Some Iowa stores have been rushing to sell their inventory of high-alcohol-content beer before noon today.
At 11:30 the governor will sign legislation that changes the state’s beer distribution system. Lynn Walding, administrator of the state’s Alcoholic Beverages Division, says it means that starting at about noon, bars and restaurants will be able to buy higher “proof” beer directly from distributors. It was a change made to help micro-breweries in Iowa, but Walding says both retailers and the state have been scrambling to unload a product with a very limited shelf life.
“Effective upon the governor’s signature, the state will no longer be actually selling the product, so we’ll have to cease at that point,” Walding says. “We have already turned back the inbound shipments that were scheduled to come into our warehouse.”
Most bills signed into law by the governor take effect on July 1st, but this section of a government reorganization bill takes effect immediately. As of last night, 20 pallets of high-alcohol-content beer were sitting at the state warehouse in Ankeny. Doug Alberhasky, manager of John’s Grocery in Iowa City, says his store has been trying to get rid of over $60,000 of beer.
“Any kegs that we currently have, we’re not going to be able to sell once this goes through,” Alberhasky says, “so we’re going to have to have our distributors pick up over 340 kegs that we currently have that we’ve been wholesaling to the bars and restaurants.”
Average domestic beer goes straight from the distributor, like Anheiser Busch, to a neighborhood bar, but beer with a higher alcoholic content had to be warehoused by the state and sold through a retailer, like John’s Grocery in Iowa City. “Since we’ve been wholesaling to the bars and restaurants for a number of years, there is a very substantial part of my business that is going to go away,” Alberhasky says.
Like most beer, the high-alcohol-content beer has a short shelf life, so decisions about the brew must be made quickly. Walding, the head of the state’s Alcoholic Beverages Division, expects some distributors will take the product back from stores like the one in Iowa City. Representative Vicki Lensing of Iowa City says she wishes she’d known the headaches that are being caused by making this change immediately.
“This has been in the works and in discussion for so many years that when it happened we just thought the sooner we could get it in place, the better and also, because there were new licenses and fees that go along with it, it was revenue coming into the state so it all just kind of made sense,” Lensing says. “And so I’m sorry if it causing some inconvenience, but that wasn’t really brought to our attention.”
While the rush is making the transition difficult, both regulators and retailers agree getting the state out of the business of distributing high-alcohol-content beer will be better for customers because the beer will be fresher without that “middle-man” stop at the state warehouse.