Is strong beer coming to Minnesota grocery stores? Senate committee leader hopes so

A bipartisan bill that would allow strong beer sales in Minnesota grocery stores has the support of the chair of the Senate committee that controls liquor laws.

Senate Commerce Committee Chair Matt Klein, DFL-Mendota Heights, said he will push a change in state liquor law that falls short of full beer and wine sales in grocery stores but does open up access to beer. Klein said he will work with the most-active Senate GOP proponent of grocery store beer and wine sales: Sen. Karin Housely, R-Stillwater.

Current law restricts most alcohol sales to liquor stores — both privately owned and municipal stores. Only what is called three-two beer — 3.2% alcohol by weight or 4% by volume — is allowed to be sold in supermarkets, grocery stores and convenience stores. Minnesota is the last state with a three-two law and fewer brewers offer malt beverages with such low alcohol content, although some craft beers considered “sessionable” meet the 4% by weight standard.

Klein’s proposal would allow full-strength beer to be sold in the same places three-two beer is sold. It would not allow wine sales. But stores that want to shift to stronger beers would need the permission of the municipality where the store is located. Cities, townships and counties could say no, and some have municipal stores that have a monopoly on alcohol in their communities.

“I think it’s kind of a deceptive or fraudulent product. People think they’re getting beer and they’re getting less than that,” Klein said. “It’s truth in advertising. If you’re gonna sell beer, let’s sell beer.”

Grocery stores currently are allowed to have liquor stores. But state law requires alcohol to be sold in separate spaces with separate entrances than the grocery store. And chains can only have one liquor store per city, creating circumstances where one Target or Lunds & Byerlys in a city has a liquor store but all the others do not.

Klein said his intent is to let all stores sell strong beer if allowed while retaining the one-liquor-store per city provisions for wine and distilled spirits.

The politics around alcohol sales in Minnesota is complicated. A coalition of liquor store owners, local governments with municipal stores, alcohol distributors and the Teamsters Union were joined two years ago by the craft beverage industry to make several changes to the laws. They included increasing the size of craft brewers that could still sell growlers from onsite tap rooms and allowing craft brewers to sell their products in cans and bottles, in addition to growlers and crowlers.

But that so-called “peace in the valley” agreement left grocery stores out. It also included an agreement that none of the parties would support additional changes to liquor sales for five years. It is rare that significant law changes pass over the objections of liquor stores and the unions that deliver the product. The most significant recent exception was the legalization of alcohol sales on Sunday in 2017. 

Grocery store sales are a significant worry of liquor store owners. After the 2022 deal was struck, Tony Chesak, the executive director of the Minnesota Licensed Beverage Association, said: “The biggest threat to independently owned liquor stores is big box, convenience grocery stores.”

Leslie Rosedahl, who does media relations for the Minnesota Licensed Beverage Association, said liquor store owners oppose what they call “alcohol everywhere” laws.

“There is no evidence consumers are having difficulty obtaining alcohol,” she wrote in response to questions about Klein’s proposal. And all states have sales of low-alcohol content beers, she said, which is usually labeled as 4% ABV — alcohol by volume — but is legal for non-liquor stores because it equates to 3.2% alcohol by weight.

“The fiscal impacts would hurt independent, family-run businesses and cities with municipal liquor operations,” she wrote.

Klein said he understands why local liquor stores would have concerns, “but I think they’ll be able to compete by virtue of their ability to sell wine and spirits. I’m hoping it’s not too disruptive to the distributors and the Teamsters, but I’m certain they will oppose the bill because the status quo has a lot of credibility with those three groups.

“But it’s something worthy of a conversation because we’re the only state that sells three-two beer,” Klein said.

Klein, who took over leadership of the commerce committee last year, said he went along with the five-year agreement, even though the Legislature isn’t bound by it. He said he now feels more comfortable with the issue. Housely has long pushed legislation to allow beer and wine sales in grocery stores. She will cosponsor the bill with Klein.

Rep. Zack Stephenson, the Coon Rapids DFLer who chairs the House Commerce Committee, said he does not support the change Klein is proposing.

“I don’t think it has support in either the House or Senate commerce committees,” Stephenson said. “It’s bad for small businesses — mom and pop liquor stores and craft breweries.” He said the point of the 2022 liquor law changes was to boost the small breweries “that are very important to a lot of communities around the state.”

Liquor law changes in Minnesota do tend to follow a five-year rule. It was 2011 when the Legislature passed the so-called Surly Bill, named after the brewer, which allowed for the sale of beer on site in taprooms and to-go in growlers. And it was 2017 when the Legislature finally allowed private and municipal liquor stores to open on Sundays.Five years after that came the deal between key and formerly warring segments of the alcohol business in Minnesota — the so-called Free the Growler bill — that included an agreement that none of the parties will return to the Legislature to significantly change Minnesota liquor laws for five years.

Editor’s Note: Peter Callaghan wrote this story for MinnPost.com. It was originally published on Feb. 9.