Comments by:

Chris Girard, ONSA Director and CEO & President of Plaid Pantries

In case you have not heard the news, the OLCC recently passed an “emergency” rule, allowing liquor to be sold in “Large Grocery Stores” which sell “both fresh produce and fresh meat.” An employee of the grocery store would be the “Agent” of what the OLCC is referring to as their “Store-Within-A-Store” concept. This rule is now in the process of permanent rule making, and as presently written would exclude most ONSA members from participating. The “emergency” cited for this rule was the need to increase state revenues from liquor sales, and the perception among OLCC staff that buying hard liquor is too “inconvenient” for Oregonians.

The rule was apparently discussed for some period of time with representatives of the large chain grocery stores and a few large independent grocers. ONSA was not consulted, and no notice was given at all to the general public, other trade channels, or even the traditional Liquor Agents themselves. Notice of the “emergency” rule showed up on a revised OLCC Commission meeting the day before the Commissioners met to enact it!

In testifying before the Commission, ONSA objected on the basis of inadequate notice, which prevented an open discussion about such a major change in alcohol laws. We also objected that the new rule is unconstitutional, in that it grants special privileges to a class of trade without a rational, fair basis. When was the last time anyone left a State liquor store with their Jack Daniels, a pack of rib eyes, and a bunch of broccoli?!

In speaking before the Commissioners, I described our situation as the “Rodney Dangerfield Effect.” Paraphrasing Mr. Dangerfield, “ We don't get no respect !” I reminded the Commissioners of our previous problems with selective enforcement against the smaller operators, when we received a greatly disproportionate share of alcohol compliance checks (stings) when large supermarkets and OLCC's own liquor stores were not being subjected to this enforcement. And as for the criteria for participating in a program to sell hard liquor, I also reminded the Commissioners that when large supermarkets and OLCC stores were tested with minor decoys, their compliance rate was much worse than most ONSA members.

The Commissioners passed the rule anyhow, notwithstanding the testimony from ONSA, Liquor Agents, public policy groups, and citizens. So now ONSA's focus shifts to the permanent rule, to make it fair for small to medium size stores. I asked one of our ONSA members, Jim Welsh of Manzanita Fresh Foods, if he was a “Large Grocery Store.” Jim's response… “I'm the biggest thing in Manzanita!!” Which makes the point. ONSA is not advocating that liquor should be in every small store, on each of four corners of an intersection; but we do strenuously object to being excluded entirely from any consideration whatsoever, simply based on size and product mix. OLCC currently sells hard liquor out of drug stores, gift shops, small stores, and even a hardware store, with their non-exclusive agents in outlying areas. ONSA believes that our members should be considered on an equal basis with all other licensees, if and when OLCC decides that a particular market area is “under-served” with distilled spirits.

There is perhaps an even larger public policy issue at stake as well. Is it a good idea to make such a dramatic change in the way the State retails hard liquor? Many believe this is the first step towards general privatization. And judging by the intent in the current rule, we can be sure that ONSA members will be placed in an unfair competitive disadvantage, as any such program would likely be rolled out starting with the largest stores.

ONSA in the past has been neutral on the privatization issue, but if this rule goes forward as written, it may be that many of you would have a different opinion if your direct large competitors had such a traffic draw to pull precious customers from your store.

But this larger question will be considered by many more people than ONSA. For now our focus is on getting a fair permanent rule, which does not unfairly and illegally discriminate against our class of trade. In other words, we need a little respect.

Chris Girard, ONSA Director