Industry lobbyists helped kill price hike on Iowa liquor
IOWA CITY, Iowa (AP) — Opposition from lobbyists for the liquor and restaurant industries helped kill a price increase on alcohol products in Iowa that was intended to discourage unhealthy heavy drinking, emails released Friday show.
The Iowa Alcoholic Beverages Division announced June 5 that it would implement a price floor for liquor products beginning July 1. The plan would have set a minimum unit price for liquor based on bottle size and alcohol by volume.
The change would have meant higher prices for vodka, rum, whiskey and other liquor at stores, restaurants and bars, ranging from roughly 10% to 30% more for some products.
The division said research shows such pricing can reduce heavy consumption and alcohol-related deaths. But it shelved the plan June 12 after getting feedback from “suppliers and other stakeholders.”
Emails released to The Associated Press through an open records request show those raising concerns included representatives for the national liquor producers Sazerac and Luxco, whose companies market scores of brands.
A Sazerac lobbyist wrote to a top aide to Gov. Kim Reynolds that the pricing change “obviously hurts consumers as well as small business.” That email was forwarded to the division’s administrator, Stephen Larson.
Larson received an email June 8 warning him that the plan would disproportionately affect products favored by African Americans, which was “insane at a time like this.” The AP was unable to determine the corporate affiliation of the person who sent the email, John Young.
Young said Larson had 24 hours to retract the plan or he would face scrutiny from the governor’s office and be “plunged into the middle of a media storm.”
The Iowa Restaurant Association president Jessica Dunker criticized the plan in a voicemail and later phone call with Larson and told him in an email, “You can imagine my distress.” Restaurants and bars have been devastated by the coronavirus pandemic, and they worried a price hike would undermine their sales and profits.
Democratic Sen. Claire Celsi has criticized the agency for backing down, noting that deaths from alcohol addiction have risen dramatically in Iowa over the last decade. On Twitter, she said the Legislature should act if regulators do not.
The division says it still believes the price floor plan is good public policy and will be revisited another time.
The commission that oversees the agency voted Tuesday to install as its chairperson Christine Spratt, a vice president of an alcohol distribution company in Mount Pleasant.
“Because of the COVID-19 pandemic and its effect on the alcoholic beverages industry, the work of the Commission and the Alcoholic Beverages Division to properly balance business opportunities with the protection of public health, safety and welfare will be vital,” she said in a statement.