Big changes to how Utah manages and operates alcohol sales could be coming – if enough voters sign onto it.
A group filed a citizen initiative to overhaul what they consider a monopoly on liquor, wine and high-point beers. They call Utah’s state control of alcohol “prejudiced due to endemic partisan politics and influenced by specific religious special interests” in filing documents.
Jeff Carter is spearheading the “Citizen Initiative to Amend and Modify Title 32B. Alcoholic Beverage Control Act” effort to get on the 2024 ballot. Carter spent 17 years as a vendor who sold alcohol to the state and he also used to work in the restaurant industry. That experience, he said, taught him a lot about the intricacies surrounding Utah liquor laws and the stranglehold the state has on the distribution of it.
“Republicans are all about small government and business. But it seems to me like this whole way of handling alcohol totally contradicts what they're supposed to be about,” he said. “I believe that a lot of people, whether they're religious or not, don't believe that the government should be involved in buying and selling alcohol.”
What will it do?
The initiative would make the following changes:
- Do away with the majority of state-owned and operated liquor stores
- Allow privatized liquor and wine stores in Utah
- Authorize the sale of anything above 5% ABV (liquor, wine and high-point beer) in some grocery stores, like Costco and Trader Joe’s
- Decrease state retail markup of 88% over cost to 30% flat tax on alcohol over 5% ABV to create a wholesale price for retailers
- Allow wine to be shipped to consumers directly
Carter formatted the initiative from a business perspective with the hope of making alcohol purchases more business and consumer-friendly. It doesn’t seek to override consumption restrictions, like the restrictions on having high-point beers on tap or being able to order a double gin and tonic at the bar.
Under Utah law, bars and restaurants are required to pay full retail price for alcohol. In other words, they pay the exact same amount as someone purchasing a bottle of whiskey from a state-run liquor store. To Carter, local bars and restaurants already struggle to make ends meet without the added cost of alcohol.
“There’s no wholesale break for them.”
Alcohol management is currently overseen by the Department of Alcoholic Beverage Services. But under the proposal, the agency would close the majority of state-owned and operated liquor stores and replace them with privatized liquor stores. However, Carter said the initiative “doesn’t create total privatization” and “Utah would still be called a controlled state.”
The initiative would also expand where alcohol could be sold. Carter said a handful of big stores, like Trader Joe’s, Harmons and Costco, could apply for a “package agency license” and be able to sell more alcohol.
“The biggest benefit to that is if you have people not driving out of state to buy alcohol,” he said.
Why now?
One of the reasons is the fact that Utah is one of the fastest growing states in the nation. Carter thinks his proposal is more “consumer friendly” by not restricting when and where someone can purchase alcohol.
“I live in the heart of the city and almost every liquor store closes at 7:00. And if I want a nice bottle of wine and it's 7:05, then I'm out of luck,” Carter said.
Tanner Lenart, a Utah attorney who only practices liquor law, said she’s noticed public perception shift around alcohol as well. When she first started practicing liquor law a decade ago, Lenart said there were many steps needed for a restaurant or a bar to gain local approval for seeking a liquor or wine and beer license.
“It used to be if somebody came to me and said, ‘Hey, I want to open up a little cafe in this small town in Utah and I want to serve just wine and beer,’ we would have to go before the city council and have a big presentation and there would be a lot of back and forth about it,” she said.
Now, the process has simplified significantly.
“What's become more common is that the clients would come to me and say, ‘Hey, I'm opening this little bistro in this little small town, and I've already got these letters of support from the mayor,’” she said.
However, she recognizes some of the obstacles to pushing the initiative forward. The state has complete control over the sale and distribution of alcohol currently.
“I don't think that there's a way to circumvent the fact that the Legislature would be scared to give up the control aspect of it,” she said.
For Gov. Spencer Cox, the current way DABS manages alcohol distribution is “an appropriate system,” but he said some changes need to happen to make the process “more user friendly” and “business friendly.”
Overall, Cox said he “is not supportive of the initiative,” and thinks the state is “doing something right” because Utah has the lowest rate of excessive drinking in the nation.
What’ll it cost Utah?
The Office of the Legislative Fiscal Analyst published the estimated cost it would take to implement the initiative, and it’s a pretty penny.
“Enactment of this proposed law could decrease General Fund revenue by $120 million annually and increase General Fund costs by $6 million one-time,” read the letter.
The initiative slashes the amount the state generates from the high tax on alcohol, setting the state up to lose $164 million annually. The office added the initiative could save the state $43 million yearly in operating costs.
Alcohol sales fund free school lunches for students in need, public safety and an anti-underage drinking campaign. The office stated the proposal would generate $1 million for those programs annually.
What’s the timeline?
Landing an initiative on the ballot isn’t easy. Carter has a short period of time to gather the needed 134,000 signatures.
Before signature gathering can start, Carter has to host and organize seven public hearings throughout the state. Once that is completed, he can start compiling packets for signatures. After the first person in favor of the initiative signs the packet, Carter has 30 days to collect all the signatures needed. He would need to turn in the signatures by Feb. 15.
Carter said he plans on paying people to help collect the needed signatures. He is also speaking with business owners who might be interested in helping fund the initiative.
Carter is aware of how big of a feat it will be to get the initiative on the 2024 general election ballot, but it’s not going to stop him from trying.
“Utah is ready for it,” he said. “This Dec. 5 coming up will be 90 years since Prohibition. And I think it's time for a change.”
