Utah's 3.2 beer market could cool as other states enact more lenient laws – St George News



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Beer in a supermarket, Salt Lake City, Utah, undated. | Photo courtesy of Ben Winslow, Fox13now.com, St. George News

OKLAHOMA CITY (AP) – Brew snobs are raising their jars to a stronger brew in three states that once forbade merchants from selling anything except brands with low alcohol content, and the changes could indirectly paralyze the industry in Utah and another state, the only markets remaining where those regulations are maintained.

Darby Rose works on the packaging line at COOP Ale Works in Oklahoma City, January 18, 2019. COOP Ale Works, which distributes in six states, including Oklahoma and Kansas, has discontinued two of its three 3.2 percent beers | Photo by Associated Press by Sue Ogrocki, St. George News

Until October, Oklahoma grocery stores and convenience stores could store beer with only an alcohol content of up to 3.2 percent, considerably lower than leading brands of light beer. Liquor stores could sell beer stronger than 8.99 percent, but were forbidden to sell cold beer of any power.

The voter-approved changes now allow for stronger beers to be sold in Oklahoma grocery and convenience stores. And many of the changes are being adopted this year in the contiguous states of Colorado and Kansas.

The beer revolution will leave only two states, Utah and Minnesota, where only 3.2 percent of beer can be sold in supermarkets and convenience stores. Observers in the beer industry tell how lawmakers in those states react to the changes and could determine whether the future of low-point beer in the United States is as flat as a week's beer. Half of the 3.2 beer market in the country was in Oklahoma and an additional 20 percent was in Colorado.

"It's a dramatic downfall," said Brett Robinson, president of Beer Distributors of Oklahoma, which represents some beer distributors in the state. "In Oklahoma, beer is just beer now. There is no more definition or clbadification. "

Oklahoma was the first of the nation's five beer 3.2 states to make the change, representing a major change for the state where alcohol was illegal until voters revoked the state-wide ban in 1959, 26 after the ban was repealed at the national level.

"It's been a long time," said Lisette Barnes, president of the Oklahoma Beer Alliance, a trade badociation for the brewing industry. "It's refreshing, I think overwhelmingly people are excited about that, it's been good for industry and consumers alike."

The cans of the Alpha Hive Double IPA spring season are ready to be filled with beer at COOP Ale Works in Oklahoma City on Friday, January 18, 2019. COOP Ale Works, which distributes in six states, including Oklahoma and Kansas , has discontinued two of its three 3.2 percent beers. | Photo by Associated Press by Sue Ogrocki, St. George News

As the market for "baby beer" continues to decline, brewers must decide if it is profitable to continue to do so, a decision that could cause low-point beer supplies to run out in Utah and Minnesota.

Anheuser-Busch, the world's largest beer producer, said it will work to meet the needs of consumers by 3.2 percent of beer states, even amid declining demand.

"While we will continue to produce 3.2 percent beer, the regulatory and legislative changes in Oklahoma, Colorado and Kansas that affect the 3.2 percent beer demand will impact our domestic production," the company said in a statement in December.

But some brewers are already reducing their beer production by 3.2 percent. The COOP Ale Works craft brewer, based in Oklahoma City, which distributes in six states, including Oklahoma and Kansas, has discontinued two of its three 3.2-percent beers.

"The only reason we produced those other two beers was to have beer in grocery stores and convenience stores," said Sean Mossman, director of sales and marketing at COOP. "Now that we can sell our most popular styles in grocery stores, we simply do not see any need to continue making those beers."

And the sale of COOP's flagship beers in grocery stores "has been a blessing to us," Mossman said. He said the brewing business has increased 50 percent in the months since Oklahoma shopkeepers began storing their strongest beers. The new regulations will go into effect in Kansas in April, when grocery stores and convenience stores can start selling beer with an alcohol content of 6 percent.

Josh Yager transfers cans of F5, one of his most popular beers, from the COOP Ale Works production line in Oklahoma City, January 18, 2019 | Photo by Associated Press by Sue Ogrocki, St. George News

"In general, we are very happy with the death of 3.2 beer," he said. "The death of beer 3.2 is good for us."

Decreasing low-point beer supplies is something that state regulators have considered.

"That's the question we've been facing for a couple of years," said Terry Wood, communications director for the Utah Department of Alcoholic Beverage Control. "You can make business decisions that make it a financial option for breweries to stop producing 3.2 beer."

For now, the New Belgium Brewing Co., a craft brewery based in Fort Collins, Colorado, will continue to produce low-point beer, spokesman Bryan Simpson said. The 3.2 percent production comprises only half of the 1 percent of the brewery's overall production, and the company will buy it exclusively in Utah, Simpson said.

"It makes sense that we do it because we want to have a presence there," Simpson said. He said the company's breweries are already set up to produce low-point beer and "there's really no point in slowing down."

Former Minnesota state representative Jenifer Loon, who authored legislation that repealed a long-term ban on liquor sales on Sundays in 2017, said regulatory changes in other states are likely to force Minnesota lawmakers Consider the possibility of allowing beer in grocery and convenience stores.

"The market is probably going to control this – in the foreseeable future, there probably has to be a change," Loon said.

Shopkeepers have expressed support for the sale of strong beer in the past, but any effort to expand beer sales will likely face stiff opposition, he said.

"It has been very difficult to drag our alcoholic beverage laws into the 21st century," said Loon.

Written by TIM TALLEY, Associated Press.

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