What Tuesday’s Liquor-By-The-Drink Vote Means For Dry Counties And Low-Point Businesses

Roy Lenz, a retired farmer, owns the Brandin’ Iron in Laverne, Oklahoma. His bar is in a dry county, so he can only serve low point beer. (Jacob McCleland / KGOU)

Roy Lenz tidies the bar at the Brandin’ Iron on a Saturday afternoon. His wife, Barbara, fires up the grill, filling the place with the smell of hamburger patties, grilled onions and bacon.

“This place was built back in the late 20s, early 30s, and it’s been a bar from the late 30s, early 40s,” Roy said.

It’s only bar in Laverne, a little town of 1,344 people in Harper County in far northwestern Oklahoma.

“We’ve got burgers, nachos, tacos, quesadillas, various assortments of different wraps,” Roy said.

Harper County is one of the state’s 14 dry counties. Currently, businesses in dry counties can sell beer that’s 3.2 percent alcohol by weight. But that all changes in October. New alcohol laws approved by voters in 2016 don’t distinguish between low point and regular-strength beer. All beer will be classified the same, so businesses in dry counties won’t be able to sell it. That’s bad news for the Brandin’ Iron and  Roy Lenz, who says he can’t turn a profit on food alone.

“I’d have to major remodel and get a lot more equipment and stuff like that. And at my age I’m not wanting to really build on or keep going and get into that much work,” Roy said.

Oklahomans head to the polls Tuesday to vote on medical marijuana and to vote in primaries. Residents in all of the state’s dry counties will have an additional choice — whether or not to approve the sale of alcoholic beverages in restaurants and bars, also known as liquor-by-the-drink. Roy Lenz says Harper County voters could make or break him.

“Well, basically I will be closed on Oct. 1 if it does not pass,” Roy said.

The closure of low-point beer bars could hurt the economies of struggling small towns. Michael Shannon is the executive director of the Panhandle Regional Economic Development Coalition. Two Panhandle counties — Beaver and Cimarron — are both dry. He says his rural counties need the tax revenue liquor-by-the-drink would provide.

“These little counties that are drying up and blowing away right now are looking for ways to finance their county roads, county bridges, county hospitals, county schools. And that’s just one way … Cimarron County’s looking at trying to finance their business over there,” Shannon said.

The only beer in a dry state

Oklahoma came into the Union as a dry state. The first alcohol that was legal in Oklahoma was low-point beer, which voters approved shortly after the end of Prohibition. Until statewide prohibition ended in the 1950s, low-point beer was the only legal drink in the state.

Low-point beer is 3.2 percent alcohol by weight. This is a point of confusion because most other beer is measured in percent of alcohol by volume, or ABV. Lester Jones, the chief economist at the National Beer Wholesalers Association, says Oklahoma 3.2 beer is actually 4 percent alcohol by volume.

“All the Bud Light and Miller Lite and Mic Ultra and Coors Light and Keystone and Busch Light that’s floating around out there in the entire country is all right about 4.2 ABV,” Lester said. “There’s a lot of concern out there in the marketplace that getting rid of 3.2 beer … people will be consuming absolutely more total alcohol when it’s not really that true. The bulk of the alcohol we already consume is already ‘low point’.”

Jones says 3.2 beer makes up less than 2 percent of U.S. beer sales, and Oklahomans are its biggest consumer. Approximately 56 percent of all low-point beer nationwide is sold in Oklahoma. And Oklahomans drink it up; 86 percent of beer consumed here is low point. There are four other states with similar laws: Kansas, Colorado, Minnesota and Utah. Kansas and Colorado are also phasing out their 3.2 beer requirements.

With Oklahoma backing out, is this the end of low-point beer?

Lisette Barnes with the Oklahoma Beer Alliance says it could be.

“I think the remaining four states see the writing on the wall that they’re going to be looking at even more limited choices of beer than they did previously. So I think we kind of kicked that off, which they probably appreciated in some of those states,” Barnes said.

From the brewer’s perspective, Barnes says it won’t make economic sense to brew low-point beer for a dwindling market.

“I don’t see these big brewers shutting down their process to brew 3.2 as often as they had to in the past. And they’re certainly not going to be spending the money to be shipping it here,” Barnes said.

Lester Jones, the economist, says it isn’t cost effective for brewers to produce separate batches of beer that will be shipped and sold to two states.

“It’s the canning and the packaging,” Jones said. “All the packages and all the cans are the ones that have to be tweaked to reflect a different alcohol strength.”

Streamlining business

The sweet smell of grain mash lingers in every corner of Coop Ale Works brewery in Oklahoma City. Coop produces three low-point brands exclusively for convenience and grocery stores. One of them, called Spare Rib Pale Ale, accounts for about ten percent of sales, according to Coop’s director of marketing and sales, Sean Mossman.

“It’s our number two selling brand, and we’re not going to change the recipe when the law changes,” Mossman said.

Sean Mossman is the director of sales and marketing at Coop Ale Works. Coop will discontinue two its three low point beers in October. (Jacob McCleland / KGOU)

Coop plans to discontinue the other low-point beers so the company can concentrate on its biggest seller, a full-strength IPA called F5.

“F5 is such a beast in what we do. I mean, there are times we make decisions not to brew F5, even though we know we’re going to run out of it because we want to make sure we don’t want to run out of Briefcase, and Briefcase is 2 percent of what we sell and F5 is 65 percent of what we sell,” Mossman said.

Back in dry Harper County, bar owner Roy Lenz doesn’t know if he will change his business very much if liquor-by-the-drink passes.

“I’m not putting the full whiskey in, don’t plan on it ‘cause I’m getting a little too old to play bouncer anymore,” Lenz said.

But customers could come in for a cold, full-strength brew.