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Consultant: Grocery stores should sell liquor through separate facilities

SALT LAKE CITY — The state should look at letting grocery stores sell liquor, consultants hired to come up with a new business plan for the Department of Alcoholic Beverage Control told a legislative committee Wednesday.

But the Bonneville Research consultants said the liquor operation should remain separate from the grocery stores themselves, likely as separate, stand-alone facilities in the same retail complex.

"We never thought it was appropriate to sell alcoholic beverages in stores alongside pears and apples," the firm's president, Bob Springmeyer, told the Business and Labor Interim Committee.

Instead, Springmeyer, a former Democratic candidate for governor, cited the state's Avenues liquor store as an example of an outlet that could be turned over to a grocery store to run as a package agency.

Package agencies are privately operated liquor outlets that share profits with the state. They are typically located in less-populated areas of the state, but the consultants suggested they be looked at like franchises.

The Avenues liquor store is located in a retail complex owned by Smith's Food and Drug, which has a grocery store on a separate level. Springmeyer said the state leases space for the liquor store from Smith's.

A spokeswoman for Smith's, Marsha Gilford, told the Deseret News that "Smith's would be very happy to talk about any ideas that would come forward."

She said the grocery store chain currently operates in seven states "and in every state except Utah, we sell heavy beer, wine and/or hard liquor in our stores, so we have a lot of experience and depth in being responsible managers of liquor sales."

Rep. Todd Kiser, R-Sandy, said he's already heard from a constituent who was excited at the prospect of being able to buy alcohol where she does her grocery shopping and would increase her purchases if that option became available.

"We want to control impulse buying," Kiser said, suggesting that could lead to overconsumption.

Another member of the committee, Rep. Brian Doughty, D-Salt Lake, said the state should be out of the liquor business and not concerned with whether he bought a bottle of wine on impulse.

"I feel like we're looking at a nanny state a lot of times," Doughty said.

Springmeyer, whose firm was paid nearly $100,000 for the business plan, said any such liquor outlet would have a separate entrance and cash register than a grocery store.

He also said it could be located near the store, as some banks and fuel stops already are. But the alcohol would not be sold "actually in the grocery store as you would expect to see in California."

Kiser asked if the proposal would include removing low-alcohol beer from the grocery stores operating package agencies. Springmeyer said that would be an option.

Springmeyer told reporters after the meeting, where no action was taken on the proposal, that he did not believe allowing grocery stores to operate package agencies would lead to overconsumption.

"If we have stores located where people do other parts of their shopping will that, may that increase alcohol consumption? Frankly, I don’t think it does," he said. "I think Utahns are adults and can make their adult decisions."

The state controls the sales of liquor, wine and high-alcohol content beer, in retail outlets as well as in restaurants and bars. Some lawmakers are talking about privatizing those sales.

The DABC, which oversees the sales, has been the subject of multiple legislative audits. The most recent found the agency had been "incompetently managed" and accused the former executive director of committing a felony by doing business with a company owned by his son.

The allegation is under investigation by the Utah Attorney General's Office and the head of the Department of Commerce, Francine Giani, is temporarily running the agency.

Earlier legislative audits raised questions about threatened liquor store closures to meet budget cuts and found a $300,000 loss by a now-closed package agency in Eden.

Springmeyer's recommendations included consolidating stores in Murray and South Salt Lake, and the Avenues and downtown wine stores in addition to converting three stores into package agencies — the Avenues and two in Park City.

The co-chairman of the committee, Sen. John Valentine, R-Orem, said after the meeting there might not be interest among lawmakers in expanding the consultant's proposal for grocery store-operated package agencies beyond the Avenues store.

"That store is a unique store," Valentine said. "I'm not certain that lawmakers are really willing to buy into that type of thing as a general protocol throughout the state."


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