Oklahoma liquor laws

[warreng88]

Dated rules have taprooms hopping

By: Molly M. Fleming The Journal Record November 2, 2016

OKLAHOMA CITY – A brewery taproom isn’t allowed to sell food, which leaves some questions regarding how the city’s zoning applies.

Pivot Project developer Jonathan Dodson said he’s heard from some brewers interested in his team’s projects that they are hesitant about trying to open a place in the city.

The hesitation comes with the unclear zoning regulations on a taproom. A brewer doesn’t need to seek an alcoholic beverage consumption level 2 permit because the taproom can’t serve food. It can seek an ABC-3 permit, but that means it has the same hours as a bar. An ABC-3 allows for mixed-beverage sales as well.

The new interest in brewery taproom regulations came about within the last month when Senate Bill 424 went into effect and brewers could sell high-point beer by the glass. Previously, they could give a 12-ounce sample and sell their low-point beer by the glass.

“If it’s viewed as an ABC-3, a brewery couldn’t serve within 300 feet of a school or church,” Dodson said.

Dodson said that contention became a problem in Ward 6, where a school or church is on nearly every block. He said his team has a few sites where a brewery and taproom couldn’t open because of the distance requirement.

Dodson called Oklahoma City Councilwoman Meg Salyer, who organized a meeting with the city’s Planning Department and the Alcoholic Beverage Laws Enforcement Commission.

Randy Entz in the city’s current planning division said the department is trying to define the difference between a nano-brewery, a micro-brewery, and a craft brewery.

The city is also considering the elimination of ABC overlays altogether.

Planning Commission member Janis Powers asked the city to review how other cities handle alcohol zoning. She was troubled that an ABC overlay is permanently attached to a building. That allows the next user to not have to seek the commission’s approval and the business could be a nuisance.

The Planning Department is considering some type of permitting process that restaurant or bar owners could obtain. The permit would not be fixed with the property.

Dodson said the city will likely create a permitting process for the breweries with taprooms as well. The permit types will range from a brewery that’s also packaging on site, to just brewing and drinking on site.

Entz said he understands why the language needs to be reworked.

Dodson said brewers could have to spend a lot of money constructing their place, only to find out that an ABC-3 overlay is not allowed.

“We have a progressive enough group of people that are decision makers that could make this happen,” Dodson said.

[baralheia]

Okay, so I've been reading through SB383 and now I have a headache... but... I need some help clarifying what I've read. So Section 78 describes how beer brewers will be required to designate a single distributor for their products that will have exclusive rights to distribute their products for the territory they control. If I'm reading this right, that means that any given retailer will only be able to get that brewer's products from that single distributor - there will be no competition, right? Maybe I missed it, but is there any language that requires beer distributors to play fair and keep beer prices stable? As it is right now, competition between distributors keeps a lid on prices; with exclusive distribution rights, a distributor could raise the price for their product and there would be no pressure to prevent this.

[SouthsideSooner]

Okay, so I've been reading through SB383 and now I have a headache... but... I need some help clarifying what I've read. So Section 78 describes how beer brewers will be required to designate a single distributor for their products that will have exclusive rights to distribute their products for the territory they control. If I'm reading this right, that means that any given retailer will only be able to get that brewer's products from that single distributor - there will be no competition, right? Maybe I missed it, but is there any language that requires beer distributors to play fair and keep beer prices stable? As it is right now, competition between distributors keeps a lid on prices; with exclusive distribution rights, a distributor could raise the price for their product and there would be no pressure to prevent this.

You're correct. It also will be the case with liquor...so only one distributor for Crown Royal, Jack Daniels etc. and yes your concerns about the effect it will have on prices are very valid...

[baralheia]

From my reading of SB383, the same does NOT apply to liquor or wine. Section 86(A) states:

Any manufacturer or subsidiary of a manufacturer who markets its products solely through a subsidiary or subsidiaries, a distiller, rectifier, bottler, winemaker or importer of alcoholic beverages, bottled or made in a foreign country, either within or without this state, may sell such brands or kinds of alcoholic beverages to every licensed wine and spirits wholesaler who desires to purchase the same, on the same price basis and without discrimination or inducements, and shall further be required to sell such beverages only to those persons licensed as wine and spirits wholesalers.

[SouthsideSooner]

From my reading of SB383, the same does NOT apply to liquor or wine. Section 86(A) states:

The wording of that is indeed interesting but I can assure you that this bill will take us to a 3 tier system allowing exclusive agreements. Central Wholesale (the largest liquor wholesaler in the state) and RNDC (the largest spirit and wine broker in the state) will basically become one and they will be the the only company that will sell the products they represent. They will not sell any products that they don't represent. I know this to be fact. The word on the street is that Boardwalk Distributing will challenge the constitutionality of this aspect of the bill and that Centrals legal team is convinced it will stand up to the challenge...

[Laramie]

If Oklahoma successfully passes State Question 792; it could be the end of 3.2 beer altogether.

Question 792 on Oklahoma's ballot would allow grocery stores and convenience stores to sell high-percentage alcohol beer as well as wine. It could also be the death of 3.2 beer in Oklahoma and the rest of the nation.

"If something happens and brewers decide to move away from the market, we need to make sure we're able to deal with the fallout from it," Sal Petilos, the executive director of Utah's Department of Alcoholic Beverage Control.

Utah braces for impact of Oklahoma’s 3.2 beer vote: http://fox13now.com/2016/10/27/utah-...3-2-beer-vote/

[ctchandler]

Kind of sad for me, 3.2 beer suits me. Yes, I go to nice bars and enjoy craft beers, but it's limited to two or three. When I'm home, 3.2 is what I like. You have to understand, I don't drink coffee, tea, or soft drinks, beer and water are my drinks of choice and I really don't need strong beer for that. I even avoid the really strong craft beers (with the exception of Roughtail Hoptometrist),
C. T.

[stile99]

Keep in mind that 'could' and 'will' are not the same thing, and smart retailers sell what their customers want to buy. If you want 3.2 beer, you will still be able to get 3.2 beer. Might not be everywhere, but it will be available, as long as you purchase it. If the demand goes away, so will the product.

[Bill Robertson]

Keep in mind that 'could' and 'will' are not the same thing, and smart retailers sell what their customers want to buy. If you want 3.2 beer, you will still be able to get 3.2 beer. Might not be everywhere, but it will be available, as long as you purchase it. If the demand goes away, so will the product.

Not so sure. Oklahoma, Utah, Colorado, Kansas and Minnesota are the only 3.2 states. Oklahoma is the largest consumer of those states and the new law will go a long way towards doing away with 3.2 beer. Kansas is also working toward doing away with 3.2 beer. If Oklahoma allows "strong" Bud/Coors/Miller and their side brands it will likely become not economically feasable for those brewers to keep producing 3.2 beer.
http://www.taptrail.com/can-oklahoma-kill-3-2-beer/

[Bullbear]

The 3.2 ABW vs 6.0 ABV beer is silly to me.. wouldn't hurt my feeling to see 3.2 go away. when you consider if you measure 6.0 ABV by weight it is 4.7ABW there isn't enough difference to me to make it worth the trouble.

[jerrywall]

Not so sure. Oklahoma, Utah, Colorado, Kansas and Minnesota are the only 3.2 states. Oklahoma is the largest consumer of those states and the new law will go a long way towards doing away with 3.2 beer. Kansas is also working toward doing away with 3.2 beer. If Oklahoma allows "strong" Bud/Coors/Miller and their side brands it will likely become not economically feasable for those brewers to keep producing 3.2 beer.
http://www.taptrail.com/can-oklahoma-kill-3-2-beer/

The only reason I could see 3.2 surviving is if they don't update the statues for festivals, tailgating, state parks, etc. There would still be a demand for 3.2 beer in that case.

[Bill Robertson]

The only reason I could see 3.2 surviving is if they don't update the statues for festivals, tailgating, state parks, etc. There would still be a demand for 3.2 beer in that case.

Could be. But would that be enough volume for Bud/Coors/Miller to keep a manufacturing line open for 3.2?

[jerrywall]

Could be. But would that be enough volume for Bud/Coors/Miller to keep a manufacturing line open for 3.2?

No idea. I know locals brewers did produce 3.2 for exactly these reasons.

[Bill Robertson]

The 3.2 ABW vs 6.0 ABV beer is silly to me.. wouldn't hurt my feeling to see 3.2 go away. when you consider if you measure 6.0 ABV by weight it is 4.7ABW there isn't enough difference to me to make it worth the trouble.

Especially if it's mass produced beers because while most everyone calls them 6 point they're not. For instance, every bar I know calls PBR 6 point. Various web sites list PBR as 4.74 to 5.0 ABV. Strong Coors/Bud/Miller are really 5.0 ABV and thier light versions are 4.2 to 4.5 ABV. 3.2 beer is 4.0 ABV. There really isn't much difference.

[onthestrip]

You're correct. It also will be the case with liquor...so only one distributor for Crown Royal, Jack Daniels etc. and yes your concerns about the effect it will have on prices are very valid...

And this is the biggest concern of this question. If passed, I assume we will see higher prices in short time for liquor.

[riflesforwatie]

And this is the biggest concern of this question. If passed, I assume we will see higher prices in short time for liquor.

I see why this is a concern, but you'll still have competition amongst brands, right? So let's say some distributor signs an agreement with Brown-Forman to distribute Jack Daniels, that distributor jacks the wholesale price up 15%, and the retail price goes up correspondingly. Presumably sales decrease.

But Diageo let's say has a competing brand and they sign with a different distributor that doesn't jack up the price, and their sales increase since their competitors are now more expensive. Isn't Brown-Forman then going to have a stern talking-to with their distributor? Unless I'm misunderstanding, you still have competition in the mooted system, it's just that now the distilleries (or breweries) are competing with one another, instead of there being one wholesale price. The package stores will still be able to compete with one another on price, like they do now, right?

[Bunty]

The only reason I could see 3.2 surviving is if they don't update the statues for festivals, tailgating, state parks, etc. There would still be a demand for 3.2 beer in that case.

I wonder how 3.2% beer is surviving in CO and MN, because they sure aren't selling as much of it as Oklahoma.

[onthestrip]

I see why this is a concern, but you'll still have competition amongst brands, right? So let's say some distributor signs an agreement with Brown-Forman to distribute Jack Daniels, that distributor jacks the wholesale price up 15%, and the retail price goes up correspondingly. Presumably sales decrease.

But Diageo let's say has a competing brand and they sign with a different distributor that doesn't jack up the price, and their sales increase since their competitors are now more expensive. Isn't Brown-Forman then going to have a stern talking-to with their distributor? Unless I'm misunderstanding, you still have competition in the mooted system, it's just that now the distilleries (or breweries) are competing with one another, instead of there being one wholesale price. The package stores will still be able to compete with one another on price, like they do now, right?

Ya but there are so few distributors in this state, what, like 2 or 3, that they will likely no just Jack Daniels but possibly every other whiskey. I dont know if that will happen but its a concern, and I know there could be better liquor reform options. Probably will still vote yes

[jerrywall]

I wonder how 3.2% beer is surviving in CO and MN, because they sure aren't selling as much of it as Oklahoma.

That's actually the point of some of the articles I've seen. Basically, Oklahoma's sales of 3.2 make if feasible for those other places to have it. Folks in Utah are actually afraid of losing all beer if this passes in Oklahoma.

[Bill Robertson]

No idea. I know locals brewers did produce 3.2 for exactly these reasons.

Didn't think of locals. I can see locals still producing it for events since it would be a more decent percentage of total output. I just can't see the big 3 wanting to brew, store and distribute 3.2 if Oklahoma and Kansas both drop consumption considerably. It would be fine by me if events had 3.2 local beers only. That is as long as they're not 10 bucks a pop.

[Bullbear]

That's actually the point of some of the articles I've seen. Basically, Oklahoma's sales of 3.2 make if feasible for those other places to have it. Folks in Utah are actually afraid of losing all beer if this passes in Oklahoma.

Not sure why they would lose beer entirely if they already have malt beverage over 3.2 available in state run liquor stores. I don't see why that would stop.

[OKCRT]

Not sure why they would lose beer entirely if they already have malt beverage over 3.2 available in state run liquor stores. I don't see why that would stop.

IDK but if you start drinking the stronger beer you will not likely want to go back to the 3.2. Not that much different but it taste more like beer should taste and the 3.2 is just a watered down version. It won't take beer drinkers long to forget about the 3.2 IMO.

[ctchandler]

OKCRT,
I've seen several comments (and heard them as well) that 3.2 beer is just a watered down version of "strong" beer. Actually, that's not the case. I have home brewed and the alcohol content has to do with the brewing, not the additional water. At home I brewed five gallon batches regardless of the alcohol level. Not jumping on you, but your comment reminded me of my home brewing days, not the "good old days" because I really didn't enjoy it even though the beer was very good. Too much effort and little or no savings. Much easier to go to the store!
C. T.

[Bill Robertson]

OKCRT,
I've seen several comments (and heard them as well) that 3.2 beer is just a watered down version of "strong" beer. Actually, that's not the case. I have home brewed and the alcohol content has to do with the brewing, not the additional water. At home I brewed five gallon batches regardless of the alcohol level. Not jumping on you, but your comment reminded me of my home brewing days, not the "good old days" because I really didn't enjoy it even though the beer was very good. Too much effort and little or no savings. Much easier to go to the store!
C. T.

Thank you! I wanted to bring this up but simply was hesitant to start another controversy. Now that its been said. I've been through both the Golden CO, Coors brewery once and the St Louis Mo, A-B brewery many times. They explain how everything in the process affects the final product. Just like you said, the alcohol content has to do with the process not "watering" the product down.

[Bill Robertson]

IDK but if you start drinking the stronger beer you will not likely want to go back to the 3.2. Not that much different but it taste more like beer should taste and the 3.2 is just a watered down version. It won't take beer drinkers long to forget about the 3.2 IMO.

I have actually had a Texas Coors and an Oklahoma Coors side by side with only my wife knowing which was which. I couldn't tell the difference. I tried about ten times and went right at 50/50 guessing which was which. I'm not doubting that lots of people with more sensetive taste than mine can tell the difference. But I also bet there are a similar number like me that can't.