Legislative Update
Nicole Gehl reported on the legislative highlights for the session
as detailed in the Commission packet. Both the alcohol and tobacco
appropriations remained status quo.
The biggest issue the division faced this legislative session,
according to Ms. Gehl, was the liquor privatization bill. A bill
was introduced to take the state completely out of the business.
In the final version the bill was changed from privatizing the division
to issuing an RFP to contract warehouse services. The legislature
provided guidance on how the division is to proceed.
Mr. Walding reported there was an amendment drafted, but not introduced,
that would have abolished the 3-tier system. The bill would have
allowed the direct shipment of alcohol to retailers.
A native wine bill was passed transferring 5% of the gross wine
sale revenues monthly to the grape and wine development fund. It
is questionable whether this bill will stand due to a direct shipment
case regarding preferential treatment to native wineries.
HF 275 changed the criminal violation for youth alcohol possession
to a simple misdemeanor punishable as a scheduled violation with
increased fines. In addition to a $500 fine a second offense requires
the completion of a substance abuse evaluation or the suspension
of the individual’s driver’s license for a period of
one year. Third and subsequent offenses result in fines of $500
and the suspension of driving privileges for a period not to exceed
one year. Ms. Gehl stated the cost of the substance abuse evaluation
is born by the youth offender. Commissioner Clayton commented that
the Iowa City Council adopted the language into their local code,
thereby allowing the local municipality to file the charges and
to retain the major source of revenue generated by these offenses.
Commissioner Doll commented that the fines are supposed to be a
deterrent not a revenue maker. Commissioner Clayton responded that
the increased fine is irrelevant to some students; however, the
advantage to the city is the ability to go to the second offense.
Ms. Gehl expanded on the OWI Testing bill and the Bouncer Training
bill as outlined in the Commission packet.
Additional alcohol bills that were introduced but did not pass
the session were: 1) a bill to change the fee structure of Class
C beer permits and 2) a bill to allow a vintner to produce distilled
spirits and sell the product from his establishment without paying
dram shop insurance or taxes.
Another main piece of legislation affecting the division was the
Hookah bill which creates a retail tobacco permit for retailers
selling tobacco products but not cigarettes. The fee structure is
the same as the current retail cigarette permit.
Ms. Gehl briefly explained HF 646 regarding raffles; HF 645 regarding
the lottery; and HF 881 regarding salaries. The Charter agency bill
(HF 837) dealt primarily with noncontroversial items. It extends
the period in which a charter agency is exempt from across-the-board
budget cuts from June 30, 2005 to June 30, 2006.
Tobacco Enforcement
Gary Marker reported that 5,450 compliance checks were completed
in FY 05 with 4,702 retailers in compliance. This translates to
almost 90% compliance.
Lynn Walding reported that Representative Kevin McCarthy contacted
him during the legislative session regarding constituent complaints
from retailers that there were not enough tobacco training sessions
offered. Consequently, contracts for FY06 will require all 225 partners
to offer educational training once a month resulting in approximately
2,700 scheduled educational opportunities during the year. Registration
for classes will close seven days prior to the session at which
time the ABD staff will send an e-mail with a list of registrants
to the trainer. If no one registers for the session, the class will
be canceled.
Mr. Marker stated that the classes are free to the retailer with
all literature provided by the Iowa Alcoholic Beverages Division.
Mr. Walding added that the classes are self-funded with money derived
from the civil penalty fines charged to tobacco retailers. Instructors
are paid $100 for a two hour session and the classes are usually
held in facilities that do not charge a room rental.
Ms. Gehl added that the division works with the large chains to
offer classes in their area at a time and date that is convenience
for the retailer. As a result over 4,000 clerks have been trained.
In response to Commissioner Doll’s observation that collections
of civil penalties had decreased by $95,000 the past fiscal year,
Gary Marker explained that infractions continue to be about the
same; however, due to the increased penalties local authorities
are now prosecuting several of the cases. If the local authority
does not choose to prosecute within 60 days, the case automatically
reverts to the state for prosecution and the civil penalty money
is retained by the state.
The Iowa Alcoholic Beverages Division will again sponsor the Iowa
State Patrol to hire additional officers to look for tobacco violations
at the Iowa State Fair. Tickets written during the 10-day fair have
declined over the four-year sponsored period from 100 tickets written
the first year to 55 tickets written last year. The four retailers
who sell tobacco products at the fair are also checked.
When asked if the compliance checks have resulted in a decrease
in the number of tobacco retailers, Gary Marker replied that although
some retailers have chosen to give up their tobacco permits, the
number stays constant due to new retailers purchasing permits. Commissioner
Collins expressed her support of a cigarette tax increase. Mr. Walding
stated the division takes the same position as the Governor who
supported a tax increase; however, it did not get through the legislature.
Electronic Licensing Update
Staff training is scheduled for July 26th and dual system testing
will begin August 1st according to Karen Freund. Pilot group training
in the metro area and surrounding counties will begin on August
15th with the pilot system going live on August 23rd. When the pilot
system goes live, the old system will no longer be used. New licenses
not in the pilot group will be input into the new system by ABD
personnel and Information Technology (IT) will create the imaging.
Paperless documents will automatically get into the file without
being physically scanned. Both new and renewal licenses will be
issued electronically. Everything will be done via e-mail. The public
will be able to get the information needed without calling Iowa
ABD. Electronic signatures are denoted by a check mark which is
the standard in the industry.
Insurance carriers registered to write dram shop insurance in Iowa
will be sent a registered letter with their personal access code
so only they can access the information. The carrier will notify
ABD by e-mail to add or delete personal access codes when personnel
changes occur. After the insurance carrier verifies the licensee
has dram shop insurance and the insurance is in effect, the carrier
hits “submit” and the license is ready for local or
state authority approval. In response to Commissioner Doll’s
query, Ms. Freund stated that although it does happen, the division
rarely closes a business for lack of dram shop insurance. Insurance
companies give a 30-day cancellation notice and the division monitors
that by sending notices to the licensee. Of the four or five establishments
closed during a year, the licensee usually pays and is reopen for
business within a day or two.
Directions for e-licensing are currently only available in English;
however, funding is being sought to write directions in Spanish
and possibly Bosnian. Mr. Walding added that most computers will
automatically translate when the computer is set to another language
such as Spanish.
The second phase of this charter agency project is to make electronic
licensing mandatory. The pilot project will gauge response to the
program. Part of the project also requires the use of electronic
funds transfers (EFT) to pay for the liquor license.
Mr. Walding reported that the division received a grant of $100,000
for IT needs. State-of-the-art computers with large screens allowing
two documents to appear simultaneously were purchased for all ABD
office personnel.
Counsel’s Report
The same types of violations continue to appear on the report.
Mr. Walding commented that there is no longer a backlog of Iowa
City cases; therefore, the report is shorter. Commissioner Clayton
added that the Iowa City Police Department’s tight budget
has resulted in less compliance checks.
John Lundquist reported that a recent Court of Appeals decision
concerning Tony’s Tap in Duncombe, Iowa was favorable to the
division. The owner of the bar initially applied for a license and
in subsequent applications failed to accurately disclose his criminal
history. The Court of Appeals upheld the Division’s authority
to deny the license on the basis of the licensee providing false
information relating to criminal history on the application.
Mr. Lundquist commented that the appeal hearing listed on the report
for Johnson Brothers concerns a tax report in which the corresponding
payment arrived in the mail two days late. The statute imposes a
10% penalty for late payments. The question being discussed amicably
is whether the 10% penalty is mandatory and if not, what the appropriate
compromise solution should be.
Commissioner Collins commented that the report shows a high number
of under-age drinkers’ violations and few cases for intoxicated
persons. Mr. Lundquist responded that it is difficult to make a
charge stick for “serving anyone who is intoxicated or appears
intoxicated.” The officer must observe the bartender serving
and the patron drinking the beer at that particular establishment;
otherwise, the defense claims that the patron arrived at the bar
already intoxicated. In addition, a patron may not be exhibiting
outward signs of intoxication when he arrives at the bar and orders
his first drink; however, he begins to show the effects after he
is served. The bartender needs some basis to believe the person
is intoxicated which can be established by the number of drinks
served by the bartender or by the outward appearance of the individual.
Commissioner Collins asked if there is any recourse for a citizen
in a bar to tell the bartender he shouldn’t be serving an
obviously intoxicated individual. According to Mr. Lundquist, the
statute does impose an affirmative duty on the licensee and by extension
their employees not to serve, so if they continue to serve this
person they are, in fact, breaking the law. It is both a civil and
a criminal offense and Mr. Lundquist sees no problem in pointing
that out to the bartender.
In response to a question by Commissioner Doll, Lynn Walding stated
that in the past if a convenience store chain had one store revoked
as a result of continuing service to minors, the chain would have
lost every license in the state. The division worked with the retail
associations to get the law changed. If the licensee at a specific
location sells to the point where there are four sales to minors
within the past three years, that location’s license is revoked;
however, the revocation does not affect the ability of the corporation
to hold licenses at other locations. Under statute, according to
Mr. Lundquist, if a location or license is revoked, the person or
corporation that holds the license is eligible to apply for a new
license after a 2-year period. The location itself is not licensable
by anybody for one year.
Iowa Liquor Monthly
The publishing company in Laurens, Iowa that printed the monthly
liquor price books recently went out of business. The Division partnered
with the Department of Administrative Services Printing Division
to continue production of the popular book used by Class E licensees
to order their liquor. Brent Saron assembles the price file and
DAS procures advertisements to offset the print cost. The book continues
to be distributed free to Class E licensees. Mr. Saron also assembles
the price file for the Iowa Liquor Quarterly. He has established
a timeline that synchronizes the Iowa Liquor Quarterly, the Iowa
Liquor Monthly and the ABD Newsletter so the brokers know the deadlines
for each publication. Brokers must notify the division of any specials
approximately 45 days prior to publication. Mr. Walding recognized
Mr. Saron’s diligent work on the project. The first issue
was done in less than two weeks resulting in no missed issues during
the transition.
Financial Report
FY 05 Financial Highlights
The financial highlights in the Commission booklet reflect July
through May figures. Liquor sales through May were up $11.7 million.
At the end of June, sales were approximately $146.8 million for
the year representing an increase of $13 million over last fiscal
year. While beer taxes were down, wine tax increased by 6% through
May.
Total revenue through May was up about $12.5 million, an increase
of about 8.3% over last year. Expenses increased approximately 9.7%.
FY04 warehouse operations figures reflect what was actually paid
to J. A. Jones Company through May, 2004. If Jones had continued
to run the warehouse operations in FY05, the figures would have
been considerably higher because of the volume increase, as well
as the price increase of approximately 10¢ a case.
The warehouse operation figures on the report can be misleading
when comparing FY05 to FY04 according to Jim Kuhlman. The $2.2 million
figure is what was actually paid to J. A. Jones Company last fiscal
year through May. What the figures do not reflect is that if J.
A. Jones were still doing the warehouse operation, ABD would have
paid them considerably more because of the volume increase. In addition,
the price would have gone up this year about 10¢ a case.
Overall, the assumption of the warehouse duties by the division
has been highly successful financially. The division is on target
to save the $750,000 projected savings. ABD is in the process of
validating that savings by issuing an RFP and getting proposals
from private sector companies to do the warehouse operations. If
a private company can do the job at a significantly lower price,
the division will contract the warehouse again.
The division expects to revert approximately $200,000 to the General
Fund, about one-half of which will be returned to the division as
a Charter Agency. Although the Charter Agency gives the administrator
the authority to hire at will, three positions have been left vacant
during the last year which contributed to the reversion amount.
Liquor Sales – Wine and Beer Taxes
Dollar sales of liquor have climbed dramatically over the last several
years and volume sales have increased the past two years. Wine taxes
have also continued upward for several years. Beer tax collections
were down for FY05. The report shows only 11 months for FY05.
FY05 General Fund Transfers
Last fiscal year approximately $48.7 million was transferred directly
to the General Fund with an additional $9.3 million transferred
for substance abuse treatment. An additional $13 million in beer
taxes was transferred to the State Treasurer as well as miscellaneous
money to the cities. Through June of this year, $50 million has
been transferred to the General Fund. A final transfer can be made
after all sales and expenses are finalized.
Lynn Walding reported that the division topped the $1 billion mark
with the May 20th transfer to the General Fund. The division generated
the revenue contribution in a span of less than 18 years –
from June 1987 when the last state liquor store closed until May
20, 2005. If revenues continue to increase at the present rate,
the division will reach its second billion dollar mark in 2012.
Sales Report
Sales Comparison
Sales increased 9.7% to $146.8 million for the year. Volume was
up nearly 7% illustrating that the increase is primarily driven
by an increase in gallon sales.
Product Buyouts
The division continues to participate in the monthly buyout program
purchasing a 60-day supply of discounted product on the last day
of each month. Additional profits generated by the buyout program
through May of this fiscal year totaled over $882,000. Of that amount,
$224,000 was due to more aggressive buying to meet one of the Charter
Agency goals.
In response to Commissioner Doll’s query, Mr. Kuhlman stated
that Captain Morgan is the number one single-size product seller
in the state constituting about 4.3% of total sales. The number
one seller of all sizes combined is Black Velvet with approximately
7 – 8% of total sales.
Direct Shipping
The Supreme Court recently issued a decision on the Grandholm case
which looked at New York and Michigan’s wine laws that prohibited
out-of-state shippers from shipping wine into their respective states.
The small wineries across the country wanted to open the market
and be able to direct ship into those states. The Court looked at
the Commerce Clause of the United States Constitution and determined
that although the state could set policy, it could not do it in
a discriminatory fashion. Immediately, most wineries celebrated
thinking they could ship wine anywhere in the country; however,
many attorneys do not interpret the decision in that way. Administrator
Walding’s conclusions regarding the decision are: 1) states
still control the regulation of alcohol under the 21st Amendment
(the Iowa legislature still determines the alcohol policy for this
state); and 2) states can regulate; however, they cannot do it in
a discriminatory fashion. Unfortunately, the Grandholm case poses
more questions than it answers according to Walding.
Iowa is one of 13 reciprocity states meaning that as long as a
state allows Iowa to ship into their state, that state can ship
into Iowa. Out-of-state wine shippers have a competitive advantage
because there is no $1.75 gallonage tax levied on wine shipments
into Iowa; however, if an Iowa retailer sells the wine, the $1.75
gallonage tax is levied on the product. Therefore, Iowa cannot allow
Iowa wineries to ship and sell to consumers and prohibit a winery
in another state from doing it also. The Michigan, Indiana and Illinois
legislatures are considering banning the shipment of wine into their
state by prohibiting it for anybody. There would be no special privileges
for their in-state wineries.
There are also implications for the beer and spirits industries.
Brew pubs in Iowa are exempted from the 3-tier system and are allowed
to sell their product directly to consumers. This rule may erode
the 3-tier system allowing everyone to sell directly. The beer wholesalers
are looking at the statutes to see what discriminatory statutes
are on the books.
As a result of the Grandholm decision, SF395 which passed this
session could be impacted. The wine bill provides for a portion
of the $1.75 gallonage tax on any wine sold in Iowa, including California
wine, to be transferred to the Iowa Wine Growers Development Fund.
There is also an Iowa law that allows Iowa wineries to sell at retail
even though out-of-state wineries cannot. The legislature may want
to look at that issue before it is challenged. Someone could argue
that Iowa’s reciprocity law and any other state’s reciprocity
law is unconstitutional. Kathleen Sullivan who represented the Wine
Institute in the Supreme Court oral argument admitted that in her
oral argument. The Wine Institute has suggested working with the
division and the legislature to establish a regulatory environment
for wine that would tax, regulate and license wine but still allow
direct shipments into Iowa. In part, the Wine Institute wants to
do this because they know Iowa’s existing law won’t
stand. Mr. Walding’s opinion is that, technically, Iowa’s
direct shipment law is probably unconstitutional; however, he would
not recommend changing the practice until someone threatens to challenge.
Chuck McGrigg who represents the central states for The Wine Institute
told Mr. Walding that now that the Supreme Court has issued a decision,
the Wine Institute will look at individual state laws and challenge
those laws where discrimination exists. The Wine Institute represents
both large and small players. The Institute supported the Supreme
Court decision and argued on the side of direct shipping.
Mr. Walding recently discussed a bill with Representative Davitt
that was introduced this session allowing a distillery to distill
and sell on property, pay no tax or license fees and be subjected
to no regulation. The law would have been discriminatory, clearly
favoring an Iowa business. If passed, Iowa would have had to extend
the same benefit to out-of-state shippers wanting to ship into Iowa.
The gentleman in Iowa City was trying to create economic development
by establishing a business similar to brew pubs and distilleries;
however, what he’s trying to do could have potential consequences
for liquor and beer.
Another gentleman is trying to legally re-create a former bootleg
operation called Templeton Rye. He is attempting to sell directly
to the public through a license structure. The concern is how it
affects the state distribution system and whether it opens the door
for anyone, including retailers, to ship into Iowa.
The 3 tier system is under challenge according to Walding. The
Costco lawsuit attacking the 3 tier system in the state of Washington
is proceeding through court. Although the Costco case holds that
states can regulate alcohol, the question becomes how the commerce
clause affects that. Policy makers need to examine Iowa’s
laws to determine what is discriminatory. Based on the proof and
the lost revenue potential, selling alcohol over the Internet may
be a whole different thing than selling beer and wine on the Internet.
John Lundquist echoed Mr. Walding’s comments regarding the
Supreme Court decision. Mr. Lundquist opined the state’s ability
to maintain monopoly control over the distribution of liquor is
not an issue and probably will not be subject to challenge based
on the extraordinary powers the state’s have under the 21st
Amendment which eliminated Prohibition and granted states the authority
to regulate the distribution of alcoholic beverages. At the same
time, Mr. Lundquist is confident that the 3-tier system is safe
for the time being. What the case does hold is that state’s
are still subject to the Commerce clause, which more or less states
that you can’t discriminate against out-of-state industries
or entities to their detriment and the benefit of an in-state entity;
therefore, if the division offers a $25 license to an in-state winery,
the division should offer the same privilege at the same price to
an out-of-state winery. A number of laws in the State of Iowa need
to be reevaluated in light of this decision. Mr. Lundquist pointed
out that this was a 5-4 decision in the US Supreme Court. He also
noted that Justice O’Connor was in the dissent so there will
not be a change in this case in the near future.
Commissioner Doll commented the 3-tier system in its simplest form,
requires wholesalers to treat all retailers the same by federal
statute and now the states will also have to treat the wineries
and the breweries the same. Lynn Walding responded that while that
is true, most states have laws on their books that do not treat
everybody the same. Brew pubs are an example of an exception to
the 3-tier system.
The division has been a strong supporter of the Iowa Wine Group
and actively worked with them to create those political advantages
to help them get started. Walding stated it would be difficult to
tell them now that these advantages may create problems for other
parts of the economy. Every state supports economic development
in general; however, what’s unknown is the potential impact
it may have on other sectors of the state economy and what lost
jobs it could mean.
A bill was introduced last year with a clause directing the division
to charge more for delivery to retailers further away from Des Moines.
Had the bill passed, it would have been very unpopular. When Pat
Cavanaugh was the ABD administrator he argued prices should be cheaper
in Iowa’s border counties because people living there could
purchase liquor cheaper in the bordering states. There was some
logic in his argument; however, the Iowa Constitution got in the
way.
Warehouse RFP Update
The legislature passed a bill requiring the division to prepare
an RFP for the warehouse operation and to have a successor provided
by December 31, 2005. ABD has worked with the Department of Administrative
Services and the Attorney General’s Office in preparing the
RFP. According to Mr. Walding the RFP should be ready for distribution
in late August. There are currently 10 – 12 Iowa and out of
state companies on the bidders list, some of whom had connections
with the J. A. Jones Company.
The RFP will have 3 different components: 1) bid on transportation
only; 2) bid on the warehouse only; or 3) bid on the whole operation
including the warehouse and transportation. All bidders will be
required to attend a site visit or the bidder’s conference.
As a bidder, the ABD is allowed to keep its numbers confidential.
The Department of Administrative Services will issue the RFP, oversee
the opening of the bids, assemble a committee to review the bids
and make the award decision. The Iowa ABD is a bidder competing
with the private sector and as such will not be included in the
decision-making process.
The legislature required that the division view the operation as
if the division used only full-time state positions so the advantage
the state has with in-mate labor will be neutralized. In addition,
the Iowa ABD is exempt from paying state and federal taxes on diesel
fuel. As it was with the J. A. Jones Company, should a private contractor
win the bid, the company will be granted the exemption as an agent
doing state work.
Warehouse operations were streamlined during the past year by redoing
the truck routes, minimizing the number of miles driven and minimizing
the number of people working in the warehouse. Truck drivers are
paid the fair market rate and warehouse workers are paid union wages.
The ABD bid will show the division’s true costs to operate
the transportation and warehouse operations.
Lynn Walding pointed out that the state did the warehouse and trucking
operation until 1991 when it was decided that privatizing the warehouse
operation would save the state money. The J. A. Jones Company won
the bid and operated the warehouse until May 2004 when they declared
bankruptcy and the division resumed the warehouse and transportation
operation. The division has already saved $750,000 by resuming the
operations. If a private company can run the operation for less
money than the Iowa ABD the state will continue to realize a savings.
There is concern that a private company will underbid, do minimal
work and try to renegotiate the contract. The company who took over
the J. A. Jones Company contract in North Carolina immediately went
to the liquor director stating they could not keep employees paying
an $8 an hour wage. The contract was renegotiated for an additional
$300,000 with the North Carolina ABD agreeing to pay an additional
$4 per hour wage as well as buying the company new trucks. That
same company wanted to buy out the Jones’ Iowa contract; however,
the Iowa ABD bought the Jones assets in the bankruptcy. The J. A.
Jones Company originally underbid in 1991 and spent 2 – 3
years trying to get concessions from the state. The Jones Company
was eventually able to get some increases in the annual price adjustments
in the contract and during the renewal periods. There is concern
a new company would do the same thing, declare bankruptcy and the
state would be back in the business again. If a private company
is awarded the bid, the Iowa ABD will need to make sure they perform
as agreed upon in the contract.
Holiday Show
Suppliers will showcase their holiday gift set items at the Holiday
Show which will be held at the Marriott in West Des Moines on August
21st and 22nd. Deliveries will take place in late September and
October affording retailers the opportunity to have their product
well in advance of the holiday crunch. Typically, only about one-fourth
of the retailers attend the show.
Taxicab Ad Campaign
Commissioner Collins was approached by Randy Sackett of Trans Iowa
about working with the Iowa Alcoholic Beverages Commission and local
distributors to develop a public service campaign aimed at responsible
consumption and use of alcoholic beverages. Mr. Sackett is seeking
funding to place advertising on the back of 25 taxicabs. The cost
would involve a one-time set-up fee of $100 per cab for artwork
and materials in addition to monthly advertising costs of $100.
The total set-up cost for a one-year campaign would be $32,500.
Commissioner Collins did not receive a definitive answer when she
asked Mr. Sackett how much money the taxi cabs would contribute
to the project and how much money they would make from the venture.
When asked if the beer wholesalers have done any advertising on
taxis in the past, Commissioner Doll replied that Doll Distributing
sponsors a cab ride home in Council Bluffs every holiday. Doll Distributing
puts posters in the bars stating “This holiday season, please
call a cab. It’s free to you wherever you want to go.”
Doll Distributing pays the cab; they do not pay for advertising.
When Commissioner Collins suggested cab drivers charge underage
drinkers half the cab fare, Mr. Walding responded that it is a catch-22
situation for the industry. While no-one wants underage, nor any
age, drunken drivers on the roads, it is against the law to serve
to underage drinkers or to serve a person who is already intoxicated.
Advertising on the cabs could be construed as sending a message
that it is okay to drink to the point of intoxication as long as
the person doesn’t drive. That is not the case. Underage drinking
is a problem and adults are ignoring reality when they pretend it
is not happening. Walding commented it is particularly troublesome
when alcohol, unfamiliarity with the potential of alcoholism and
new driving skills are mixed.
Commissioner Clayton relayed that the University of Iowa recently
gave a company permission to distribute brochures and place posters
on campus for an evaluation program parents can purchase for their
students. The on-line program takes the student approximately 20
minutes to complete and provides the student and parents individualized
feedback. In addition the company asked for the opportunity to sell
parents a credit card system providing their child with an unlimited
number of cab rides home from the bars. The University denied their
request for the credit card system. In addition to sending an enabling
message, the University runs the risk of being sued if it provides
transportation for drunken students.
Young soldiers’ serving in the Iraq and Afghanistan wars
has brought the issue of the legal drinking age to the forefront
again according to Lynn Walding. A bill has been submitted in the
Wisconsin legislature to allow 18 and 19 year old individuals who
have served in the military the right to drink legally.
New Business
Lynn Walding announced a July 26th meeting will be held with members
of the beer industry to discuss CO2 filters. CO2 filters are put
in the tap machines to filter out the gasses from the CO2 tank used
to clean the lines as well as food or other impurities. Anheuser-Busch
wants to provide the CO2 filters at no cost to all their retailers
while Miller Brewing Company opposes the use of the filters. According
to state statute the wholesaler cannot give any equipment or fixtures
to a retailer; however, the division’s Administrative Rules
exempt equipment to exclude anything like tapping devices or devices
to clean the lines. The meeting will address whether the rule should
be expanded to include the CO2 filters. The Nebraska liquor administrator
has prohibited the use of the filters in his state unless the filters
are paid for by the retailer.
Riverboat and gaming industry members met with ABD staff in February
regarding their liquor licenses. DNR laws are changing to allow
the riverboats to be permanently moored and the group wants to have
one license that covers all the property rather than the current
practice which requires a boat license and an on-premises license.
Current law prohibits customers from carrying a drink from the boat
to the hotel. The industry members contend that a permanently moored
boat is land-based and the hotel and boat should be treated as one
property. The downside to this, according to Walding, is that if
they get caught with a violation it impacts the whole property.
A decision will be made soon and notification letters will be mailed.
Election of Officers
| |
Motion: |
Commissioner Hunter nominated Dick Stoffer
as Chairperson, Mary Hunter as Vice-Chairperson and Scott Doll
as Secretary. Commissioner Clayton seconded the motion. The
officers were elected by unanimous vote.
|
Other Business
Commissioner Stoffer relayed that he had received a complaint from
a retailer who said that he did not get his delivery the week before
the July 4th holiday due to the warehouse being closed for inventory.
All 480 Class E licensees had the opportunity to order and get their
order delivered before the holiday according to Mr. Kuhlman. Mr.
Kuhlman replied that the division was closed on Friday, July 1st
for inventory and licensees could not utilize will call that day;
however, every licensee received a delivery the week before the
4th. The law mandates that the division must do a yearly inventory
as of June 30th. If the inventory is done earlier, all the files
must be frozen as of that date and carried forward in the reconciliation
process as if the inventory was conducted on June 30.
In addition to the warehouse, the division is using inmate labor
to do lawn work. Two former inmates are now working for the Division.
Iowa is one of 4 pilot states in the Responsible Retailing Forum
led by Dr. Krevor of Brandeis University. In discussions with Dr.
Krevor, Mr. Walding expressed his view that the underage drinking
issue eclipses and hides the real problem which is intoxication.
As a result of those discussions, Dr. Krevor is conducting a study
regarding the issue. The study is based on an exercise done in New
Mexico where actors from the University went into bars and acted
drunk and were, without exception, served. Derek Lippincott was
one of two individuals from the Iowa Alcoholic Beverages Division
who attended the training through the Responsible Retailing Forum
in Kansas City. Actors were hired to teach the trainees how to convincingly
act extremely drunk. The trainees will be sent to off-premises locations
where they will simulate drunkenness to see if the retailer will
still sell alcoholic beverages to them. If the retailer sells the
alcoholic beverage, the trainee will fill out paperwork about the
establishment and send it to Dr. Krevor. No legal action will be
taken; however, the retailer will know that they are being watched.
Unfortunately, retailers and bar-owners tend to think there is not
a problem with over-serving as long as the intoxicated individual
gets a ride home.
Upcoming Meetings
The next commission meeting will be held in September; date and
time to be announced later.
Adjournment
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