Retail permits to sell alcohol in Indiana are determined by population quotas set by law and have been for decades. But since that system was changed by legislators in 2008, there has been significant confusion with retailers, regulators and also in Hoosier communities and neighborhoods.
In large part, that’s why the Indiana Association of Beverage Retailers has turned to the courts for clarification on the law and a determination if the formula is being interpreted by the state fairly and accurately.
The association believes the quota law is not only being misinterpreted, but potentially putting Hoosier communities at risk. Why? The statutory definition of the Indiana Alcohol and Tobacco Commission (ATC) requires the agency to “to regulate and limit the manufacture, sale, possession, and use of alcohol and alcoholic beverages.”
We emphasize the words “regulate” and “limit.”
While a Marion County judge has not granted us emergency relief in a pending court case, he did rule that the quota law is “complex and fragmentary.” So we are hopeful a court’s interpretation may move us forward.
In Indiana, the availability of permits is set by what is commonly called a quota law, which establishes the number of available permits by specific populations in incorporated and unincorporated communities. Those quota formulas should then be applied by the state commission in reviewing every new permit in any given community.
Prior to 2008, the ATC was authorized to grant one beer dealer’s permit per 1,500 people in a city or town. But the legislative change in 2008 actually decreased the number of available permits and set up three new tiers of quotas. Based on that overall reduction, permit numbers in some cities and towns, including most recently Columbus and Fort Wayne, have exceeded the limit.
In an emergency court hearing recently, the controller for the ATC testified that in her 37 years with the agency, she did not recall any situation where a community was “over quota” and a permit was denied for that reason.
That’s a stunning admission considering quota laws have been in place for decades.
One of the reasons our association filed for emergency relief and a court’s ruling in the matter is because of a recent flood of new permits coming into the state. Nearly 200 applications by the Illinois-based Walgreens are pending with the ATC. A corporation that once said it would never sell alcohol is now essentially turning its once family-friendly drug stores into liquor stores.
Those scores of applications forced us to the courts when we documented that many of those new permit requests are exceeding the legally established quota system in Indiana.
Regardless of what other retailers may say as the case makes it way through the courts, there is no economic development incentive or tourism benefit if an out-of-state drug store chain is granted hundreds of new permits to sell alcohol in local communities. The jobs are already there. And there’s no tourism advantage to having every Walgreens in Indiana selling cases of beer except as a potential sales edge to that retailer.
While the state argues that quotas are set by permit type, we believe the state is “bundling” permits and putting more sellers out there than what the law intended. That upends the intent of the quota law, potentially putting alcohol for sale on every street corner store and in every store front.
The court outcome will be important to Hoosier neighborhoods as well as Hoosier businesses.
— John Livengood
President, CEO
Indiana Association
of Beverage Retailers
Indianapolis
