Utah’s 3.2 beer market could chill as other states enact more lenient laws

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

OKLAHOMA CITY (AP) — Beer snobs are raising their mugs to a stronger brew in three states that once forbade grocers from selling anything but low-alcohol brands, and the changes could indirectly chill the industry in Utah and one other state, the only remaining markets where such regulations remain.

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

Until October, Oklahoma grocery and convenience stores could stock beer with only up to 3.2 percent alcohol content — considerably lower than even leading light beer brands. Liquor stores were able to sell stronger 8.99 percent beer but were prohibited from selling cold beer of any strength.

Voter-approved changes now allow stronger ales to be sold in Oklahoma grocery and convenience stores. And many of the changes are being adopted this year in the adjoining states of Colorado and Kansas.

The beer revolution will leave just two states — Utah and Minnesota — where only 3.2 percent beer may be sold in grocery and convenience stores. Beer industry observers say how lawmakers in those states react to the changes could determine whether the future of low-point beer in the U.S. is as flat as a week-old lager. Half of the nation’s 3.2 beer market was in Oklahoma and an additional 20 percent was in Colorado.

“It is a dramatic drop,” said Brett Robinson, president of Beer Distributors of Oklahoma, which represents some beer distributors in the state. “In Oklahoma, now beer is just beer. There is no more definition or classification.”

Oklahoma was the first of the nation’s five 3.2-beer states to make the switch, which represents a major shift for the state where alcohol was illegal until voters repealed statewide prohibition in 1959 — 26 years after Prohibition was repealed nationally.

“It was a long time coming,” said Lisette Barnes, president of the Oklahoma Beer Alliance, a beer industry trade association. “It’s refreshing. I think overwhelmingly people are excited about it. It’s been a good thing for both industry and consumers.”

Cans of spring seasonal Alpha Hive Double IPA are ready to be filled with beer at COOP Ale Works in Oklahoma City, Friday, Jan. 18, 2019. COOP Ale Works, which distributes in six states including Oklahoma and Kansas, has discontinued two of its three 3.2 percent brews. | Associated Press photo by Sue Ogrocki, St. George News

As the market for “baby beer” continues to shrink, brewers must decide whether it’s profitable to continue to make it — a decision that could cause low-point beer supplies to dry up in Utah and Minnesota.

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

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

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

“The only reason we produced those other two beers was to have beer in grocery and convenience stores,” said Sean Mossman, director of sales and marketing for COOP. “Now that we can sell our more popular styles in the grocery stores, we just don’t see any need to continue manufacturing those beers.”

And selling COOP’s flagship beers in grocery stores “has been a boon for us,” Mossman said. He said the brewer’s business has increased 50 percent in the months since Oklahoma grocers began stocking its stronger beers. New regulations go into effect in Kansas in April, when grocery and convenience stores can start selling beer with an alcoholic content of 6 percent.

Josh Yager transfers cans of F5, one of their most popular brews, from the production line at COOP Ale Works in Oklahoma City, Jan. 18, 2019 | Associated Press photo by Sue Ogrocki, St. George News

“Overall, we’re very happy about the death of 3.2 beer,” he said. “The death of 3.2 beer is good for us.”

Dwindling supplies of low-point brew is something state regulators have considered.

“That’s the question we’ve been facing for a couple of years.” said Terry Wood, director of communications for Utah’s Department of Alcoholic Beverage Control. “Business decisions may be made that make it just a financial choice for the breweries to stop producing 3.2 beer.”

For now, low-point beer will continue to be produced by the New Belgium Brewing Co., a craft brewery based in Fort Collins, Colorado, spokesman Bryan Simpson said. Production of 3.2 percent comprises just one-half of 1 percent of the brewery’s overall production, and the company will shop it exclusively to Utah, Simpson said.

“It makes sense for us to 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 sense to hit the brakes.”

Former Minnesota state Rep. Jenifer Loon, who authored legislation that repealed a longstanding ban on Sunday liquor sales in 2017, said regulatory changes in other states will likely force Minnesota lawmakers to consider allowing full-strength beer in grocery and convenience stores.

“The market’s probably going to control this. Within the foreseeable future, there probably will have to be a change,” Loon said.

Grocers have expressed support for selling strong beer in the past, but any effort to expand beer sales will probably be met with stiff opposition, she said.

“It’s been very difficult to kind of drag our liquor laws into the 21st century,” Loon said.

Written by TIM TALLEY, Associated Press.

Email: [email protected]

Twitter: @STGnews

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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  • DB January 19, 2019 at 4:09 pm

    Frankly, I can’t tell the difference between 3.2 and ‘regular’ beer. However, Utah may as well get with the 20th century (that was on purpose) before the breweries force them to do so.

  • homer498 January 19, 2019 at 5:38 pm

    Was there ever any tangible evidence proving 3.2 saved lives ? I spent five years bartending in 3.2 bars; I can guarantee you it never saved lives in those dives: because that was our (bartenders) job. Hell; when I worked in SLC I was almost killed by three WWF wrestlers drunk on 3,2’s.

    • Comment January 19, 2019 at 11:18 pm

      time to reduce it to 2.3?

  • NorthwesternWildcats January 19, 2019 at 8:45 pm

    Near beer is a joke. It’s ridiculous I have to overpay at the state run gestapo liquor store if I want full strength. Seriously like $14 for a 6 pack is absurd. I don’t even buy my booze from anywhere in Utah anymore. I go to mesquite buy a couple hundred bucks worth and put it back home and it last months. It’s worth it the time and money to do that as the hard liquor prices are half the price there. Just have to buy enough to make the trip worth it. I’m not an alcoholic but I like to imbibe occasionally and when I do im not going to overpay the state of Utah because of their antiquated religious beliefs regardless of the legality.

    • homer498 January 20, 2019 at 1:07 am

      Amen brother. Where did you say you live?

    • Mike P January 20, 2019 at 12:04 pm

      I’m right there with ya North. My few beer drinking buds and I make the run to Mesquite also and we all stock up. I also have a kegerator and order my kegs from Lee’s. This state really needs to get on board if for nothing else, the tax. Hopefully, someday the LDS will invest their billions in some of the Beer company’s so it will become legal here.

  • Utahguns January 19, 2019 at 8:58 pm

    I’d rate our legislature and lawmakers to be the same as our alcohol content…3.2%

  • ladybugavenger January 19, 2019 at 9:39 pm

    Since the law has taken affect here in Oklahoma, I have not heard one report of increased DUI’s. There is not mayhem and drunk drivers all over the road. Just saying in case Utah is scared to have regular beer. It will be ok.

  • KR567 January 20, 2019 at 12:15 am

    as far as Utah goes this will be changed only when the LDS leaders allows the politicians in Utah to change it…..and that’s just the way it is

  • Carpe Diem January 20, 2019 at 7:54 am

    Pacifico, not even that strong a beer, is over $2 PER BEER in the liquor store, and on sale, about $1 in Mesquite. The sales change, but the price discrepancy is the same, there is great beer at half the price just down the street. Please explain why you are charging outrageous prices? The State liquor store is also hugely profitable, and pays the lowest wages.

    Step into the ’90’s!

  • tazzman January 20, 2019 at 9:49 am

    3.2 beer just means people drink more to get drunk, not that they drink less overall.

    • homer498 January 20, 2019 at 10:16 am

      That always worked for me!

    • Mike P January 20, 2019 at 12:07 pm

      Believe it or not, not everyone drinks to get drunk. That’s something the young one’s do.

  • Real Life January 20, 2019 at 11:42 am

    The greedy Mormons that run the DABC will cave in. There is just too much money to be made.

  • Redbud January 20, 2019 at 6:38 pm

    What would it take to change the law here in Utan the 3.2 beer, would they have to put it on a ballot and have us all vote on it, or could they just pass a new law? Even though the state is controlled by a dominant religion, how close are they to actually be willing to get rid of the 3.2 law?

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