Iowa liquor laws being eyed through regulatory, development lenses

State to take another look at wines, beer, spirits regulations

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ANKENY — State regulators, policymakers and the alcoholic beverages industry are being asked to decide whether Iowa should order up another round of legal changes guiding the rules whereby wine, beer and spirits make their way to consumers.

Gov. Terry Branstad has enlisted Stephen Larson, administrator of the Iowa Alcoholic Beverages Division (ABD), and Debi Durham, director of the Iowa Economic Development Authority, to spearhead a working-group review with the goal of providing initial recommendations to him by next year from a comprehensive perspective.

The review panel has been asked to balance the needs of a rapidly expanding growth industry of “micro-enterprises” with state regulations and social concerns associated with alcohol consumption — some dating back to the post-Prohibition era.

“This will be at least a two-year journey,” Larson said last week during an interview at the ABD’s Ankeny warehouse, which is the hub of the state’s wholesale liquor distribution operation.

“It is not going to be something that we can accomplish in seven or eight months,” he noted. “But we clearly are going to bring forth recommendations, and the governor and Legislature will make decisions.”

In ordering the review, Branstad said he was concerned that laws first written in 1934 and revised since then may be creating barriers for small-scale distilleries, craft-beer breweries and wineries that are popping up around Iowa. Many of them are rehabilitating buildings in rural communities and giving them a much-needed economic boost.

Larson said there is room to clarify and remove outdated and redundant language in the Iowa code, streamline, consolidate or eliminate some state licenses and permits, as well as identify or address areas of the law impeding business growth in an era of new technology and e-commerce.

“Some of these standards that were set seven, eight, nine, 10 years ago was the marketplace of the past,” he said. “I don’t think our law is restricting opportunities. I think the law needs to be refreshed so we can allow businesses to be more successful but also to clarify things.”

Durham said the idea is to bring stakeholders to the table — including business owners and industry representatives and consumers as well as local, public safety and health officials — to openly discuss ways to modernize and “retrofit” the three-tier regulatory framework for manufacturers, distributors and retailers that make up Iowa’s spirits, wine and beer markets while maintaining the industry’s “delicate balance” and keeping the focus on public safety and public health concerns first and foremost.

“It is not our intention to implode the three-tier system, but at the same time we do need to challenge it in places where it creates a competitive disadvantage for our small manufacturers that are trying to grow in our state,” she said in an interview last week.

“We’re not going into with any preconceived ideas of what it should look like. We just know that these things need to be discussed and they need to be discussed in an open format,” she added. “I believe you need to deal with things systemically and with a holistic approach.”

Among the topics for consideration would be easing restrictions on “out-the-door products” by microbreweries that currently serve their products at on-premise establishments, or lifting production caps on distilleries and allowing them to sell their products at their venue sites. Larson said the concern is to make sure whatever changes are made do not create unintended consequences for the various industry sectors.

“What are the opportunities and what are the risks,” he said.

In 1987, Iowa policymakers eased control standards that ended the state-run liquor stores and led to the current 1,340 licensed alcoholic beverage distribution points. Larson said the review-panel discussions slated to begin this fall will not include removing the state as the wholesaler of spirits in Iowa.

Here are members of the alcohol laws review panel: Stephen Larson, Iowa Alcoholic Beverages Division administrator; Debi Durham, Iowa Economic Development Authority director; Jay Wilson, Alcoholic Beverages Commission chairman; Robert Fahr, chair of the Iowa Beer Wholesalers Association; Dave Ropte, president of the Iowa Brewers Guild; Cassie Bott, president of the Iowa Wine Growers Association; Garrett Burchett, member of the Iowa micro-distillery industry; Rick Przebieda, chair of the National Alcohol Beverage Control Association industry steering committee; Matt Johnson, chairman of the Iowa Restaurant Association board; Matt Hanlin, Independent retailer (Benz Beverage Depot) from Cedar Rapids; Jeff McGuiness, retailer (Wine Styles – Tasting Station); Roxann Ryan, Iowa Department of Public Safety commissioner; Rick Hunsaker, at-large member from Carroll; and John Gray, at-large member from Sioux City.

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