Sunday alcohol sales expected to have small impact, most sellers of liquor forecast

A June study conducted by Ball State University and Old National Bank found that a majority of Hoosiers, 58 percent, supported allowing stores to sell alcohol on Sunday, which has been outlawed since prohibition ended way back in 1933.

This year, the possibility of being able to walk into an Indiana store and buy a sixpack of beer or a bottle of wine seems more likely than ever.

Thanks to a deal struck between liquor stores and big box retailers in the fall, Sunday sales bills have made it further than they ever have in the state Legislature. Both the Indiana Senate and the House have passed their own version of the legislation. Their bills would allow stores to sell alcohol from noon to 8 p.m on Sundays. The Associated Press reports that final passage of a bill is expected in mid-March, although the law wouldn’t take effect until July.

But the businesses that sell alcohol in Indiana have met the historic news with a lukewarm reception. The state’s liquor, convenience and grocery stores expect to be affected by the new rule if passed in different, but probably not dramatic ways. At the same time, compromises on separate alcohol issues have muted the wins and losses that accompany the ban lift.

“I don’t think it’s going to make that much difference where we are,” said Jay Ricker, the owner of 56 Ricker’s convenience stores throughout the state that sell alcohol.

Currently, liquor stores can sell wine, liquor and cold and warm beer all days of the week but Sunday. Convenience and grocery stores sell on the same days, but can only sell warm beer. Convenience stores also sell wine while grocery stores sell wine and liquor.

ECONOMIC IMPACT

The state’s fiscal analysis of the senate’s Sunday sales bill concluded that the 3,800 stores affected by the law probably won’t see a significant impact on their sales.

“While the added convenience and availability of alcohol sales on Sundays could potentially allow consumers to purchase more alcoholic beverages than they would have otherwise, it is likely that the majority of consumers are able to purchase all the alcoholic beverages they desire to consume within the hours dictated by current law,” read the analysis.

The document cites previous studies conducted with other states, including one from 2007 published in the National Tax Journal that showed a 2.4 increase in beer sales and a 3.5 percent increase in liquor sales after repeals of Sunday beer and liquor bans, respectively. The study does stipulate that those trends were present before the laws were changed, however. Another study, conducted in 2014 by a professor at the University at Albany in New York, evaluated five states that repealed Sunday sales restrictions. Only three experienced an increase in alcohol consumption.

In Indiana, it’s “too early to tell” what the effects of Sunday sales will be, said Paul Helmke, who has been following the bill as the director of the IU Civic Leaders Center in Bloomington.

In general, though, stores on the state border are expected to benefit from customers choosing to stay in the area. Big box retailers and, to a smaller extent convenience stores, stand to gain by being able to sell the alcohol they already stock on an extra day.

It’s liquor stores that could actually lose money because of the law as they prepare to open for a day that they’ve typically gotten off. Interestingly, it’s this dynamic between liquor stores and other shops that sell alcohol that have kept Indiana’s alcohol laws from changing as fast as they could have.

A LOOSENING MONOPOLY

Susan Kerber’s family has owned Bridge Liquors in New Albany for over 50 years.

Over the decades, they’ve expanded, remodeled and strengthened their craft beer and wine selection. But despite their evolution, sales have slowly decreased over time.

“We’re just holding on for a few more years,” Kerber said.

She fears that if Sunday sales are approved, her Saturday and Monday sales will drop off instead. In addition, she’ll be paying extra in utilities and wages to stay open that extra day. And if anyone does work, it will probably be her. Finding employees to work the rest of the week is hard enough.

Liquor stores are the original alcohol retailers in Indiana. After prohibition, the highly regulated shops were the only ones permitted to sell the taboo substance, said Helmke. The restriction on Sunday alcohol sales were also a part of Indiana’s liquor laws starting after prohibition. At the time, it was seen as a way to honor the Sabbath, as set aside in the Bible.

Over the years, though, other alcohol rules have loosened, such as the restriction on grocery stores and convenience stores selling alcohol. With each change to the law, the typical Indiana-owned liquor stores lost some of their power.

Kerber remembers when Walgreens and Kroger began selling alcohol. Before then, Bridge Liquors had something of a monopoly in its Southern Indiana town. That ended when grocery stores began selling alcohol, too.

According to Helmke, the Sunday sales ban was a way for liquor stores to still maintain an advantage over grocery and convenience stores. They might have been open on Sundays, unlike liquor stores, but they weren’t going to be allowed to sell alcohol.

Liquor stores maintain their influence over Indiana politicians with both personal connections and money. An IndyStar analysis found that from 2011 to 2016, liquor stores contributed $850,000 to state politicians, some of which went to the chair of the Senate Public Policy Committee, compared to the $600,000 and $568,000 spent by convenience stores and big box/grocery/pharmacy interests, respectively.

But the perception of alcohol in Indiana has progressed faster than the state’s laws.

“The public no longer looks at alcohol as evil like during the prohibition days,” Helmke said. “Obviously it’s something that people can abuse, but they want to be able to buy beer on Super Bowl Sunday or on New Year’s Eve.”

That citizen-focused pressure, as well as the kind heaped on from big box retailers, has caused politicians and liquor stores to rethink their stance on Sunday sales.

“Year after year it’s been building slowly and finally this year, you got to the critical point,” Helmke said.

John Sinder, the chair of the Indiana Association of Beverage Retailers, said that his organization has actually supported Sunday sales since 2015. While that may be true, it wasn’t until this year that liquor store lobbyists made a deal with big box retailers to support Sunday sales as long as the grocers didn’t pursue a bill that would allow them to sell cold beer. True to their word, the big box stores let a cold beer bill die in the Senate Public Policy Committee earlier this year.

Indiana is the only state to regulate alcohol sales by temperature.

Chilled beer seems to have become the liquor store industry’s new line for acceptable alcohol regulations, Helmke said.

“I think the theory is that if they’re the only ones who can sell the cold beer, then the folks that are going to rush out at the last minute to get beer for the Super Bowl Sunday are going to come to the liquor store, not come to the grocery store,” he continued.

Liquor stores argue that they are more highly regulated than other shops (and therefore better equipped to handle the responsibility of selling cold beer), while convenience stores say the current laws stif le their competitiveness, and they’re better at stopping underage alcohol sales anyway.

While the deal with big box retailers is keeping the liquor stores satisfied for now — Kerber lists it as one of the only reasons she supports the Sunday sales bill — it’s also why convenience stores aren’t as enthused about Sunday sales as they would be.

THE NEXT BATTLE

Cold beer is Jay Ricker’s cause. Last year, he found a way around the no cold beer rule by installing seating and serving food at two of his convenience stores, but Gov. Eric Holcomb closed the loophole allowing the anomaly, and by April of this year, Ricker will have to yank cold beer from both those stores.

Currently, beer ranks low on the list of products that actually sell at most of Ricker’s convenience stores, but Ricker believes that’s because of his inability to sell it chilled at the majority of his stores. Without the boost that would come from selling cold beer, Ricker expects that the Sunday sales bill will have little effect on his business.

But Helmke suspects that cold beer sales aren’t far behind. It’s even more popular than Sunday sales, according to the Ball State study, which showed 61 percent of Hoosiers favor expansion of cold beer sales. It will take at least a year, maybe two (and possibly even more than that) before shops besides liquor stores can sell cold beer, but if you look at the entire history of liquor laws from Prohibition to now, “it’s going to go that way,” Helmke said.

The story has always been the same: more competition, more expansion of sales.