Wednesday, January 11, 2012

Independent DABC Committee Taps a Keg of Bar-Owner Frustration

Posted By on January 11, 2012, 8:30 AM

For nearly two hours, frustrated citizens, bar owners and bartenders sidled up to the microphone at the hearing of the DABC Review Committee to tip the independent committee with advice on how to fix the booze business in Utah.---

“Stop micromanaging this industry,” said David Morris, owner of the Piper Down Pub in Salt Lake City. “Tell the people on the Hill that I make a better drink than they do.”

It was a sentiment that received raucous applause and laughter at the forum, which overwhelmingly hosted views from the public who were in favor of loosening Utah’s strict liquor laws -- from fewer bar regulations and more liquor licenses to privatizing the sale of alcohol in the state.

The unique committee -- tasked by Sen. Ross Romero, D-Salt Lake City, and Rep. David Litvack, D-Salt Lake City, and filled by nine members largely representing small business owners -- was collecting public comment for the creation of a report to present to the upcoming Legislature convening later this month. The committee was chaired by retired U.S. Army Major General and CEO Peter Cooke along with former Salt Lake County Auditor Jeff Hatch, and allowed members of the crowd of more than 75 attendees to offer advice, criticism and information.

For many, it was a crash course on the intricacies of Utah liquor law.

“I pay almost a 95 percent tax on my product,” Morris said. “I also pay retail price -- I don’t get a wholesale discount. I spent $200,000 with the DABC last year and I paid the same price as a hobo walking in [a liquor store] buying a pint.”

Multiple owners questioned the Legislature’s increasing push for restaurants with liquor licenses to keep their sales at 70 percent food and 30 percent liquor. Many saw the technical accounting and planning that goes into that juggling act as too burdensome for small-business owners. Dennis Chambers, owner of the Tap Room bar in Salt Lake City, speaking on behalf of restaurant-owning colleagues said, “You can buy a $100 bottle of wine, but it’s pretty hard to find a $100 pasta dish.”

Other speakers blasted the infamous “Zion Curtain,” the glass partition or other obstruction required of new restaurants and beer bars. While the curtains dropped on unlucky bar owners in 2009, Blanca Gohary, owner of the Park City restaurant Instant Karma, says she had a beer-only license in 2006 while she waited to receive a full-liquor license.

She got the full license in 2011 but wasn’t grandfathered as an exception to the rule. “It really doesn’t make sense,” Gohary said of the “curtain”. “I don’t understand why I can’t dispense liquor in front of the public, but if someone orders a bottle of wine, you are [serving] table side and that is, in fact, dispensing in public.”

As a benefactor of Park City’s booming tourist season, she also suggested that the liquor license quota system, which currently awards liquor licenses based on population, doesn’t make sense for a resort town that sees large population increases during the winter season.

Jonathan Springmeyer, a consultant with Bonneville Research, used the opportunity to share some sobering news with the committee and the few legislators in attendance.

His firm had developed a business plan for the DABC in July 2011 and wrapped up their research late last year. Springmeyer said that a number of state liquor stores were built during 2007 and 2008 and were financed through bonds. Springmeyer believes that if the Legislature attempts to close stores in the next session, the DABC won’t be able to recoup the bond money and the cost will come out of the state’s budget. “Every single store in the state is profitable,” Springmeyer said, earning a minimum $250,000 in profit a year. That being said, he challenged the idea Legislators touted last year that if a store were closed down, nearby stores would pick up the business.

“I don’t believe …” Springmeyer said, before pausing mid-sentence. “Let me put it this way: I could not duplicate their findings.”

Springmeyer added that it already doesn’t make sense to close the stores since all the stores in the state perform very well and bring $60 million to state coffers every year. “Closing stores down at this point could be a very, very dangerous proposition for the state,” Springmeyer said.

The committee collected numerous comments from members of the public and asked that more Utahns send comments and suggestions to the committee via email at ReviewDABC@gmail.com.

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