Chris Sikich

chris.sikich@indystar.com

Want to buy a cold beer in Indiana? Better not head to a pharmacy, grocery or convenience store.

How about a carry-out bottle of wine or a six-pack of beer on a Sunday? Stay away from grocery stores, liquor stores, convenience stores, bars and restaurants.

After a federal judge last week upheld the limits on cold beer sales, the restrictions aren't likely to be repealed anytime soon.

In repeated David vs. Goliath victories at the Statehouse, the small-but-mighty package liquor store lobby for years has been able to stymie efforts by the larger grocery store and convenience store lobbies to repeal the decades-old laws.

Why? Political watchers say package liquor stores are winning because they are owned by Hoosiers who believe they are in a fight for survival. So they focus their efforts at the Statehouse with laser-like precision to preserve their near-monopoly on carry-out cold beer sales and stop efforts that would make them go to the expense of staffing their stores on Sundays.

Grocery, pharmacy and convenience store chains — mostly based out of state — spend plenty of time and money lobbying, but they have to spread their attention among dozens of issues every year.

Considering those circumstances, political observers say, it's unlikely the legislature will change laws in a way that could very well hurt locally-owned package liquor stores.

David Orentlicher, a law professor at Indiana University-Purdue University at Indianapolis and former Democrat state lawmaker, said no one is making a compelling argument that changing the alcohol laws will grow the economy. They're being asked to pick winners and losers — so maintaining the status quo becomes the easiest path for lawmakers.

"If you can make a case about growing the pie, then it's easier to satisfy everyone," he said. "But if you are dividing up the existing pie, then it's hard to gain a strong consensus for that change."

What could break the standoff? Either a strong outcry from consumers or a change of thinking in the legislature.

"Eventually, I think more and more free-market thinking legislators will come into the General Assembly," said Scot Imus, president of the Indiana Petroleum Marketers and Convenience Store Association. "And I think consumers will start to demand it."

One thing is sure. Bills will be filed in 2015, as they have been the past seven years, to overturn both laws.

Alcohol wars

Restrictions on alcohol sales began as "blue laws" after Prohibition ended, passed by Indiana in 1935 and aimed at promoting religious standards. Now the discussion has shifted more toward economics and public policy.

Over the past 80 years, lobbyists have persuaded lawmakers to slowly erode the laws.

Package liquor stores, created in 1953, once controlled the market. Now, they compete with groceries, pharmacies and convenience stores on some levels.

The two sides have been fighting over alcohol regulations for decades. In 2007, the package liquor stores nearly pushed through legislation the grocery stores believed would have seriously shifted the balance.

And so in 2008, the grocery stores, pharmacies and convenience stores went on the offensive — creating the first serious push to repeal the restrictions on cold beer sales and Sunday sales.

"Those of us who lobbied for the drug, grocery and convenience stores got together and said 'enough is enough,' " recalls Grant Monahan, president of the Indiana Retail Council, which lobbies for grocery stores. "We're going to go on the offense."

Now, it's become an annual — and bitter — battle.

There are two sides to the argument:

• Proponents of change say it's a matter of convenience. Sunday is the second biggest shopping day of the week and many Hoosiers have wine, beer and spirits on their shopping lists. And if Hoosiers want cold beer, they should be able to find it anywhere that now sells unrefrigerated beer, not just at liquor stores.

• Opponents to the change say alcohol is readily available now. Allowing the grocers, pharmacies and convenience stores to broaden their sales will only put the smaller package liquor stores out of business. And, they say, it also will lead to easier access for minors and more opportunities for drunken driving.

So far, the push for change has gained little support in the Indiana General Assembly. A legislative committee studied the issue during the summer of 2010 but recommended against broader Sunday and cold beer sales.

The Senate never has held a hearing on the issues during a legislative session. The House held a committee hearing on Sunday sales in 2013, but the issue never came to a vote.

Package liquor store power

Patrick Tamm, the president of the Indiana Association of Beverage Retailers, chuckles when he hears people describe his group as "powerful."

After all, he's facing the much larger grocery, pharmacy and convenience store lobbies on alcohol issues.

Still, his side consistently wins.

He believes package liquor stores have been so successful in preventing broader Sunday and cold beer sales because they're on the right side of good public policy.

"Really it's a matter of how do you want alcohol sold in your community — highly regulated or highly unregulated?" Tamm asked. "This isn't about drinking milk or water."

They also spend lots of money lobbying. The beverage association's political action committee spent nearly $23,975 in 2013, but that doesn't take into account personal campaign donations from liquor store owners, employees and allies. Big Red, the state's largest liquor store chain, alone spent $27,450.

By comparison, the Indiana Retailers Political Action Committee spent $3,300 and the Indiana Petroleum Marketers & Convenience Store Political Action Committee spent $9,436 in 2013, but again, that doesn't include donations made by individual grocery and convenience stores or executives.

The grocery and convenience store lobby said its efforts are diluted by multi-faceted business interests.

"We don't really have the attention to devote our membership to focus solely on one or two issues, like the liquor store industry does," said Scot Imus, executive director of the Indiana Petroleum Marketers and Convenience Store Association. "I think they are pretty strong in terms of involving their membership in the political process."

Package liquor store owners drive home the point they already are at a disadvantage. They're only able to sell fewer than a dozen non-alcoholic products. They can't locate near churches, or outside of city or town limits. They can't allow customers under 21 to enter and clerks must be 21 and licensed. They're only allowed to build one store per 8,000 town or city residents. Owners must live in Indiana.

The liquor stores also hammer home the point that alcohol is a controlled substance and should be sold responsibly — arguing state restrictions place them in the best position to do so.

"It's a controlled substance," said Jim James, owner of the 21st Amendment chain. "Cold beer is bought to be consumed right away. Do you really want to sell cold beer at a gas station?"

Andy Downs, director of the Fort Wayne-based Mike Downs Center for Indiana Politics, said the debate over Sunday and cold beer sales is unique because it often breaks down by legislative district rather than party lines. Lawmakers, he said, don't want to hurt local businesses.

"If you think of the district where you live," Downs said, "how many liquor stores are in that district and how many grocery or convenience stores? And which ones are locally owned?"

Tamm admits that's an advantage for the package liquor store industry.

"We are oftentimes the locally owned store and the locally owned business in the community," he said. "And our competitors are not. The Walmarts and Krogers of the world, the regional, national and international businesses, are frankly looking to put us out of business."

Liquor store owners such as Greg Boesch are often well known in their communities. He owns three liquor stores in small towns in Tippecanoe County, where he was born and raised, and he donates money to the local Lion's Club, fire departments and schools.

"I've lived in Tippecanoe County my entire life," he said.

And so, grocery, convenience stores and pharmacies have been unable to figure out how to win legislative approval against a group of relatively small business owners.

"If I had some idea of how they were able to be so successful, then we would obviously change our tactics," said John Elliott, a Kroger spokesman. "The cold beer and Sunday sales issue remains the most challenging issues that we are pursuing on behalf of our customers."

Looking forward

Legislative changes appear to have little chance of success next year.

For the past seven years, Public Policy Committee chairmen in Indiana House and Senate have been able to kill legislation on Sunday and cold beer sales without debate.

Rep. Tom Dermody, R-LaPorte, placed a moratorium on such issues during his first session as chairman of the House Public Policy Committee earlier this year. He's so far been tight lipped on what legislation he might support next year.

"I'm really spending the time this summer on these issues, meeting with the players on both sides of the issues, and (deciding) does it make sense for the state of Indiana to update laws that have been in place for many, many years. Or is there a reason the laws haven't been changed; that they're working."

Sen. Ron Alting, R-Lafayette, chairman of the Public Policy Committee in the Senate, said he, personally, remains opposed to expanding Sunday and cold beer sales.

Alting has not moved to block narrower moves, including changes this year to allow beer and wine sales at the Indiana State Fair and to allow brewers to sell growlers at farmers' markets.

In 2015, he would consider certain efforts that might help Indiana's burgeoning brewery businesses, possibly expanding limits on how much alcohol they can brew.

And he wants to ban the sale of powdered alcohol, which is gaining popularity after the federal government approved its production in April.

But Alting believes Sunday sales and cold-beer sales would hurt package liquor stores and increase the possibility of drunken driving and minor consumption. He doesn't see a compelling reason, at this point, to open the issue.

"I think common sense tells you that when you have a David and Goliath, and it seems like Goliath is winning, no matter what the subject is, it's usually a pretty good sign that there's good public policy behind David."

And so the debate seems unlikely to end anytime soon.

Call Star reporter Chris Sikich at (317) 444-6036. Follow him @ChrisSikich.

Here's a look at how the state's alcohol laws have evolved

•1918: Indiana goes dry as a state.

• 1920: 18th Amendment (national prohibition of alcohol) takes effect.

• 1933: Prohibition is officially repealed with the passage of the 21st Amendment.

• 1935: Indiana passes a liquor control act that says retail whiskey can be sold only in drugstores but not for drinking on the premises. Beer and wine can be sold in drugstores and restaurants. Sales on Sundays, holidays and Election Day are prohibited. Drinking age is 21.

• 1953: Package liquor stores are allowed to sell warm beer.

• 1963: Package liquor stores are allowed to sell cold beer.

• 1971: Sunday sales at wineries are allowed.

• 1973: Sunday sales of alcohol are permitted by the drink at restaurants, bars, hotels and private clubs.

• 2010: The prohibition of Election Day alcohol sales is repealed. Sunday carryout sales are allowed at microbreweries.

• 2013: The General Assembly passes a law to allow craft artisan distilleries to sell locally made hard alcohol such as bourbon or vodka on site. Law had allowed only the wholesale of hard alcohol.

• 2014: Wine and beer sales are allowed during the Indiana State Fair. Breweries are allowed to sell growlers at farmers' markets.

Source: Star archives.