Liquor numbers
Tax revenues, liquor stores drop in first month of alcohol changes
BUSINESS
Early returns are in from the first month of activity in the new alcohol economy.
Early returns show little change in tax revenues and the closure of several retail liquor stores after the enactment of several alcohol reform measures that took place Oct. 1. After Oklahoma voters passed State Question 792 in 2016, the state awaited the changes to the distribution and sale of alcohol until October 2018. Stronger beer and wine became available for retail in grocery stores and convenience stores, liquor stores were allowed to sell refrigerated beer and distribution firms merged as allowed under the new laws. Much speculation was made as to the effect these changes would have on the consumer, the retailers and the economy. Now, in December, there is data to examine from the first month of activity in the new alcohol economy.
Sales tax
Revenues shifted among tax collections in the alcohol industry in October; however, the total amount collected was below average. The state collected nearly $9.7 million in alcohol taxes in October, compared with a monthly average of nearly $10.5 million during the first three months of the fiscal year. The amount collected was more than $600,000 less than what was collected in September. Looking deeper, the revenues within the sum collected shifted as less 3.2-alcohol- by-weight beer was sold in the state, and products were sold at their more traditional alcohol-by-weight amounts. Slightly more than $380,000 was collected in “Low Point Beer Tax” in October, compared with more than $1.8 million in September. Conversely, “Strong Beer Tax” revenues spiked, as collections went from nearly $214,000 in September to more than $1.4 million in October.
Business closures
Concerns were raised for months leading up to October by retail liquor store owners about the ability to
compete when wine and strong beer could begin being sold by grocery and convenience stores.
One month in, and the state is already losing those businesses.
The total number of active retail liquor store
licenses dropped from 645 at the beginning of the month to 627 at the end of October, according to the Oklahoma Alcoholic Beverage Laws Enforcement Commission. That number had dropped from 684 in October 2017.
Fluctuation is everpresent as businesses open and close, but this drop falls below the normal changes.
“It seems to me that has
been a fairly stable number for some time, right in that 650 to 700 range,” said Steven Barker, the ABLE Commission chief attorney.
While the retail liquor stores have dropped licensees, the number of retail beer and retail wine licenses have continued to climb. These licenses are new as a result of SQ 792, and there were zero issued
as of October 2017.
“Retail beer and retail wine ... that’s your convenience stores, your grocery stores, your pharmacies,” Barker said.
By the beginning of October 2018, there were already 2,851 retail beer and 1,532 retail wine licenses issued, and by the end of the month those numbers had increased to 3,271 and 1,690, respectively.