Change Minnesota's liquor laws? See the bouncers

  • Article by: ERIC ROPER , Star Tribune
  • Updated: February 23, 2011 - 7:30 AM

Minnesota's liquor laws have barely changed since the end of Prohibition. Every attempt runs smack into these guys.

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Frank Ball leads the Minnesota Licensed Beverage Association, which works hard to keep the state’s liquor laws unchanged.

Photo: David Joles, Star Tribune

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Allowing liquor store sales on Sunday seemed like a good idea to Sen. Roger Reinert, who introduced a bill backing it this month. He received early support from colleagues and positive reaction from consumers tired of heading to Wisconsin for a beer run just before a big game.

Then the state's powerful liquor lobby went to work.

They held a series of private meetings with legislators, with a little extra "education" thrown in for the new freshmen.

As soon as that happened, the Duluth DFLer said, "The tone changed. Cold water has definitely been thrown on the fire."

The Minnesota Licensed Beverage Association long has been a quiet giant at the Capitol. The group has built a long, fearsome record of quashing attempts to change state liquor laws, which are among the most restrictive in the country.

Alcohol excise taxes? Not raised since 1987. Grocery retailers -- no slouches at lobbying -- have failed every time they've gone up against the liquor lobby in their fruitless quest to sell wine in grocery stores. Sales on Sunday? Consumers say they want seven-day access, but the MLBA has said no way.

The result: "Since Prohibition we have not seen any [major] changes to the liquor laws," said Jamie Pfuhl, president of the Minnesota Grocers Association.

The secret to the MLBA's effectiveness does not lie in an army of pricey lobbyists. The group has never spent more than $200,000 in a year on lobbying costs in the past decade and in most years it spends far less than that.

Instead, the association represents 1,500 mostly family-owned bars and liquor stores scattered across Minnesota. At a moment's notice, it can -- and has -- mobilized those owners to verbally pound on legislators until they concede.

"We can activate a pretty large group of individuals," said Frank Ball, executive director and chief lobbyist for the MLBA. "The grass-roots effort in the liquor industry is very effective, because we're peppered in all 87 counties."

Statewide political muscle

Political donations come quietly, individually, from the same sprawling network of mom-and-pop stores and bars, making the industry's total impact hard to discern.

Ball says his group hosts three or four fundraisers a year for each caucus, including some extra support for particular legislators. Stores and bars generally donate via personal check, rather than through the MLBA.

Campaign finance records show that when Rep. Joe Atkins headed the House Commerce Committee, 19 percent, or $5,900, of his itemized donations -- those over $100 -- came from liquor interests. Atkins noted that the bulk of his donations were under $100.

Atkins, now the ranking DFLer on the committee, said that he not only got calls from liquor store owners, but from city mayors and council members concerned about municipal liquor stores closing under Sunday sales. Minnesota has 212 cities with municipal liquor stores, a significant source of local revenue.

A 2006 report by the state legislative auditor showed that Minnesota "restricts retail competition in the liquor business more than most states." Minnesota is one of only 14 states in the country that ban the sale of liquor on Sundays and one of about 17 that prohibit selling wine in grocery stores.

In addition to MLBA, liquor interests are represented at the Capitol by the Minnesota Beer Wholesalers Association and the Minnesota Municipal Beverage Association, each of which employs a lobbying team. "We're all strategic partners," Ball said.

The beer wholesalers have donated more directly, sending about $50,000 to political parties and candidates last year. Political contributions for the House Republican caucus show clusters of liquor store and distributor donations soon after a December fundraiser hosted by the Minnesota Licensed Beverage Association.

Together, the liquor groups have fought to strictly separate the roles of manufacturers, distributors and retailers -- a three-tiered system they say has worked well. Now MLBA and the others are mobilizing against a proposal coming Monday in the Senate by upstart Surly Brewing Co. for a restaurant/beer garden/brewery that would cross those lines.

"It is a very powerful lobby," said DFL Sen. Linda Scheid, who is introducing the Surly bill and has carried wine in grocery bills for years. "They get added strength from sticking together."

'A volatile issue'

Surly owner Omar Ansari has hired his own lobbyists to push his proposal, but Scheid learned recently the bill might not get a hearing.

"I figured it'd be difficult maybe to get the whole final bill passed," Ansari said. "I didn't think it'd be so difficult to get the bill up for discussion."

Rep. Denny McNamara, R-Hastings, was among 20 legislators who voted together in support of an attempt last year to get liquor sales on Sunday. He got an earful from local liquor stores. Now he has backed off.

"I assumed my district would really want it. Now I'm wondering," said McNamara, who plans to survey his constituents on the issue.

In 2001, an effort to allow wine in grocery stores drew similar heat. DFL Rep. Michael Paymar got a call from a liquor store owner outside his district who threatened to organize against him in the next election if he voted for the proposal. "This is a volatile issue," Paymar said recently.

"There's a small liquor store in everybody's district who's willing to call their legislator and say don't do it," said DFL Rep. Phyllis Kahn, who is sponsoring the Sunday sales bill in the House. "And there isn't enough pressure on the other side."

But the group doesn't always win. In 2007, the Legislature passed a statewide smoking ban in bars and restaurants despite MLBA's push to exclude bars.

And when MLBA goes up against American Indian gaming interests, they lose. Bar owners have for years sought video slot machines and other expanded gaming in their bars, only to get shut down.

Last year, they launched a public relations campaign called "Profit Minnesota" to put a renewed focus on those efforts and emphasize the new revenues that might come in.

Ball said they've recently asked bar owners in various legislative districts to contact their legislators, and Senate President Michelle Fischbach, R-Paynesville, has since introduced the bill, which still awaits a hearing.

Why hasn't it gotten traction? Pfuhl, with the Grocers Association, has one theory. "The status quo seems to be much easier to hold on to than creating change."

Eric Roper • 651-222-1210

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