Grocery and convenience stores that sell beer in Utah are gearing up for big changes, mandated by state law and designed to curb excessive in-store advertising and consumer confusion over flavored beer and ciders.
“This is going to impact 3,000 stores,” Dave Davis, president of the Utah Retail Merchants Association, said of the changes that legislators approved in 2017 as part of a massive overhaul of the state’s liquor laws.
The law, sponsored by Rep. Brad Wilson, R-Kaysville, got a lot of attention because it loosened the state’s barrier — aka Zion Curtain — requirement for restaurants. It also boosted the state markup on booze.
But buried within its 144 pages was language that tightened the restrictions for beer displays in grocery and convenience stores. Lawmakers wanted to prevent confusion between nonalcoholic beverages and flavored beers and ciders, which often have similar labeling.
“They also didn’t like when beer was displayed all over the store,” said Davis, adding that cross-merchandising — like putting tortilla chips next to the beer just before the Super Bowl — was also distasteful to some lawmakers.
(Trent Nelson | The Salt Lake Tribune) The 3.2 beer on the shelves at Smith's Grocery in Salt Lake City, Friday, Jan. 26, 2018.
While legislators wanted to put uniform restrictions on beer retailers statewide, enforcing the new requirements was problematic since they were not licensed by the Utah Department of Alcoholic Beverage Control. Beer retailers get permission from cities to sell beer that is 4 percent alcohol by volume — or 3.2 by weight. (Beer that has a higher alcohol content is sold at state-run liquor stores.)
Lawmakers solved the problem by requiring stores to get a state license. It also gave the DABC funding to hire five new compliance officers to ensure that stores are meeting the law, explained Stephne Hanson, the DABC’s off-premise beer manager.
Under the provision, stores that want to sell beer must obtain an “off-premise” license from the DABC before March 1, 2019.
It’s one more issue that is keeping store owners up at night, Davis said. Beer retailers already were anxious because the 3.2 beer selection is expected to dwindle later this year — or in early 2019 — when Oklahoma, Colorado and Kansas start allowing stronger beer in grocery stores.
On Tuesday, Hanson said she has been working with the Utah Retail Merchants Association, as well as large companies such as Kroger and Maverik, to ensure all stores are in compliance by the deadline. “We’re not here to shut people down,” she said. "But we need everyone to get licensed, or beer comes off the shelves.”
To get the license — named because the beer that is sold is consumed off-site — the retailers must submit, among other things, a license application, a $325 fee and a floor plan highlighting all beer displays and beer storage areas, said Hanson.
Stores are also required to implement several new operational requirements, including:
Displays • Stores will be allowed only two beer displays, said Hanson. “Before, they could have as many as they wanted.” One can be the cooler, aisle or room where beer is the only beverage displayed. The other display, according to DABC information given to stores, can be anywhere in the store, except “adjacent to a display of nonalcoholic beverages,” unless there is a door, physical divider or other display separating the products.
Warning signs • Stores will be required to post signs at each beer display that read: “These beverages contain alcohol. Please read the label carefully.” The signs must be “prominent and easily readable by a consumer." The type must be bolded and no smaller than 0.5 inch.
Badges • Cashiers who are at least 16 are allowed to sell beer if they are under the supervision of a person 21 or older. These supervisors — and those who sell beer to patrons — are required to wear a “unique identification badge” on the front of their clothing. It must be visible and include the employee name, initials or identification number. Retailers must keep a record of the staff information — including a driver license number. Stores can be fined for failing to require staff to comply with the badge requirement.
Training • Managers and staff must complete alcohol training within 30 days of hire.
Sale-to-minor penalties • In addition to any criminal penalties that may be imposed, employees or supervisors who are caught selling beer to minors will face tiered penalties. On the first violation, employees will be given a warning and be required to retain alcohol training; subsequent violations will include fines ranging from $250 to $500 and possible suspension.
While the compliance deadline is about five months away, more than two dozen stores from Hart’s Gas and Food in Lehi to the Sinclair in Provo have already been approved for an off-premise license. Many stores, even those that haven’t applied for the state license, cut back on displays as soon as the law passed in 2017.
While large beer manufacturers haven’t noticed the decrease in visibility, small brewers, like Salt Lake City’s Red Rock Brewing, have felt the hit.
“It had a huge impact on us,” explained Shantel Stoff, Red Rock’s sales and marketing director. “It was most noticeable during the holidays, when we were about 27 percent down in our Holiday Ale.”
Stoff said the brewery typically had an attractive display with Christmas trees and large beer barrels at all 17 Harmons Grocery stores in the state as well as four Whole Foods stores.
“When the law went into effect, we went down to one small display,” she said. “Usually we sell out, but in January, we still had a lot of holiday beer that we couldn’t sell.”
