Commonwealth Journal

June 15, 2013

Mayor anticipates tussle over additional liquor licenses

By CHRIS HARRIS, CJ Staff Writer
Commonwealth Journal

Somerset —

According to Mayor Eddie Girdler, not everyone is excited about the prospect of Somerset getting more liquor store licenses.
Mayor Eddie Girdler said Friday that the Kentucky Department of Alcoholic Beverage Control (ABC) has recommended approval for five additional Retail Liquor Package licenses to be allowed for issuance in Somerset.
However, he also stated that he expects several local stores to try and prevent this from happening so as not to lose any business from incoming competitors.
The city has been lobbying the state for the additional licenses, as far back as January of this year, when local officials learned the state ABC had only approved five such licenses for Somerset. 
Retail Liquor Package licenses, which are granted to those wishing to open stores that sell wine and distilled spirits by the package, are what’s known as a “quota” license, meaning a limited number are set for each city. (Malt beverages and beer are allowed an unlimited number of licenses, which is why they’re common in groceries and convenience stores around Somerset.) The state office also selects which applicants should receive those licenses for each community.
Girdler, Somerset ABC Administrator Nick Bradley, and legal counsel made a presentation to state alcohol officials this past spring hoping to convince them a city of Somerset’s size could support more than five liquor stores.
Part of the reason for the appeal was because of the stores the state chose for Somerset. High-volume retailers like Liquor World, which had planned on making a $5 million investment to revitalize the North Plaza Shopping Center in Somerset, were passed over, and two pharmacy chains (Rite-Aid and Walgreens) and three locally-owned stores (Apple’s Wine & Spirits, First Stop Party Supply and Package Store, and Wildcat Beer, Wine, and Spirits) were awarded the licenses. 
The city felt that the businesses chosen, with the exception of Wildcat, were smaller than what was desired to help grow the city’s economic coffers through alcohol-generated revenue, and local officials actually delayed issuing city licenses until they felt they had made a sufficient case with the state to get more.
Now, Girdler is simply anticipating a Kentucky legislative oversight committee, a section of the Legislative Research Commission made up of members of the General Assembly, to meet and give the green light to the administrative rules approved by ABC, which would affect two dozen cities throughout Kentucky seeking to advance alcohol sales, including Somerset.
However, following an open records request submitted to the city on behalf of three local liquor retailers, Girdler believes the current stores want to block Somerset from being issued more licenses.
“It appears they are saying they don’t want any more competition,” said Girdler. “They have a monopoly on package stores and they want to keep it.”
Girdler confirmed that the two “chains” were not among those seeking to block the new licenses based on what he knows, meaning it would be the three locally-owned stores that were banding together for this purpose.
The Commonwealth Journal attempted to contact or left messages with ownership of those three stores this weekend, but was unsuccessful in reaching them or did not have messages returned by presstime Saturday.
The committee will meet in the first two weeks of July, according to Girdler.
State Rep. Ken Upchurch of Monticello (who represents parts of Pulaski County) told the Commonwealth Journal that he’s on this panel, the 2013 Interim Joint Committee on Licensing and Occupations. 
However, Upchurch said that it would be “premature to even speculate” on how the Somerset liquor licensing issue might be handled. 
“I’d like to see what’s on the agenda and what regulations (the state ABC office is) proposing,” he said.
According to Girdler, the meeting has yet to be precisely scheduled.
Girdler said that as he understands it, “this is a political process, not a legal process,” and that “the three companies ... would try to obtain some changes relative to Somerset through the political process.”
He added, “My understanding is that it’s based on whatever the committee wants to do. They have the flexibility of determining whether they will entertain any other comment other than what the ABC board has submitted to them.
“We don’t understand how without a public hearing, (other parties) could even make objections,” he added. “Once (the ABC’s) recommendations went over to the general assembly oversight committee, then this committee schedules a hearing.”
Girdler said that the revising of ABC rules regarding how licenses are distributed applies to all cities throughout Kentucky, and that the office “has done a masterful job. They’ve been very easy to work with and have listened to us. ... We had a hearing with them in Frankfort. Nobody showed up to object and the ABC board took up our recommendations.
“Based on the presentation, the ABC board felt 10 (liquor licenses) would be sufficient to serve the area,” he added. “... There are no issues except for local people who feel like a monopoly is the way to go, which we don’t agree with.”
Girdler said that in most cases, differences between the ABC board and oversight committees can be taken up by the governor’s office or circuit court system to decide.
“Either way, we will defend our positions that monopolies are not good, and competition should be a way of life in this industry,” said Girdler. “We will actively represent Somerset and make sure our interests are heard.”