Buying Beer In Minnesota: Grocery Store Rules Explained

Minnesota has some of the most restrictive laws on retail competition in the liquor business in the United States. The state prohibits most grocery, convenience, drug, and general merchandise stores from selling strong beer, wine, and spirits for off-premises consumption. Grocery stores in Minnesota can only sell beer with less than 3.2% ABV; wine and distilled spirits are only sold at municipal liquor stores.

Minnesota's alcohol sales laws

Minnesota has some of the most restrictive alcohol sales laws in the United States. The state prohibits most grocery, convenience, drug, and general merchandise stores from selling strong beer, wine, and spirits for off-premises consumption. Only beer with less than 3.2% ABV can be sold in grocery stores and gas stations, and these beverages must be purchased from a separate area of the store or a separate store entirely. Wine and distilled spirits can only be purchased from municipal liquor stores.

Bars, restaurants, and clubs can serve alcohol every day from 8 am to 2 am. Alcohol for off-premise consumption can be purchased from 8 am to 10 pm, Monday to Saturday, and 11 am to 6 pm on Sundays. On-premise alcohol sales are allowed seven days a week. Off-premise sales are banned on Thanksgiving, after 8 pm on Christmas Eve, and all day on Christmas Day.

Minnesota's alcohol laws have a significant impact on prices. Off-sale beer and wine prices are 7 to 9% and 5 to 7% higher, respectively, than in Wisconsin, a state with fewer restrictions on retail competition. However, distilled spirits prices are 8 to 10% lower in Minnesota due to a state law that encourages competition among spirits wholesalers. Removing restrictions on retail competition in the liquor industry could save Minnesota consumers about $100 million annually, but it could negatively impact existing private liquor stores and municipal liquor stores, which provide profits for city services.

There have been legislative efforts to allow the sale of wine and strong beer in grocery stores, but these have been opposed by the liquor industry, which includes small "mom and pop" liquor stores, distributors, and retailers. Some lawmakers have proposed measures to legalise the sale of wine and strong beer in grocery and convenience stores, and to put the issue to a vote in the 2024 state ballot. However, these measures have not gained widespread support.

Beer, wine, and spirits sales

Minnesota has some of the tightest restrictions on alcohol sales in grocery stores in the United States. Grocery stores in Minnesota are currently prohibited from selling strong beer, wine, and spirits for off-premises consumption. Only beer with less than 3.2% ABV can be sold in grocery stores and gas stations.

Some grocery stores have liquor store licenses, but these must be separate from the grocery store and limited to one within any local jurisdiction. However, some grocery stores have two entrances in their foyer: one for the grocery store and one for the grocery store-branded liquor store.

There have been some efforts to change the law to allow grocery stores to sell wine and strong beer. For example, Rep. Kurt Daudt, a Republican from Crown, is the lead sponsor of two measures: House File 574, which would legalize the sale of strong beer and wine in groceries and convenience stores, and House File 1848, which would place the issue on the 2024 state ballot and ask voters to amend the Minnesota Constitution.

However, there is opposition to changing the law, including from liquor stores, distributors, and the Teamsters. The Minnesota Licensed Beverage Association argues that existing liquor stores have proven that no new laws are needed to increase access to alcohol in the state. There are concerns that changing the law could negatively impact existing private liquor stores and reduce tax revenue for city services. Some research also suggests that changing the law could increase problems with alcohol abuse.

Overall, Minnesota's laws on beer, wine, and spirits sales are complex and the subject of ongoing debate.

Liquor laws and their impact on small businesses

Minnesota is one of the few states in the US that restrict the sale of wine and strong beer in grocery stores. Only beer with less than 3.2% ABV can be sold in grocery stores and gas stations; wine and spirits are only sold at municipal liquor stores. This is a result of liquor laws that aim to protect small businesses and mom-and-pop liquor stores.

Impact on small businesses

Minnesota restricts retail competition in the liquor business more than most states. The state prohibits most grocery, convenience, drug, and general merchandise stores from selling strong beer, wine, and spirits for off-premises consumption. Additionally, many of the 226 cities with city-owned liquor stores have an off-sale monopoly on these products within their boundaries.

These laws have a significant impact on small businesses, particularly bars, restaurants, and event venues. The increased costs of liquor liability insurance premiums are a financial burden for small businesses, which often operate on tighter margins and have less financial flexibility. The additional expense may lead to difficult financial decisions, such as cutting staff, reducing operating hours, or increasing prices for customers, which can negatively impact business.

The high cost of liquor liability insurance can also act as a barrier to entry for new businesses. Entrepreneurs looking to open bars, restaurants, or event spaces might find the cost prohibitive, leading to fewer new establishments and potentially stifling local economic growth.

Other impacts

The restrictions on retail competition in Minnesota have resulted in higher prices for beer and wine compared to other states like Wisconsin. However, the state's laws that encourage competition among spirits wholesalers have led to lower prices for distilled spirits. Overall, adopting less restrictive retail laws could save Minnesota consumers about $100 million annually.

While removing state restrictions on competition in the liquor industry would lower prices and improve convenience, there are also potential adverse impacts. Increased competition from grocery, convenience, and supercenter stores could cause many private liquor stores to go out of business. Additionally, there are concerns that lower prices and increased availability of alcoholic beverages could lead to a rise in alcohol abuse, which already costs the state more than $4.5 billion annually.

Future changes

While there have been efforts to change the liquor laws in Minnesota, the leaders of the commerce committees with jurisdiction over these laws have stated that they will not hear bills to allow groceries and convenience stores to sell beer and wine in 2024. However, Representative Kurt Daudt has sponsored two measures: House File 574, which would legalize the sale of strong beer and wine in groceries and convenience stores, and House File 1848, which would place the same issue on the 2024 state ballot as a constitutional amendment.

The liquor laws in Minnesota, which restrict the sale of wine and strong beer in grocery stores, have both positive and negative impacts on small businesses. While they protect existing small liquor stores and municipal stores, they also impose financial burdens on bars, restaurants, and event venues, and hinder new businesses from entering the market. Additionally, the laws have resulted in higher prices for beer and wine, but lower prices for distilled spirits due to increased competition among spirits wholesalers. Any future changes to these laws should carefully consider the potential impacts on small businesses and the risk of increased alcohol abuse.

Alcohol sales in grocery stores in other states

The sale of alcohol in grocery stores is a complex issue in the US, with laws varying significantly from state to state. While selling alcohol in grocery and convenience stores is common across the country, there are still some states that prohibit or restrict it. Here's a breakdown of the situation in different states:

• Minnesota: In Minnesota, only beer with an alcohol content of up to 3.2% ABV can be sold in grocery stores. Wine and distilled spirits, on the other hand, are only available in municipal liquor stores. This restriction on grocery stores is due to the state's desire to protect small businesses and municipal liquor stores, which generate significant revenue for city coffers.
• Arizona: In Arizona, sales of any type of alcohol are legal at stores with an off-premises liquor license, including convenience stores and grocery stores.
• California: California allows the sale of beer, wine, and liquor in grocery stores, but there are some dry towns in the northern half of the state where alcohol sales are prohibited.
• Colorado: In Colorado, a new bill passed in 2016 allows grocers to sell full-strength beer, wine, and spirits. Previously, they could only sell beer with an alcohol by volume below 3.2%.
• Connecticut: In Connecticut, convenience stores are treated as grocery stores for alcohol licensing purposes and must have a majority of their sales come from "grocery items" such as food.
• Indiana: Indiana prohibits the sale of cold beer by grocery stores or gas stations. Cold beer can only be sold from liquor stores.
• Kansas: Kansas has some of the strictest alcohol laws in the US. Grocery stores in Kansas may only sell beer with an alcohol content of 3.2% or less.
• Michigan: In Michigan, "food convenience stores" can obtain licenses to sell beer, wine, and spirits.
• Nevada: Nevada has few restrictions on the sale and consumption of alcohol beyond a minimum age requirement. The maximum ABV of alcohol sold is 80%.
• New Mexico: In New Mexico, liquor can only be sold in state-licensed retail liquor stores, while beer and wine can be sold in grocery stores.
• New York: In New York, off-premises sales of wine and spirits are restricted to liquor stores, while beer is sold in supermarkets and convenience stores.
• Oklahoma: In November 2016, Oklahoma approved a state constitutional amendment allowing grocery and convenience stores to sell alcoholic beverages above 3.2% ABV, which took effect in October 2018.
• Pennsylvania: In Pennsylvania, wine was previously only allowed to be sold in a state-operated outlet within grocery stores. However, a new law passed in 2016 allows licensed grocers to sell up to four bottles of wine directly to consumers within the store.
• Utah: In Utah, only beer with an alcohol content of under 3.2% ABV can be sold privately, and all outlets selling alcohol for off-premises consumption are considered "off-premise beer retailers".
• Vermont: Vermont has a generic off-premises sales permit for any establishment selling beer, wine, and/or spirits, without specific restrictions on grocery or convenience stores.
• Washington: In Washington, liquor sales were privatized in 2012, allowing over 1400 private stores to sell alcohol. This change has led to concerns about increased retail theft, especially by minors.

The debate around alcohol sales in grocery stores considers the balance between economic benefits and public health and safety concerns, including underage drinking and crime. While some states prioritize consumer convenience and business opportunities, others focus on restricting outlet density to mitigate excessive alcohol consumption and related harms. Ultimately, each state and territory in the US has the power to regulate intoxicating liquors within their jurisdiction, resulting in a diverse landscape of alcohol sales laws across the country.

Alcohol excise tax in Minnesota

Minnesota has a relatively low excise tax on alcohol. The tax rates are as follows:

• Beer Tax: $0.15 per gallon
• Wine Tax: $0.30 per gallon
• Distilled Spirits Tax: $5.03 per gallon

Additionally, there is a Federal alcohol excise tax included in the price of alcoholic beverages sold in Minnesota. The Federal tax rates are as follows:

• Beer Federal Excise Tax: $18.00 per 31-gallon barrel, or $0.05 per 12-oz can
• Wine Federal Excise Tax: $1.07 to $3.40 per gallon; $0.21 to $0.67 per 750ml bottle
• Distilled Spirits Federal Excise Tax: $13.50 per proof gallon or $2.14 per 750ml 80-proof bottle (40% ABV)

In Minnesota, the sale of alcohol is highly regulated, with restrictions on where and when alcoholic beverages can be purchased. Only beer is sold in grocery stores, and it must have an alcohol content of less than 3.2% ABV. Wine and distilled spirits are only sold in municipal liquor stores, which are often the only type of alcohol retailer allowed in many cities. These stores are typically open from 8 AM to 10 PM, Monday to Saturday, and 11 AM to 6 PM on Sundays. On-premise alcohol sales are allowed seven days a week from 8 AM to 2 AM.

Minnesota's alcohol laws have been the subject of recent debate, with some lawmakers pushing to allow grocery and convenience stores to sell strong beer and wine. However, others argue that changing the laws could negatively impact existing private liquor stores and municipal stores, which provide significant revenue for city services. There are also concerns about the potential impact on alcohol abuse, particularly if laws are changed to allow greater retail competition in the alcohol industry.

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