Lawmaker, Chamber CEO spar over liquor-sale proposal

A Republican state senator on Tuesday called out the chief executive officer of the Kansas Chamber of Commerce over his commitment to the free market.

In a hearing on a bill to allow grocery and big-box stores to sell full-strength alcoholic beverages, Sen. Rob Olson, R-Olathe, took issue with one of the bill’s biggest supporters, Mike O’Neal, former speaker of the House and now president and CEO of the Kansas Chamber.

After O’Neal said the bill is needed to bring free-market principles to liquor sales, Olson shot back that Wal-Mart, which would benefit from passage of the bill, had received more than $20 million in industrial revenue bonds business incentives for stores and distribution centers in Kansas.

“What’s free-market about Wal-Mart getting $20 million in my state of IRBs, while the liquor stores get nothing?” Olson challenged O’Neal. “I don’t see free market there.”

O’Neal replied that the Legislature had empowered local governments to decide what financial incentives to offer to attract businesses to their communities.

“It’s really kind of a disconnect,” he said of Olson’s comment. “I don’t see one having anything to do with the other.”

O’Neal had testified earlier in support of Senate Bill 298, saying the state’s current law restricting sales of full-strength beer and liquor to stand-alone liquor stores is an affront to the free market.

“We have a free and competitive system with one glaring exception, and that is the current system in Kansas for a virtual monopoly on the sale of alcohol products,” O’Neal said. “There’s nothing to be fearful of in a free-market system.”

Olson, however, held up a binder that he said contained information on business incentives granted to the big-box and grocery store chains that would benefit from being able to sell full-strength booze.

“If this bill hits the floor (of the Senate), I’m going to read every time in the state where these stores and the grocery stores get these incentives and abatements, and I think people would be very unhappy,” he said.

The Olson-O’Neal exchange was the most heated segment of a three-hour hearing on SB 298 before the Senate’s Federal and State Affairs Committee.

The bill would allow counties to hold elections on whether to allow full-strength beer, wine and liquor to be sold in grocery stores and full-strength beer to be sold at convenience marts.

Currently, only state-licensed liquor stores can sell full-strength beverages, while grocery and convenience stores are limited to wine coolers and beer with a maximum alcohol content of 3.2 percent.

If the bill passes, grocery and big-box stores would have to negotiate with a current liquor store owner to buy a liquor license and pay the state a $10,000 transfer fee.

Both sides brought in Kansas residents to bolster their long-running arguments over how businesses would be affected.

Karen Washburn of Lenexa argued for the bill, saying she was shocked to discover she couldn’t buy wine at the grocery store when she moved here 10 years ago.

She said she solved the problem by jumping over the border to Trader Joe’s in Kansas City, Mo., because the store on the Kansas side can’t sell wine.

“I’m not the only woman who is doing this,” she said. “At least 30 to 40 women in my neighborhood, they do the same thing. They’re traveling over in groups sometimes.”

Ron McDowell of Wichita gave the consumer perspective from the other side. He said he doesn’t have any investment in liquor stores but prefers the “easy-in, easy-out” convenience of the smaller stores.

He said he believes the small businesses contribute more to the community, because they hire their own workers to stock their shelves, rather than relying heavily on product vendors like big-box and large grocery stores.

This story was originally published March 31, 2015 at 5:58 PM with the headline "Lawmaker, Chamber CEO spar over liquor-sale proposal."