More states are turning away from requiring low-point beer—or beer with 3.2 percent alcohol by weight—in grocery and convenience stores. Lawmakers, store owners and the state’s liquor control agency are wondering what will happen to Utah’s beer market if big breweries like Anheuser-Busch and MillerCoors decide to end production of low-point beer because demand is shrinking.
Department of Alcoholic Beverage Control (DABC) Director Sal Petilos told the Utah Legislature’s Business and Labor Interim Committee Wednesday that by 2019, the national demand for low-point beer will have dropped from 1.8 percent of the national beer market to “about .6 percent” after Colorado, Kansas and Oklahoma recently moved to allow stronger beer in grocery and convenience stores.
“The question becomes then, ‘will the brewers continue to produce 3.2 beer when the market is getting so much smaller?’” Petilos said.
“They will do the math” about brewing specialty low-point beer, he said, adding that at this point “there’s a lot of uncertainty.”
Utahns consume about 33 million gallons of 3.2 beer each year, purchased either at grocery and convenience stores or on tap in bars and restaurants.
Low-point beer accounts for 94 percent of total beer sales in the state, Petilos said.
Rep. Gage Froerer (R-Huntsville) noted that if national brewers do end production of low-point beer, local breweries could ramp up production and attempt to meet demand.
“There is a willingness, but do they have the capacity?” Froerer asked. “That’s a pretty large volume for some of these small (brewers).”
If major breweries decide to completely end production of 3.2 percent beer and ship only higher-point beer to Utah, it could only be sold at DABC stores. Petilos said that could overwhelm the agency with an increased workload and need for storage space. He said the DABC does not have the capacity to store and sell all that product.
Consumers would be impacted too.
“There would be limited access as well as a loss of convenience on the part of consumers,” Petilos said.
Sen. Jerry Stevenson (R-Layton) asked about possibly raising the state’s limit on alcohol content allowed in stores.
“Certainly, one of the things we can do here is change the law or change the amount of alcohol we allow to be sold” through convenience and grocery stores, Stevenson said.
Petilos said if national breweries ultimately decide to end production of 3.2 beer, it will be up to the state legislature to decide whether or not to allow stronger beverages to be sold in stores.