Wednesday, January 18, 2017

The Reaction to Sunday Sales in Minnesota

Minnesota has a long standing blue law prohibiting the sale of alcohol on Sundays. Bars are restaurants are permitted to serve, but liquor stores are not. It looks like a new law is on the way to repeal the old one. A lot of people are excited, but I'd like to take a look at the arguments a few people are making against it. The thread I'm following starts with Patrick Kessler's twitter. Mr. Kessler is a political reporter for the local CBS affiliate.

The first reply is a person saying "I can't believe this is a priority. Seriously." Well, why is it a priority?

Let's start with my favorite: separation of church and state. Blue laws are clearly religious in nature. I'm not religious. I shouldn't be required to follow the rules you've chosen for yourself - even though a quick visit to a tavern after Sunday mass shows many of you aren't adhering to this particular rule anyway. Similarly, my Jewish friends don't hold the same taboo... and if they do, it's certainly not on Sunday. It's a vestigial law from the church's awkward power grab that failed nearly a hundred years ago. It'd be better for your religion if the law was removed and people forget it ever happened.

There's also the free enterprise perspective: this law prevents the market from taking it's natural course. I claim regulation that limits the hours/days a business can operate limits the success of that industry. Maybe it helps a subset of proprietors (to be discussed further on), but it certainly hurts the industry as a whole and the consumers.

Finally, on a state level this issue has absorbed a lot of time already. Many citizens are upset about it, and spend time writing their legislators asking for something to be done. Clearing this issue will open more time for other issues to be handled. Personally, I hope we move on to work on increasing Minnesota's renewable energy production. The important thing here is that we move on.

The thread continues over on Reddit. The first complaint I see is "As someone who works at a liquor store let me keep my damn day off!" The liquor stores seem to have pushed this notion as something to get their employees behind them. Ultimately, scheduling is at the discretion of the liquor stores. I don't see a reason why an employee would not be allowed a set schedule. If they have one person working six days a week they're probably doing something wrong already. I can think of several retailers that have their employees work on consistent days and give them consistent days off. If they're having trouble finding people to work Sundays for some reason, a slight shift differential could resolve that problem fairly easily. There's no reason for this to be an issue unless the proprietor wants to make it one.

Another person posits "This law has nothing to do with religion and everything to do with liquor store owners who want to keep their operating costs lower." I've heard this claim several times before. Is it true? It's hard to tell. I was not able to find any sources that break down liquor sales by day for any given state. What I was able to find is the state's municipal liquor store report. There are 19 municipal stores in the Twin Cities metro area. They account for over 30% of all of the municipal liquor sales in the state. A quick glance through the table shows some of these stores operated at a a five figure loss last year, one reaching -$50,000.

My search to learn more about these municipal liquor stores lead me to The Minnesota Municipal Beverage Assocation page about Sunday sales. Their first claim is that their opposition to the law is not about increasing working hours. I was able to find sites claiming paying employees account for 70% of the costs after purchasing inventory, but okay... let's allow their assertion. Why are they opposed to the change? I want to start by pointing out two claims.

First, "It is about spreading six days of sales over seven days of expenses. Alcohol is not a destination purchase. People don't get up and say "let's go alcohol shopping." It is an impulse purchase that, in the vast majority of locations, doesn't pay the day's bills." Second, "In addition, Sunday Sales has the potential to lead to the elimination of 3.2 beer and ultimately Wine & Strong Beer in Grocery / Convenience Stores." I see a solution to the first problem in the second!

The MMBA is essentially saying without the state protecting their business model, they would go out of business. Since this particular business model leeches up to $50,000 from small communities' tax pools, I think it's fair to demand they compete with businesses that operate without taxes propping them up. If liquor is an impulse buy, or something people only want while they're already out at other places... why not sell it in places where people go while they're out?

MMBA also appeals to public safety concerns. They cite studies done in New Mexico in 2005. New Mexico permitted Sunday sales in 1995. A quick google search brings up's table on traffic incidents. New Mexico's population has increased about 70% from 1980 to 2010. Meanwhile, traffic fatalities in the same period are around 40% lower. Alcohol related fatalities made up 65% of accidents in 1982 (the first year on the chart, while a Sunday ban was in effect), and have not risen above 51% in the years following the removal of the ban. In fact, when New Mexico implemented an ignition system law for repeat drunk driving offenders, the percentage fell to the 30%-$38% range. It seems there are smarter ways to help public safety after all!

Next they say it's bad for business. They bring out my local store's manager, Scott Neal to say opening an extra day would increase our costs by 16% (I see 1/7=.14, but I'll give him a few points of wiggle room). He then assumes no increase of sales - I know I have forgone purchasing alcohol at least three times in the last six months on Sunday, and I'm not a heavy drinker. The Edina liquor store I go to is next to a grocery store. That grocery store's lot is thriving, even on Sundays. If alcohol is an impulse buy, as the MMBA asserts, this Edina Liquor store will see additional sales on Sunday. But if you assume increased costs, no increase in sales, boom! You've got a bad-for-business move on your hands. I think Mr. Neal made a bad argument.

Their final appeal is that car dealerships also operate under a blue law prohibiting them from selling cars on Sunday. "So, for those who support repealing the ban on liquor sales on Sunday – is it about government not interfering in commerce, or is it about more access to alcohol?" Can't it be about both? Here's a good video on why car dealerships suck, and how the government regulation helps keep it that way.