When Minnesota's recent government shutdown threatened the flow of booze, it cast a spotlight on the state's heavy hand in regulating the sale of liquor.
MillerCoors nearly had to pull 39 brands off the market after not properly renewing its brand-registration licenses before the shutdown, and dozens of bars weren't able to buy alcohol because they didn't renew their $20 state-issued buyer's cards.
The near-crisis caught the attention of Andrew Schmitt, executive director of a new nonprofit group called Minnesota Beer Activists. Schmitt and his group want the state's liquor laws updated to benefit consumers and create fewer obstacles for competition.
Of course, it won't be easy to change a system that was structured in the 1930s as a way to protect public health and safety, and involves a lot of people making a lot of money.
Surly bill
The Beer Activists group, which has about a dozen hard-core members and about 500 Facebook friends, was formed this year to support a new law that lets small breweries sell beer to visitors in their tap rooms.
It's informally known as the Surly bill because it enables Minneapolis-based Surly Brewing Co. to develop a new $20 million destination brewery somewhere in the Twin Cities.
That legislation was significant because it marked a shift in what is known as the three-tiered system in Minnesota that separates alcohol manufacturers, distributors and retailers.
But the tap-room law is just the start, Schmitt said. The group is pushing for liquor sales on Sundays and for brew pubs to be able to distribute their own products. They also would like to see brand registration and buyer's card laws studied for their usefulness, Schmitt said.
None of those initiatives would likely get support from the Minnesota Licensed Beverage Association (MLBA), which has successfully opposed such changes in the Legislature for years.
Frank Ball, executive director of MLBA, credits Surly's supporters for getting the tap-room bill passed, but he doesn't expect that effort or shutdown fallout will lead to a major overhaul of the state's liquor laws.
The MLBA spent a great amount of time this session educating freshman Republican lawmakers about the need for existing laws, which legislators may have thought were unnecessary government intrusions. Ball said the laws protect small retailers from being shut out by big suppliers or manufacturers.
"[Legislators] get it now. They didn't when they got in. They're all about small businesses and they want to keep small businesses," he said. "It was a hard-selling curve."
Buyer's card and brand registration
For the buyer's card and label registration issues that got a lot of attention during the shutdown, the MLBA was in a Catch-22. It supports those laws, but it was advocating for some relief for its members who were stung by the shutdown.
The annual buyer's card is required for retailers, bars and restaurants to purchase alcohol from a liquor wholesaler. About 340 businesses were affected when their cards expired during the shutdown, Ball said.
"We warned people that you need this buyer's card," he said, but most businesses didn't think the shutdown was going to happen and or would affect them.
As a result, Ball was very busy answering questions during the shutdown.
Jim Arlt, interim director of the Alcohol Gambling and Enforcement Division of the Minnesota Department of Public Safety in St. Paul, said the buyer's card and brand-label registration laws, which weren't designed to function during a government shutdown, both provide a public purpose.
Buyer's cards protect wholesalers to ensure they only sell to companies that have had background checks and municipal approvals to sell alcohol, he said. Brand label registration helps the state ensure that products are safe for consumers, are being sold by reputable firms and are not counterfeits or illegal.
Arlt said the state's liquor laws have consumers in mind. Alcohol is a mood-altering product that has social costs. It is regulated to keep the public safe from untested and possibly deadly substances, and to keep it out of the hands of underage consumers, he said.
Small changes
Rep. Joe Atkins, DFL-Inver Grove Heights, who sponsored omnibus liquor bills in the past four legislative sessions, said prior to the shutdown, he had never heard any concerns about the buyer's card or brand licenses.
After hearing and reading complaints in the past month, Atkins said he may author a change that would give the director of the Alcohol and Gambling Enforcement Division the discretion to extend expiration dates under certain circumstances, such as a state-government shutdown.
Atkins doesn't anticipate any major effort to overhaul liquor laws in the state. But the effects of the Surly bill will be watched closely and may spur some other discussions.
"We tend to look at things on a situation-by-situation basis and listen to the input that we get from people who are passionate about the issue," Atkins said. "We always want to make sure that if we make changes to how liquor is regulated, we do so in a thoughtful way and a safe way.
We're talking about something that potentially has serious health consequences."
