Mayor Carter should not veto a reduction in the distance requirement between Saint Paul’s liquor stores

Last year, I wrote in our magazine, Thinking Minnesota, about the success in recent years of our state’s craft brewing industry. The pandemic, and the state government’s misguided response to it, is jeopardizing this.

Gov. Walz’ second shutdown kills BrewWorks

Yesterday, BrewWorks in Wayzata announced their closure after nearly five years of operation. In a statement, BrewWorks said:

After enduring the spring shutdown, imposed by the Governor, and then managing thru the Governor’s mandated reduction of capacity during our most profitable part of the year on Lake Minnetonka. We are now faced with a second shut down imposed by Governor Walz, a shutdown that doesn’t involve any sustainable relief from the Governor in order to help alleviate the economic calamity brought to our industry as a result of his decision. We have many thoughts around the Governor’s actions; we will leave it at this; Until the governor and others making the decisions around shutdowns and restrictions are personally financially affected by those decisions, those decisions will continue to cause unnecessary financial hardship.

Between mid-June and their latest closure, the Department of Health’s own data showed that bars and restaurants were linked with just 1.7% of Minnesota’s Covid-19 cases. Not a single Covid-19 case has been traced to BewWorks. It is gone all the same.

To help breweries, protectionist ‘distancing requirements’ should go

Another of Minnesota craft breweries is Yoerg’s in Saint Paul. Since 2016, they have been doing an excellent job of reviving the brewing traditions of Minnesota’s first commercial brewery, which was founded in 1848 and closed in 1952.

The shutdowns have hit them hard. As the Pioneer Press reports:

Yoerg proprietor Thomas Keim hoped to expand upon the brewery’s popularity by opening a wedding and event hall next door, but the pandemic ended that party. He’s opted instead to open Vin de Pays, a boutique wine shop, but longstanding city distance requirements for retail liquor establishments are complicating those plans, as well.

Most suburbs surrounding St. Paul have abandoned requiring considerable distance between off-sale liquor license holders, but Minnesota’s capital city still imposes a half-mile distance separation between liquor shops outside of downtown.

Why do such ludicrous regulations exist? Protectionism, pure and simple:

“We do take this very seriously,” said Brian Farrell, chief operating officer of Haskell’s liquors. “We sell a controlled substance. Our industry is highly regulated. So more liquor stores is not the same as adding new, other retail shops.”

Letters of opposition also have come in from Perrier Wines, 1st Grand Avenue Liquors and Lowertown Wine and Spirits, who say increased competition will hurt mom-and-pop storefronts at a difficult time for many.

Referring to business struggles and declining city tax revenue during the pandemic, Tony Chesak, executive director of the Minnesota Licensed Beverage Association, called Prince’s proposal “a drastic response to a temporary situation.”

“After talking to all of the off-sale establishments in St. Paul, they have not heard of a public outcry for more outlets,” he wrote. “Will this not split the pie even further?”

In other words, these businesses are worried that consumers may choose to go somewhere else if the government doesn’t prevent these potential competitors from opening. This is both morally and economically indefensible.

There is good news:

On Wednesday, those rules could change. Outside of downtown, the St. Paul City Council is poised to reduce the distance requirement between wine-only shops — of which the city currently has none — and other liquor establishments to a quarter-mile. Within downtown, the distance requirement will remain 300 feet.

Or there was:

On Tuesday, St. Paul Mayor Melvin Carter sent a letter to the council asking for more time for the Department of Safety and Inspections to review the proposed ordinance amendment and public feedback around it. In less than subtle terms, he also threatened a veto.

“Staff in our Department of Safety and Inspections must have an opportunity to research the proposed ordinance, lay out potential impacts and alternatives, and adequately address the myriad questions and concerns currently being voiced by neighbors and business owners, ranging from public safety issues to market impacts and uncertainty about changes in sales tax revenues,” Carter wrote.

“I cannot in good faith sign such significant policy change into law without a thorough review by the city staff who will ultimately be charged with administering it.”

Sadly, as the fate of BrewWorks shows, the time it will take for the Mayor and his bureaucrats to decide what to do is time breweries like Yoerg’s don’t have.

John Phelan is an economist at the Center of the American Experiment.