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Ballot initiative seeks to put wine & spirits in Utah grocery, convenience stores

Posted at 5:49 PM, Aug 01, 2023

SALT LAKE CITY — A citizen ballot initiative has been filed, seeking to loosen Utah's tight grip on alcohol policy and put wine and spirits in grocery and convenience stores.

The "Citizens' Initiative to Amend and Modify Title 32B," would significantly change how liquor is sold and taxed in Utah.

"It's not total privatization," Jeff Carter, the initiative's primary sponsor, said in an interview Tuesday with FOX 13 News.

The initiative would do a lot, starting with reducing the legally-mandated cost-plus 88% markup on alcohol products sold in the state to only 30%. It still earmarks money for school lunches for children in need, public safety, anti-youth drinking programs and the state's general fund. The citizen ballot initiative would force state-run liquor stores to be sold to private owners, making Utah's Department of Alcoholic Beverage Services a wholesaler only. It also modifies the quota to add more "package agencies," which are privately-run liquor stores that contract with the state.

"This will allow Costco or Trader Joe's to essentially get a package agency license and bring their products in, and whether they clear it through the state or they have a direct shipping wholesaler bring it to them," Carter said. "They’ll be able to buy it at that 30% markup and then retail it."

It also allows for direct shipping of alcohol from out of state to consumers (though the state collects some funds through a licensing structure created by the initiative).

Carter is a former wine industry representative and authored a book under a pseudonym called "Mormons, Merlot & the Utah Liquor Monopoly." He said the initiative is something he has been pursuing for years now.

The initiative has already cleared some of the first hurdles with the Utah Lt. Governor's Office. Carter and the other initiative sponsors are now planning public hearings at the end of this month before beginning the process to collect more than 134,000 signatures required by law. Carter said he is seeking financial backing to hire signature-gatherers and to gain public support for the initiative.

The Office of the Legislative Fiscal Analyst said if it is successful, the Title 32B initiative could cost the state a lot of money.

"Enactment of this proposed law could decrease General Fund revenue by $120 million annually and increase General Fund costs by $6 million one-time. The law would decrease the state's mark-up on alcoholic beverages by 54 percentage points on average (-65%), reducing revenue by $164 million annually. It would change licensee fees, increasing revenue by $2 million annually. State operating costs could decrease by $43 million annually while transfers to various education and enforcement programs could increase by $1 million annually. The sale of assets could nearly offset existing debt and other one-time costs, falling $6 million short," the analysis prepared for Lt. Governor Deidre Henderson's office said.

Carter said he believed the free market would more than make up for those losses.

"I know the state should make some money off alcohol. I don’t believe they should make all the money," he said.

Utah has been a liquor control state since it cast the deciding vote to end Prohibition. It has also been extremely profitable. Last year, the DABS reported $577 million in sales.

"I think we’ve got a really good system that works well," said Sen. Jerry Stevenson, R-Layton, who is tasked by the Republican super-majority in the Utah State Legislature with running alcohol legislation.

He said at first glance, he would be opposed to the citizen ballot initiative — arguing that there are benefits to being a liquor control state from lower taxes to reduced social harms.

"I would think it’s not a good idea for the state of Utah," he said. "You’ve heard me say this lots of times. We're the lowest in the country as far as drunk drivers. We're the lowest in the country as far as our youth getting hooked on alcohol. If you go along and look the dollars we spend and what we do..."

The initiative may also face other forces that could marshal against it, including social conservative groups on Utah's Capitol Hill and The Church of Jesus Christ of Latter-day Saints, a powerful political and cultural influence in the state whose members do not imbibe. The Church has weighed in on alcohol policy in the past, opposing efforts to loosen liquor laws.

"Of course it’s going to be a hurdle, but I think there’s a lot of people that don’t drink alcohol that just don’t really care," Carter said, noting that Utah's demographics are changing. "I think that some of them find it appalling they charge businesses 88% to stay afloat."

Read the ballot initiative here: