Iowa working to distill liquor laws

| 12/1/2005

When Iowa ’s state legislature gears up in January, Scott Weiser is hoping they’ll have liquor on their minds.

Weiser, president of the Iowa Motor Truck Association, is preparing for a fight over a plan that would have state employees hauling alcohol instead of private businesses.

It’s a fight that has its roots in post-prohibition era policy. Iowa is one of 19 states that, since the repeal of prohibition in 1933, directly controls the sale and distribution of alcoholic beverages.

Until recently, the state’s liquor warehouse – including its distribution operation – was run by a private company, J.A. Jones. Weiser said that company went bankrupt, at which point the state took over, bringing in inmates from the Mitchellville state women’s prison to work the warehouse and hiring drivers – who, of course, became state employees – to handle the distribution.

Weiser told Land Line that his group objected to this move because it excluded private trucking companies from getting the business.

“We objected to that in (last year’s) legislative session,” he said. “Those folks are taking food off the plates of my members.”

The state legislators agreed and passed a ruling that required the state to open bidding on the operation of the warehouse and the distribution of the liquor to private companies. The only catch: The state was allowed to compete in the bidding as well.

While a private company – Crystal Distributing – won the rights to manage the warehouse, the state won the bid on the rights to the distribution business.

Weiser said one reason for this was that the criteria for companies wanting to haul the liquor were such that nobody in private business could compete.

“We couldn’t have markings on the trucks, we couldn’t co-mingle product, we had to make backhauls empty,” Weiser said. “There were a variety of those things that just really made it so that it was not an attractive piece of business to bid on.”

Weiser said the state also has an unfair advantage because it has a tax-exempt status and can always offer a lower bid.

However, Lynn Walding, administrator of the Iowa Alcoholic Beverages Division, told The Des Moines Register that any private trucking company could have obtained tax-free fuel through the state to make the liquor deliveries.

But Weiss said it’s more about the principal of the thing. He said he worries about what other business the state could take over if a precedent is set here.

“We’re not talking about hundreds of jobs, there’s maybe a dozen,” he said. “But it’s bad precedent and it’s bad business.” 

– By Terry Scruton, senior writer