Commonwealth Journal

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August 15, 2013

Courts to clarify liquor store quotas

Somerset refiles case against ABC


Somerset —

The city had fought to get more than the five liquor licenses, up to the point of filing a complaint in Pulaski Circuit Court in late January, claiming that that the initial decision by ABC to grant only five licenses — and award them to two pharmacy chains and three retailers that the city considered smaller than what they were expecting — was “arbitrary and capricious.”
The city contended that the state had failed to follow Kentucky statutes in the application of the city’s ordinance, and that the existing quota system had no current regulations to limit the numbers beyond the guidelines of county population. The ABC had used Somerset’s population to arrive at the figure of five, based on a calculation of one liquor store for ever 2,300 residents. If they had gone by county population, Somerset could have qualified for over 25 such licenses, which allow for the operation of retail stores that sell distilled spirits and wine, rather than just beer.
In the six months to follow, the Somerset and state ABC hammered out a deal that would compromise: five new liquor licenses for Somerset, which — the city hoped — might allow for high-volume retailers with loads of investment money to get a license and positively impact the city’s tax revenue.
That deal was on the table when the meeting with the review subcommittee took place. After they ruled the ABC’s regulations deficient — in an effort, Girdler believed, to prevent Somerset specifically from getting more competition for existing stores — that left the state in an interesting position. Girdler contended that rules would default back to the pre-existing ones that based liquor license quotas on county population, rather than that of the city.
“ABC has admitted that there is no current quota system for cities like Somerset, except for using the county population totals,” reads the city’s statement. “The lawsuit seeks to determine what statutes and regulations to apply in the issuance of quota licenses since no rules exist.”

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