Taking Hoosiers' Temperature on Cold Beer

Published in CSP Daily News

IPCA suing Indiana so convenience stores can sell suds on ice

INDIANAPOLIS -- Indiana is the only state that regulates beer sales based on temperature. Executives and members of the Indiana Petroleum Marketers & Convenience Store Association (IPCA) have filed a complaint in U.S. District Court against the State of Indiana challenging the law governing the sale of cold beer.

Under current law, convenience, grocery and pharmacy stores are only allowed to sell beer warm, while their competitors in the carryout market are allowed to sell beer cold. The current law also does not apply to wine products, allowing c-stores to sell these products cold.

As reported by a Raymond James/CSP Daily News Flash on Tuesday, IPCA and three of its members--Ricker's, Thorntons and Freedom Express--claim this Indiana law violates the equal protection clause of the U.S. Constitution by restricting convenience, grocery and pharmacy stores to selling beer only at room temperature. In the complaint, the plaintiffs charge that Indiana statutes and regulations have evolved into an irrational and discriminatory regulatory regime that favors one class of retailer over another.

"This lawsuit is about fairness, convenience, and promoting competition for the sale of cold beer in a rational and responsible way so that my members can serve their customers," said IPCA executive director Scot Imus. "We are confident that the court will agree with us that it is not the job of government to pick winners and losers in the marketplace."

Managing member of Freedom Express Gregory Cobb, who owns three c-stores in Kosciusko and Marshall Counties, explained that the current law is confusing to his customers who may purchase cold wine but not beer, even though wine products contain approximately double the amount of alcohol.

"Some common sense needs to be applied to Indiana's alcohol laws, so that Hoosier business owners like myself may provide products, including beer, without ridiculous temperature restrictions to their customers," said Cobb.

Indiana Excise Police compliance figures show that package liquor stores were 138% more likely to violate Indiana liquor laws between 2007 and 2012 than convenience, grocery and pharmacy stores. Similarly, restaurants and bars, which may also sell refrigerated beer, were 1,376% more likely to violate Indiana liquor law over the same period.

"There is no logic with the current law that gives one class of retailer an exclusive right to sell cold beer," said Imus. "Indiana's alcohol laws have not always favored one retailer over another and in fact, it was just in the last 50 years that liquor stores were granted the privilege of selling cold beer."

A look at the history of beer sales in Indiana shows a constantly changing regulatory environment. Coming out of Prohibition, only confectionary stores were allowed to sell cold beer. That practice ended when the General Assembly passed a law prohibiting such sales in 1941. Liquor stores could not sell beer--warm or cold--until 1953, and then, like other retailers, they were forced to sell it warm. A 1963 decision by the unelected three-member Indiana Alcoholic Beverage Commission granted liquor stores in metropolitan areas the right to sell cold beer. These changes were eventually codified into statute in 1979.

On the opposing side of the issue, the Indiana Association of Beverage Retailers said the IPCA lawsuit "flies in the face" of Indiana public policy. CEO John Livengood also said convenience store workers are not trained and licensed for alcohol sales.

"The legislature felt comfortable giving [cold beer] to liquor stores because they created liquor stores to be the principal outlet for alcohol," Livengood told TheStatehouseFile.com. "The age-restricted environment--one where minors are not even allowed in--gave the legislature confidence that it was the place for cold beer."

David Bridgers, vice president and general counsel of Thornton's, said his company, which has 26 stores and 284 employees in Indiana, would invest more in the state if the law changed or was overturned. "Indiana prides itself on being business friendly, and I believe generally it is business friendly," he told the news source. "However, Indiana's outdate alcohol law has been a determining factor in why our business has chosen to expand operations in states other than Indiana."

The IPCA is a nonprofit trade association that was formed in 1922 by Indiana wholesalers and retailers. Today, the IPCA has more than 250 members comprised primarily of small-to-medium-sized, family-owned businesses that own and operate convenience stores and supply petroleum (wholesale and retail) and related products and services throughout Indiana.