Utah Tries to Define the Future of Beer While Still Trapped in the Past

Austin Ray

THE GIST
Utah’s beer industry seems at a crossroads right now, as the state’s lawmakers are trying to reconcile their historically conservative views on alcohol with the market’s demand for increased availability of more booze. As reported by the Salt Lake Tribune, the state is considering doing away with–or, at the very least, loosening–antiquated legislation that limits grocery and convenience stores to selling beer of 3.2% alcohol by weight or less, a Prohibition-era holdover still alive in but a handful of states. The decision to look into the matter isn’t one of principle, though, but rather, one of necessity. In other words, a failure to update the law apparently has the potential to seriously fuck up Utah’s entire off-premise retail tier.

WHY IT MATTERS
Utah is one of only five states in the nation that still has so-called 3.2 beer laws on the books, alongside Minnesota, Kansas, Colorado, and Oklahoma. Of the other four, Minnesota has yet to make much forward progress. Kansas and Colorado, meanwhile, have both passed legislation meant to gradually phase out the laws, freeing up convenience stores and grocers to sell higher-strength beer over time.

Oklahoma, though, is the most important of the four as it relates to Utah. Here’s why: Reportedly, only 1.8% of all beer brewed in the United States is of the 3.2 variety—it’s a specialty product, brewed by giants like AB InBev and larger craft brands like New Belgium, specifically to accommodate these market-specific laws. And of that 1.8%, a whopping 56% of it is consumed in Oklahoma. Utah follows at 29%. This past November, though, The Sooner State also voted to change the laws.

We’ve outlined the ramifications of this before, but to recap: if Oklahoma—the state that dominates consumption of this neutered beer style—doesn’t impose a 3.2 cap on these retailers, there may not be as much of a need for any brewers to even bother making them at all. Said New Belgium spokesperson Bryan Simpson earlier this year:

“If Utah and Oklahoma were to change their laws, we would have to revisit whether or not it makes sense to produce 3.2.”

So now that Oklahoma has gone ahead and voted to join us here in 2017 (though the law hasn’t yet taken effect), we find Utah questioning the confines of its own comfort zone. And while it’s easy to scream, “Ditch the cap!” many lawmakers there abstain from alcohol entirely, in accordance with their faith, the SLT notes, and fear that updating the laws would lead to more dangerous consumption and underage drinking. But the state still seems to be looking for alternatives that don’t streamline the laws.

One such route that's been discussed would be to treat beer like hard liquor by putting the Utah Department of Alcoholic Beverage Control in charge of buying, storing, and distribution, pending the theoretically forthcoming doom of 3.2 beer.

But that’s a nonstarter. “The volume of beer that is being sold in the convenience stores and grocery stores is five times all the wine, heavy beer and spirits we sell at state liquor stores,” Sal Petilos, executive director of the DABC, told the SLT. “The DABC cannot realistically replace that market if there is a complete reduction of 3.2 beer.” 

Furthermore, hitting such a panic button would likely wreak havoc in the retail tier. According to KSL, there are grocers and convenience stores that rely on 3.2 beer for nearly half of their entire revenue stream. Without a law change and without 3.2 beer, stores like these could be severely hampered if not utterly destroyed.

Another possible route comes from Utah brewers themselves, who have reportedly offered to fill the gap by producing 3.2 beer on top of their own offerings. It’s questionable, though, whether they have capacity to meet state demand.

And yet one more possible route lawmakers can explore would be to lift the cap without entirely removing it to a debatable figure far more inclusive and representative of today’s brewing industry. This would certainly but helpful, but it's not hard to foresee stakeholders arguing such a compromise doesn't go far enough.

Seldom are solutions to problems so readily apparent.

—Dave Eisenberg