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Convenience stores continue fight for cold beer

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Indiana convenience stores are pushing forward with their effort to persuade the courts to upend the state’s restrictions on cold beer sales.

On Tuesday the Indiana Petroleum Marketers and Convenience Store Association announced it is appealing a federal court ruling that upheld Indiana’s alcohol law and has filed a complaint in Marion Superior Court.

“The fight for common sense, fair competition and rewarding – rather than punishing – responsible beer sellers continues,” said plaintiffs’ attorney John Maley of Barnes & Thornburg.

Patrick Tamm, CEO of the Indiana Association of Beverage Retailers, said he was not surprised by the notice to appeal, charging the convenience stores have already spent a considerable amount of money on this litigation.

“These plaintiffs are large corporate interests with deep pockets and have much to gain in overturning Indiana law – even as they admitted in their own testimony calling their gas stations and convenience stores that sell alcohol ‘profit centers.’”

In 2013 the convenience store association, along with Ricker Oil Co., Thornton’s and Freedom Oil, filed a complaint in federal court, challenging the constitutionality of the state statute which permits only liquor stores to sell beer cold. Richard Young, chief judge of the U.S. District Court for the Southern District of Indiana, granted summary judgment in favor of the state, finding the alcohol laws were rational.

The appeal to the 7th Circuit Court of Appeals argues the District Court committed legal error.
 
In the complaint filed in Marion County, the convenience stores revive the state claims that the federal court relinquished. In particular, the association argues that the cold beer prohibition violates the Equal Privileges Clause of the Indiana Constitution.

Maley maintained the purpose of the clause is to prevent state government from favoring one business over another. The Indiana Supreme Court has repeatedly upheld that precedent, most recently doing so in February when it overturned Evansville’s smoking ordinance, he said.

“That’s what the antiquated cold beer prohibition does in this setting. It picks a winner and establishes a monopoly,” Maley said. “Hoosiers pay more as a result and public safety is put at risk because a less-responsible retailer is given that privilege. The Indiana Constitution prohibits that.”

Maley’s reference to public safety highlights the main thrust of the association’s argument.

As in its original complaint filed in federal court, the association points to statistics from the Indiana Alcohol and Tobacco Commission that show liquor stores have been cited more time for selling to minors than groceries, pharmacies, and convenience stores combined. The plaintiffs assert that limiting cold beer sales to package stores is not rational because their compliance rate is poor compared to the other retailers.

However, Young found the statistics to be problematic. He said it is “pure speculation” to conclude the other businesses will maintain their compliance rates if they are allowed to sell cold beer. In fact, he points to testimony from Thornton’s, Inc., which noted the retailer has been cited for selling to minors in state’s were cold beer sales are permitted.

Maley and Scot Imus, association executive director, maintained the compliance rate would not fall if the retailers were allowed to put beer in their refrigerators. They argue convenience stores deter underage drinkers because the businesses are well-lit, filled with people and frequented by police. They say clerks will not forget to comply with the law against selling to minors once the beer is cold.

Moreover, they said, the beer would be removed from the shelves and floors, where it is easily seen by children and teenagers, and placed further away in the coolers where it would be less visible and accessible.

“The reason (convenience stores) do better is because of the nature of the industry,” Maley said of the plaintiffs’ compliance rate. “They are responsible sophisticated businesses, not one-off liquor stores that have an incentive to sell that next 12-pack because they need the three bucks profit.”

Early next month, Maley said the plaintiffs will be filing a motion in Marion Superior Court for summary judgment. Also, he said, the effort to get the Legislature to rewrite the state law will continue.

 

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