

Kerr said he would like Oklahomans to vote No on 792 and wait for reforms down the road that could be more friendly to local businesses.

“If I'm being fair, SQ 792 offers the convenience that many voters want, but there's a lot of hidden costs in there too,” Kerr said. “It allows stronger alcohol to be sold at thousands of new outlets and the cost of that economically is that we will lose hundreds of local businesses and local jobs.”

Contributing: Staff Writer Nolan Clay

About the measure

State Question 792 would amend the state constitution regarding the sale of wine and full-strength beer. The measure would allow for refrigerated wine and beer to be sold in all stores. SQ 792 also would allow Oklahoma liquor stores to open two locations. 

How it got on the ballot: SQ 792 is a legislative referendum the Oklahoma Legislature passed in the 2016 legislative session. Grocery store chains, including Walmart, advocated for the measure, as well as several convenience store chains and beer distributors.

Argument in favor: Supporters of the measure claim it would help modernize Oklahoma’s outdated liquor laws, promote economic growth and give Oklahomans the same access to wine and beer that many other states already have.

Argument against: Opponents of the measure claim it would put many locally owned, independent liquor stores out of business, rendering them unable to compete with large grocery and convenience stores. Opponents also claim the measure could raise alcohol prices for consumers and give minors easier access to alcohol.

Related Photos
<p>Blake Cody is the manager of Byron's Liquor Warehouse in Oklahoma City. [Photo by Jim Beckel, The Oklahoman]</p>

Blake Cody is the manager of Byron's Liquor Warehouse in Oklahoma City. [Photo by Jim Beckel, The Oklahoman]

<figure><img src="//cdn2.newsok.biz/cache/r960-41e11dff36bc05defe65033d21122764.jpg" alt="Photo - Blake Cody is the manager of Byron's Liquor Warehouse in Oklahoma City. [Photo by Jim Beckel, The Oklahoman] " title=" Blake Cody is the manager of Byron's Liquor Warehouse in Oklahoma City. [Photo by Jim Beckel, The Oklahoman] "><figcaption> Blake Cody is the manager of Byron's Liquor Warehouse in Oklahoma City. [Photo by Jim Beckel, The Oklahoman] </figcaption></figure><figure><img src="//cdn2.newsok.biz/cache/r960-41e11dff36bc05defe65033d21122764.jpg" alt="Photo - Blake Cody is the manager of Byron's Liquor Warehouse in Oklahoma City. [Photo by Jim Beckel, The Oklahoman] " title=" Blake Cody is the manager of Byron's Liquor Warehouse in Oklahoma City. [Photo by Jim Beckel, The Oklahoman] "><figcaption> Blake Cody is the manager of Byron's Liquor Warehouse in Oklahoma City. [Photo by Jim Beckel, The Oklahoman] </figcaption></figure><figure><img src="//cdn2.newsok.biz/cache/r960-36af80382d90770421bf3b7932475b44.jpg" alt="Photo - Shelves of liquor are shown at Byron's Liquor Warehouse, inside the business on Wednesday, Oct. 12, 2016. [Photo by Jim Beckel, The Oklahoman] " title=" Shelves of liquor are shown at Byron's Liquor Warehouse, inside the business on Wednesday, Oct. 12, 2016. [Photo by Jim Beckel, The Oklahoman] "><figcaption> Shelves of liquor are shown at Byron's Liquor Warehouse, inside the business on Wednesday, Oct. 12, 2016. [Photo by Jim Beckel, The Oklahoman] </figcaption></figure><figure><img src="//cdn2.newsok.biz/cache/r960-4f88477ff1885cc24bda60127794f659.jpg" alt="Photo - A selection of wine is shown at Byron's Liquor Warehouse, Wednesday, Oct. 12, 2016. Liquor store owners fear sales will decline if grocers are allowed to sell wine in the state. [Photo by Jim Beckel, The Oklahoman] " title=" A selection of wine is shown at Byron's Liquor Warehouse, Wednesday, Oct. 12, 2016. Liquor store owners fear sales will decline if grocers are allowed to sell wine in the state. [Photo by Jim Beckel, The Oklahoman] "><figcaption> A selection of wine is shown at Byron's Liquor Warehouse, Wednesday, Oct. 12, 2016. Liquor store owners fear sales will decline if grocers are allowed to sell wine in the state. [Photo by Jim Beckel, The Oklahoman] </figcaption></figure><figure><img src="//cdn2.newsok.biz/cache/r960-a6954928c4c6363d637d0174b53e26f5.jpg" alt="Photo - Rows of wine are on display at Byron's Liquor Warehouse on Wednesday, Oct. 12, 2016. [Photo by Jim Beckel, The Oklahoman] " title=" Rows of wine are on display at Byron's Liquor Warehouse on Wednesday, Oct. 12, 2016. [Photo by Jim Beckel, The Oklahoman] "><figcaption> Rows of wine are on display at Byron's Liquor Warehouse on Wednesday, Oct. 12, 2016. [Photo by Jim Beckel, The Oklahoman] </figcaption></figure><figure><img src="//cdn2.newsok.biz/cache/r960-01890121ed00802f866136534fc643a7.jpg" alt="Photo - Shelves of wine are shown at Byron's Liquor Warehouse, on Wednesday, Oct. 12, 2016. State Question 792 would allow for wine sales at grocery stores. [Photo by Jim Beckel, The Oklahoman] " title=" Shelves of wine are shown at Byron's Liquor Warehouse, on Wednesday, Oct. 12, 2016. State Question 792 would allow for wine sales at grocery stores. [Photo by Jim Beckel, The Oklahoman] "><figcaption> Shelves of wine are shown at Byron's Liquor Warehouse, on Wednesday, Oct. 12, 2016. State Question 792 would allow for wine sales at grocery stores. [Photo by Jim Beckel, The Oklahoman] </figcaption></figure>
Brianna Bailey

Brianna Bailey joined The Oklahoman in January 2013 as a business writer. During her time at The Oklahoman, she has walked across Oklahoma City twice, once north-to-south down Western Avenue, and once east-to-west, tracing the old U.S. Route 66.... Read more ›

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