Liquor dealers win first round against Bevin Administration in liquor license fight

Retail liquor dealers won their first fight Tuesday in the Kentucky legislature against state alcohol officials, who have proposed scrapping limits on the number of liquor stores in the state.

On an 8-3 vote, a Senate committee signed off on Senate Bill 110, a measure sponsored by Senate President Pro Tempore Jimmy Higdon, that would stop Gov. Matt Bevin’s administration from eliminating the state’s liquor license quota system.

The measure now goes to the full Senate, though two other prominent Republicans voiced opposition to the bill Tuesday during the committee meeting. Senate Majority Leader Damon Thayer, R-Georgetown, and the chairman of the committee that heard the bill, Republican John Schickel of Union, said they oppose the measure.

Higdon, R-Lebanon, said his bill would write into law existing state regulations that limit the number of licenses available for retail package liquor stores and by-the-drink sales of liquor.

The Kentucky Alcoholic Beverage Control Board has filed proposed administrative regulations that would repeal those rules.

Under the current system, the number of liquor licenses is limited based on the population of a given community — one license per 2,300 people for package stores and one license per 2,500 for drink sales.

An impact statement done for the ABC Board said market forces rather than arbitrary quotas should determine the number of businesses competing in a community.

Higdon argued that ending the quota system would hurt existing liquor businesses and betray voters who approved alcohol sales with the understanding that the number of stores would be limited.

State Malt Beverage Administrator Carol Beth Martin told the Senate Licensing, Occupations and Administrative Regulations Committee that SB 110 “will create a special protected class of businesses who are free from competition.”

Martin said she was speaking not only on behalf of the ABC Board, “but also for all of the business owners who didn’t get chosen for a license — not because of a deficient application but because there were simply not enough licenses available for each of the good applications.”

“SB 110 does not help with the regulation of alcohol, it merely provides protection and a monopoly to a select sector of the alcohol industry in select areas of the state,” she said. “It is not the role of government to pick winners and losers in the market place.”

The only other witness testifying against Higdon’s bill was J.D. Chaney, executive director of the Kentucky League of Cities.

Several liquor store owners said they supported the bill.

Colby Slusher, a liquor dealer in Pineville and the Bell County circuit court clerk, said any change in liquor licenses should be made by the legislature and not a three-person board.

Jim Clontz, director of missions for the South District Baptist Association in Danville, said allowing more liquor stores would increase crime.

This story was originally published February 13, 2018 at 2:33 PM with the headline "Liquor dealers win first round against Bevin Administration in liquor license fight."