Business

Iowa illegally marked up liquor prices, retailers claim in proposed class-action lawsuit

A spokesman for the Iowa Alcoholic Beverages Division has called the allegations of excessive markups untrue. (The Gazet
A spokesman for the Iowa Alcoholic Beverages Division has called the allegations of excessive markups untrue. (The Gazette)

DES MOINES — A proposed class-action lawsuit filed on behalf of liquor retailers alleges that the Iowa Alcoholic Beverages Division illegally marked up the price of their products for years.

The lawsuit, filed Friday in Polk County, comes days after the division’s former comptroller filed his own lawsuit alleging he was fired for blowing the whistle on the illegal price markups.

West Des Moines attorney Stuart Higgins represents the plaintiffs in both cases.

A spokesman for the division has called the allegations of excessive markups untrue and didn’t immediately return an email seeking comment Monday.

The lawsuit was filed on behalf of Class E liquor license holders who purchase products from the agency, which is Iowa’s exclusive wholesaler and distributor of liquor. Those licensees currently include nearly 1,700 grocery, liquor and convenience stores.

State law allows the division to mark up products by 50 percent above what it paid before selling them to licensees.

The lawsuit alleges that the markups that the agency assessed for years was “in excess of the statutory cap” and seeks reimbursement for the overcharges and other damages. It doesn’t elaborate on the amount involved.

The lead plaintiff is the owner of an Ottumwa convenience store that had a liquor license until 2016.

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