Since 1935, the Morgan City pharmacy has been selling alcohol in a cordoned-off section of the store that has its own counter, cash register and clerk. The so-called liquor package agency permit was granted three months after then-Gov. Henry Blood signed HB 41, ending Prohibition’s 18-year “long dry rule” in Utah.
On Wednesday, Bonneville Research consultant Bob Springmeyer told the Business and Labor Interim Committee that the state could save money and improve efficiencies if more package agencies such as the Morgan Drug Store were created.
The presentation drew a mixed response.
Package agencies are different from larger state-owned stores in that they are privately run outlets in small towns and resorts. Monthly payments from the state to the operators are based on sales volumes. But the state should look at expanding the system to urban areas, allowing grocery stores to sell all types of liquor in a similar, private-contractor arrangement, said Springmeyer.
While the state has annual sales of more than $300 million, Bob Springmeyer, president of Bonneville Research, said that allowing privately owned liquor stores at grocery stores would boost that revenue. Bonneville was hired by the Legislature to provide recommendations for improving the retail operations of the state's liquor agency.
Liquor and wine would not be sold in the actual grocery store, and Springmeyer said that the low-alcohol beer could also be taken off grocery store shelves and moved into the separate liquor store.
"We've never thought it appropriate in the state of Utah to have alcohol sold in the grocery stores next to apple juice and produce," Springmeyer said.
Other recommendations made by Springmeyer's company were giving stores more flexibility to set hours that can accommodate peak traffic times, consolidating some stores paying store employees more money to reduce training costs.
Lawmakers are expected to make significant changes to the Department of Alcoholic Beverage Control during next year's legislative session. A recent audit revealed years of mismanagement and a former director was forced to resign earlier this year after it was discovered that a company owned by his son had ongoing contracts with the agency for warehouse supplies.
Among the proposals that will likely be floated is the privatization of liquor stores, although the state would likely retain the existing monopoly on distribution. Historically, Utah legislators — a strong majority of which are members of The Church of Jesus Christ of Latter-day Saints, which prohibits alcohol consumption — have been opposed to loosening laws pertaining to the retail sale of liquor.
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