Grocery, convenience stores can't sell cold beer, appeals court says

Hoosiers who want to buy cold beer will have to keep going to liquor stores to do so.

An effort to invalidate Indiana's cold-beer statute failed — again — following an appeals court decision that keeps the status quo: Grocery and convenience stores can only sell beer at room temperature.

The ruling comes more than two years after the Indiana Petroleum Marketers and Convenience Store Association filed a federal lawsuit seeking to overturn the state's decades-old law that prohibits gas stations, convenience stores and grocery stores from selling cold beer, but allows liquor stores to do so.

The trade association claimed the law is discriminatory and violates the Equal Protection Clause of the U.S. Constitution. It also argued that the statute takes revenue away from its members.

Last year, federal district Judge Richard Young ruled that the state law is constitutional and Indiana has a rational basis for not allowing grocery and convenience stores to sell chilled beer. The trade association appealed the ruling, but the federal appeals court judges upheld it in a 3-0 decision.

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Indiana's liquor laws have long been criticized as archaic, and there have been movements both in the legislature and in the courts to change the status quo. But those efforts have so far failed.

For instance, a bill that would have removed Indiana's 80-year-old prohibition on Sunday alcohol sales died without getting a full vote in the House during the last legislative session. It was the most recent  attempt in the General Assembly to change Sunday alcohol sales.

Legal challenges also have come before the courts as companies and lobbying groups sought to invalidate state laws.

Monarch Beverage, the state's largest wholesaler of beer and wine, has been trying to overturn a law that prohibits wholesalers from distributing both beer and liquor. The Lawrence-based company challenged the statute — and failed — both in federal court and Marion Superior Court. Monarch is appealing the Marion County judge's ruling and is waiting for a decision by the Indiana Court of Appeals.

In a 13-page opinion issued Monday on the cold-beer case, the 7th U.S. Circuit Court of Appeals said grocery and convenience stores in Indiana "simply don't operate in the manner required for a beer retailer's permit." Indiana law allows grocery, convenience and drug stores to sell warm beer through a beer dealer's permit.

The state argued that liquor stores are subject to stricter regulations "designed to enhance the State's ability to limit and control the distribution of alcohol." For example, no one younger than 21 is allowed in liquor stores. Hours and days of operation also are restricted.

"Indiana explains that the goal of this regulatory scheme is to curb underage beer consumption by limiting the sale of immediately consumable cold beer," the opinion says.

The association argued that grocery and convenience stores already sell beer, just not cold beer. Such businesses also already are allowed to sell cold drinks with higher alcohol content than beer, such as wine coolers.

But the federal appeals court rejected those arguments, saying it's up to the Indiana legislature to decide whether it wants to change the law.

Grocery, convenience stores continue fight to sell cold beer

Indiana Attorney General Greg Zoeller, whose agency defended the state law in question, agreed.

"We continue to maintain that the correct place to debate any changes to Indiana’s alcohol laws should be the legislature not the courtroom,” Zoeller said in a statement.

Whether alcohol sales laws will change anytime soon is unlikely, said Andy Downs, director of the Mike Downs Center for Indiana Politics at Indiana University-Purdue University Fort Wayne.

"Until there's some sort of outcry from the public," Downs said, "I don't see a whole lot changing here."

The Indiana Association of Beverage Retailers, which supports the law, applauded the ruling.

"Indiana like many other states (has) public policy goals to limit and control the distribution of alcohol," the organization's chief executive officer, Patrick Tamm, said in a statement. "We are pleased that the court has recognized that Indiana's package stores must operate under restrictive guidelines and legislatively mandated business models."

Tamm's organization represents about 1,000 package liquor stores.

Star reporter Tony Cook contributed to this story.

Call Star reporter Kristine Guerra at (317) 444-6209. Follow her on Twitter: @kristine_guerra.

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