Judges to hear challenge to state’s alcohol permit process

A complaint arguing that Indiana’s system of issuing alcohol permits violates state law is set to be heard by a panel of appellate court judges on Monday.

The Indiana Association of Beverage Retailers, which represents the state’s package liquor stores, is seeking to stop the Indiana Alcohol and Tobacco Commission from issuing new permits until the judges can clarify state quota laws.

The dispute arose from a legislative compromise in 2008 that rewrote beer permit rules and lowered the number of available alcohol permits based on population. The association agreed to the deal, provided that drugstores be classified as grocery stores when applying for an alcohol permit—in theory limiting competition.

But the commission has interpreted the law so that groceries and drugstores have separate quotas and, as a result, the association says permit numbers in some cities exceed what should be allowed.

“If [it’s] not counting them against the quota, there are more of them out there, which increases competition,” said John Livengood, president and CEO of the beverage retailers association. “We’re getting to the point where we’re awash in alcohol permits.”

Dozens of alcohol permits filed by the Walgreens drugstore chain further pushed the beverage retailers association to challenge the permitting process. Walgreens received approval to sell alcohol at 14 of its stores in Indianapolis. Altogether, it had sought to sell alcohol in 183 stores throughout the state.

In a court filing, the beverage retailers association cites an example in which a town might have 12 beer dealer permits available. But under the method in which the commission interprets the law, a total of 24 beer permits could be issued.

“There is only one type of beer dealer’s permit available to grocery stores and drugstores under the relevant statutory provisions or under any rule,” the association argued in the filing.

The case is being considered on appeal after a Marion Superior Court judge last year denied a motion by the beverage retailers association for a temporary restraining order seeking to halt permits.

“We thought the trial court got it right,” said Mark Massa, chairman of the Alcohol and Tobacco Commission. “It’s been the custom and practice for nearly 40 years to count permits in this manner.

A three-judge state appellate court panel will hear oral arguments at 11 a.m. Monday in Room 413 of the Statehouse.