KEEP KANSANS IN BUSINESS Local businesses are the lifeblood of our communities
There are many claims being made about the current retail liquor system in Kansas and about the changes proposed by those wanting to create an all-access system. This page takes a closer look at those claims and the truth behind them. Check back often for updates.
FACT: People shop in Missouri because alcohol sells there for lower prices. The only way to change this is lower taxes in Kansas - not change the system.
Missouri has a significantly lower tax rate on alcohol. Missouri's beer tax is THREE TIMES LOWER and Missouri's spirit tax is the fifth lowest in the United States.
Missouri has lower tobacco taxes and their gas tax is 8 cents lower than Kanas. Missouri also only charges 2% sales tax on most food sales, compared to the average sales tax rate on food in Kansas of just more than 6%
This allows retailers in Missouri to sell alcohol and other products significantly cheaper than retailers in Kansas. For example: some products in Kansas a retailer buys from a wholesaler for $10 and sells it for $14/15. In Missouri, retailers can buy that same product from their wholesaler for $6 and sell it for $10/11. They can sell that product in Missouri to consumers for the price retailers have to pay for it in Kansas because of tax rates!
Proposed legislation does not solve this problem!
FACT: Who put them out of business? OUT OF STATE GROCERS! The Biggest threat to rural grocers is out-of-state grocers - and new Census numbers indicate now is not the time to change the current system.
For a look at how counties fared in the census, click here.
Cities and counties in rural kansas suffered decreased populations in the last 10 years. Part of the problem is local businesses being closed by out-of-state entities.
A survey conducted by Kansas State University and the Kansas Sampler Foundation found 40% of rural grocers said the biggest threat to their business is out-of-state grocers and big box stores.
David E. Procter, Director of the Center For Engagement and Community Development at Kansas State University, wrote in his 2010 article "The Rural Grocery Crisis": "The most frequent, significant challenge identified by our rural grocers was competition with big box grocery stores. In the past twenty years, we have seen a tremendous rise in the number of big-box, national-chain markets. In addition, big-box wholesalers have moved into the grocery business, and now many offer large food sections as part of their stores. Rural store owners view these stores as competition that threatens their very survival." (Read complete article here).
In a 2010 report on the factors leading to why rural grocery stores are closing, Jon Bailey of the Center for Rural Affairs, concluded the following: "The advent of corporate, chain grocery store facilities in nearby larger cities and the relative ease in driving due to advances in vehicles and highways often make shopping at larger grocery stores more attractive, further reducing the customer base and the economic margins for small, local stores."
In Iowa, where just a few years ago they allowed the sale of alcoholic beverages in grocery stores, 43% of grocery stores in communities with less than 1,000 population, have closed. A leading factor according to Mr. Procter: big box, out-of-state grocers.
None of these studies indicate that selling alcoholic beverages will keep rural Kansas stores open. But they do conclude that the biggest threat to rural, Kansan owned businesses is out-of-state grocers.
FACT: Not true - at all!
Every state has different retail liquor laws, and each system is different. Many states differentiate between the sale of alcohol by packaged stores versus convenience and grocery stores.
Some states do not allow the sale of refrigerated alcoholic beverages in retail outlets. There are control states - which only allow the state to sell spirits and/or wine. It is not correct to paint Kansas as the most regulated of states and it is certainly not correct to call Kansas' liquor laws outdated.
Kansas has a model system: it has found a balance between the desires of those who would expand access and availability versus those who would prefer a model closer to a return to prohibition.
FACT: Yes they can!
Under current Kansas law, independently owned Kansas grocery stores may invest in a liquor store, own a liquor store adjacent to their grocery store or even put a liquor department in their grocery store, as long as it has a seperate entrance and register.
If selling alcohol was a vital economic component to helping independent Kansas grocers stay in business, they would be invested in alcohol already, and no law needs to be changed for that to happen.
The proposed legislation is primarily designed to allow out-of-state corporations to sell alcoholic liquor.
FACT: In theory this sounds great, but in reality it is not possible.
The average liquor store in Kansas is 3,500 square feet or less. Proposed legislation would allow current liquor store owners to sell other products. BUT WHERE WILL THEY PUT THEM?
Many of these stores are landlocked or in areas where zoning and permitting make it impossible to expand. It's not about not wanting to compete - its about not being able to compete!
Big-box stores will simply clear off a few shelves and add liquor to their regular inventory, with no concerns about space.
If a current liquor store owner wants to move or expand, lending to small businesses is at record lows. Espcially in rural communities! And upon passage of this legislation, the state of Kansas is telling every banker in Kansas half of these stores are going out-of-business, making them a poor investment.
Having the ability to sell other products is not the issue. Having nowhere to put them - and no lending options to expand - is a practical problem this legislation ignores.
FACT: Anyone who makes this claim is distorting the truth
Kansas ABC does not track underage alcohol-sale compliance in convenience, grocery and big-box stores. It only tracks underage alcohol-sale compliance for Kansas-owned retail liquor stores. Anyone who makes this claim is comparing convenience and grocery store tobacco compliance rates to Kansas liquor store alcohol compliance rates.
Convenience, grocery and big-box stores have a higher failure rate nationally than liquor stores when it comes to selling alcohol to minors. The National Research Council Institute of Medicine found 70% of minors nationwide purchase their alcohol from grocery and convenience stores.
It also took the state of Kansas hundreds of thousands of dollars in order to get convenience and grocery stores to reach a high compliance rate! In 2005, Kansas convenience stores had a tobacco sales compliance rate of 62%.
At that time, this forced Kansas to choose between taking a $5.4 million reduction in SRS block grant funds or pay a $2.2 million penatly to be used to raise the compliance rate.
FACT: Not only is there no evidence sales will increase, but Kansas' history shows more availability DOES NOT equal increased sales.
Twenty years ago, Kansas was 34th in the United States in consumption of alcohol. Today, Kansas remains 34th in consumption.
There is no evidence or studies that show allowing alcohol to be placed in more than 2,000 new locations will lead to increased sales and new tax collections. In fact, Kansas communities prove the opposite.
In cities such as Wichita and Lawrence, where the communities are saturated with liquor stores, sales have not historically gone up when new stores have opened. Instead, sales simply spread out among the stores.
Just because a new store sells alcohol it does not mean Kansans suddenly start buying more alcohol and begin drinking more.
FACT: The opposite is true.
Big-box stores, grocery stores, and convenience stores sell a limited number of items and tend to carry national brands. As these stores dominate the market and put Kansan-owned stores out-of-business, the variety of wines and spirits available will decrease in Kansas.
A multitude of locally-owned liquor stores, each selecting products based, not on a national sales plan, but on their own interests and the needs of their loal customers, guarantees a much broader range of product choices.