July 1, 2012

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Article

Utah’s Alcohol Problem

Do the State’s Byzantine Laws Stifle Economic Development?

Gaylen Webb

July 1, 2012

“The nature of our laws, the quirkiness of those laws, and probably more so, the implementation of those laws, furthers that perception. The laws certainly don’t do anything to counter that perception.”

Part of the problem may be that Utah liquor laws are just plain confusing—from where imbibers can buy a drink, to the types of drinks they can buy, to the hours they can buy them. Perhaps that’s why the New York Times last year ran a story headlined “Utah Liquor Laws, as Mixed Up as Some Drinks.”

One Utah law forces restaurant patrons to buy food with their drinks. Of that law Frey says, “It is very uncomfortable that we are forcing people to buy food in order to get a drink. It is awkward, and we get many complaints. It also puts our employees in a very difficult situation because they have to try to explain Utah’s liquor laws. The cities we compete against don’t have laws like ours. It almost appears we are holding our patrons hostage, like we are trying to get more money out of them.”

Toward Liberalization
The legislature has gotten a few things right concerning liquor controls in recent years, like doing away with the club membership requirement. Further, a change last year did away with a regulation that said hotel guests couldn’t order a single glass of wine from room service—they had to purchase an entire bottle instead—but other regulations still make Utah look silly.

Forcing newly licensed restaurants to serve nothing stronger than beer (weak 3.2 percent alcohol by weight), to keep taps and bartenders out of customers’ sight (behind a “Zion Curtain”) and have beer sales account for no more than 30 percent of revenue is one example. Or making it illegal to order a vodka and tonic with a shot of vodka on the side, but legal to order a vodka and tonic with a shot of whiskey on the side. Or allowing other liquors to be added to cocktails, in lesser amounts, as long as they are poured from bottles clearly marked “flavoring.”

Even the nomenclature of Utah’s liquor licensing system is bizarre and confusing, according to Beck. “The fact that we have to call some establishments ‘private clubs’ is really kind of crazy. Utah actually has two forms of restaurant licenses, a tavern license and four categories of private club licenses.”

News reports about Utah’s Zion Curtain don’t help the state’s perception problem. In August 2011, when Vuz Restaurant and Vuda Bar employees ceremoniously shattered the establishment’s Zion Curtain—two 15-foot-long, 200-pound pieces of frosted glass—on the parking lot pavement, the news went viral. Utah’s exotic liquor laws are indeed big news.

According to USA Today, Vuz Restaurant owner Mohsen Asgari “was free to smash his $2,800 partition because he’d obtained a coveted license that allowed him to serve drinks without one. But other new restaurants in the state aren’t so lucky.”

The paper is right. Other new Utah restaurants and bars aren’t so lucky. Many appear on license waiting lists—some for more than a year—due to the state’s strict liquor license lottery, a quota system based on population growth estimates.

“It is pretty obvious that when you have 18 applicants for social club licenses who have been on the agenda down at the [liquor control] commission for two years, that they’re stifling economic development in so far as they won’t allow more social clubs, which would mean more jobs, more taxes and more economic development,” says Ken Wynn, spokesperson for the Utah Hospitality Association.

Most business leaders don’t have qualms with a system that prevents communities from being overrun by bars and taverns, limits over consumption and prevents underage drinking.

“We are not advocating nor do we think it would be appropriate for a community like Salt Lake City or a state like Utah to look to Las Vegas or New Orleans as examples of how to change our liquor laws,” says Beck. “That is not the type of alcohol dispensing or alcohol consumption that would even fit within who we are as a community. But to look at Boise, Portland or Seattle—those are all communities that do this very well, but still have very strong commitments to prevent over consumption and underage drinking.”

A Vice Grip on Growth
Sandy Mayor Tom Dolan is a teetotaler, but he is also frustrated with Utah’s alcohol regulations. He believes they hamper economic development, and for good reason. Three large restaurants—one a national chain—chose to not to locate in his city because of the difficulty in obtaining liquor licenses and the restrictive nature of the liquor laws.

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