A call for budget reductions in state agencies is expected to leave Provo and Orem without state liquor stores, forcing area residents to drive further to make their purchases, according to Vickie Ashby, spokeswoman for the Department of Alcoholic Beverage Control.
"What is really the challenge is that any store we close is profitable," Ashby said. "We have no choice. The state is not giving us enough money back to run the stores."
Ashby said the money made at state liquor stores goes into the state general fund, then the DABC must request money for the department's operating funds.
I'm devastated," Ashby said. "We are laying off employees and closing five stores." DABC will close the state liquor stores in Provo and Orem as well as one in St. George, downtown Salt Lake and in South Salt Lake.
Approximately 36 full- and part-time employees will lose their jobs to store closures, and another 110 employees will be affected with a reduction in store hours. There are a total of 45 state liquor stores with 100 package agencies like at the ski resorts. All the stores will be reduced to stay open only eight hours instead of the normal 10-hour day.
The state Auditor General's office believes even with the closures there will be little loss in the purchase of alcohol overall as people will likely travel to other cities to purchase. Provo and Orem will feel the closure effects, as will the state's school districts from money allocated to the school lunch program.
"Ten percent of alcohol sales go back to the school lunch program. That is about $28 million," Ashby said.
The closure of the Provo and Orem stores (particularly the Provo store) has Joel Racker, president and CEO of the Utah Valley Convention and Visitors Bureau, a bit exasperated.
"There is some frustration. I am opposed to it being closed," Racker said. "I'm looking at this in terms of hospitality. The two largest communities in the county may not have a liquor store. It's just not hospitable."
Racker said the decision to build two larger regional stores in Springville and Pleasant Grove happened long before this administration was in place and they will just have to deal with it. As far a conventions staying away, Racker doesn't believe the lack of a liquor store will be an issue.
"My fear is it's not just about the convention center. It's the tourists that come in every summer to the visitors center wanting to know where they can purchase liquor close by," Racker said. "The overall bottom line is the stores are profitable. Who's the brainiac who thinks we should close profitable stores? We are creating hospitality just to reverse it. It's mind boggling. It makes you scratch your head."
According to the DABC, both Provo and Orem stores are profitable operations. Provo had approximately $5.8 million in sales last year, with $2.6 million returned to the state for programs such as school lunch and other municipal programs. Orem's state liquor store had about $3.7 million in sales in 2010 and returned $1.6 million back to the state.
"The closing of any store and loss of jobs is always a sad thing," said Helen Anderson, Provo spokeswoman. "We always want people to buy locally. But the bigger impact is the perception of the community that people will have."
Provo will lose approximately $50,000 of its share in sales tax revenue from the store closure. According to Bruce Chesnut, Orem city manager, Orem will lose somewhere between $30,000 and 50,000 in sales tax as well.
"The support of tourism is going to be a challenge, and we will take a hit on the financial end of it. This does have a financial impact," Chesnut said.
"One of our biggest challenges is that determining losses is almost unmeasurable. When we close the stores, we will lose sales, particularly from the spur of the moment consumer," Ashby said.
What the DABC is hoping for through its audit is that consumers will travel to larger regional stores in Springville and Pleasant Grove. The audit reads, "The new regional store in Pleasant Grove recently opened and is 2.08 miles away from the liquor store in Orem. The new regional store in Springville is close to the existing Provo liquor store and could have potentially little effect on overall sales."