Above: Legacy Wine and Spirits, Little Rock (Photo by Jamison Mosley)
Ever gone on a vacation in Arkansas only to find that the county you are visiting is dry? It might be quite a drive back to a liquor store on the county line of the nearest wet county. Or what about buying a six pack of beer or a bottle of wine on a Sunday? It can be hit or miss even in the same county over whether alcohol sales are allowed on Sundays.
The crazy hodgepodge of liquor laws in Arkansas dates to an earlier, more conservative age when a lot of people opposed liquor sales in their county. Arkansas has 46 wet counties and 29 dry counties. The two counties that most recently voted to go wet in the 2022 election were Hot Spring and Polk. Other counties that voted to go wet over the past few years include Sevier, Van Buren, Sharp and Randolph.
Bill Paschall
“The two big issues we hear about from consumers are dry counties and Sunday sales,” said Bill Paschall, a consultant with United Beverage Retailers of Arkansas. “UBRA’s position on each of those is that the local communities should make determinations as to whether an area is wet or dry, and local communities should decide whether they want Sunday sales. Recent history shows a number of counties have chosen to go wet, and many towns and cities have opted to allow Sunday sales when the decision is placed in voters’ hands.”
Scott Hardin
But it can be a steep road getting voter approval for alcohol sales in a county. In order to place a wet/dry vote on the ballot, 38 percent of registered voters in that county must sign a petition. Only then do voters get to choose whether the county goes wet, said Scott Hardin, spokesperson for the Arkansas Alcohol and Beverage Commission (ABC).
Some people have found a way to get “wet” in dry countries. For example, Faulkner and Craighead counties are dry but have a large number of private clubs that serve alcohol.
“You can’t purchase a six pack at a convenience store, but there are a large number of locations where you can have a drink,” Hardin said. “These are the wettest dry counties.”
There are 21 cities that have approved Sunday sales. With the exception of one community (Arkansas City in Desha County), they are concentrated in northwest and north central Arkansas.
“We do wonder why other communities across Arkansas are not pursuing this, especially from a tourism perspective,” Hardin said. “Larger communities like Bentonville and Rogers have proven it is possible.”
Cities with Sunday sales include Briarcliff, Mountain Home, Norfolk, and Salesville in Baxter County; Bentonville, Rogers, Gentry, Garfield, Pea Ridge and Avoca in Benton County; Diamond City and Lead Hill in Boone County; Eureka Springs in Carroll County; Arkansas City in Desha County; Altus, Ozark and Wiederkehr Village in Franklin County; Pyatt and Summit in Marion County; and Springdale and Tontitown in Washington County.
Mervin Jebaraj
Legal retail alcohol sales are part of contemporary economic development environment, said Mervin Jebaraj, director for the Center for Business and Economic Research at the University of Arkansas.
“I think in general, when you think of the kind of economic development that is popular today, it has a lot to do with building places where people want to live,” Jebaraj said. “You need the amenities people are looking for, including social places like restaurants and bars. Those are harder to operate in dry counties than wet counties. I think in people’s minds, the legal framework around dry counties is a bit archaic in 2023. Liquor is still being consumed. You just aren’t getting the economic benefit of it because the sales and sale taxes are being transferred to neighboring counties where their cities, counties and schools benefit.”
Stan Hastings, CEO of Moon Distributors in Little Rock, doesn’t have any issues with Arkansas liquor laws. He said if you look at how restrictive state laws are across the country, Arkansas sits right in the middle.
Stan Hastings
“I don’t think the laws are convoluted at all,” Hastings said. “We have very good laws for consumers, wholesalers and retailers. There are more than 25,000 alcohol items available in Arkansas to a consumer. That is a great selection. As for dry counties, that is an individual decision for people in that county. I don’t ever get involved with those. It has been proven repeatedly that the bar is not set too high. Counties go wet in almost every election cycle, so it is obviously not that big a deal.”
Hastings feels the same about Sunday sales; if local residents want it, they can approve it with a vote. Arkansas is ranked 48th in the country in consumption of alcohol, but he thinks that has to do with it being a conservative state — not the liquor laws.
“Arkansas is not the only state with dry counties, and less than half of the U.S. states have Sunday sales,” Hastings said.
He does have an issue with online liquor sales, because online retailers don’t have to follow the same regulations as in-state retailers. Online retailers don’t have to be permitted by the state and don’t pay taxes, for the most part.
“I don’t think online retailers should be held to a lesser standard than a retailer who operates by the laws in the state, pays taxes and has very specific penalties for breaking the law,” Hastings said.
John Akins, owner of Legacy Wine and Spirits in Little Rock and president of UBRA, also has a problem with online sales.
John Akins
“Shipping alcohol in and out of Arkansas is illegal, but a lot of people order products online and have it delivered,” Akins said. “Big outlets like Wine.com ship into Arkansas knowing it is illegal. Yet, retailers are held to the law and can’t ship alcohol out. If at some point it becomes legal to ship into Arkansas, retailers want to make sure they can ship out to make that fair.”
Another major concern for retailers is competition from big-box retailers. Walmart sells beer and wine, and Costco in Little Rock and Sam’s Club in Bentonville have licenses to sell liquor. Akins said this creates a disadvantage for the retail liquor stores.
“They can sell alcohol and not have to worry about margins because they make their money off merchandise items that liquor stores can’t sell,” Akins said. “It is a very uneven playing field. What should be done? It is a hard question. I don’t think box stores should be able to sell liquor. Right now, the big-box stores are supposed to meet requirements that they have a separate store with a separate entrance and staff, but we think they will come to the legislature next year to get it approved to sell spirits in their stores.
“There would be no way for small liquor store owners to recover from that. The big-box stores make money off tires, milk, toilet paper and many other items. Our business is not set up for that. Legally, the only thing we can sell is beer, wine and spirits.”
Arkansas also doesn’t allow liquor stores chains. One person can hold only one license.
Akins said retail liquor stores like Legacy and many others are community-oriented, including being generous with donations to charities.
Retail liquor stores like Legacy in Little Rock have the built-in advantage of personal service, but Akins said big box stores that sell liquor have their own unfair advantages. (Photo by Jamison Mosley)
“The more money we lose to the big-box stores, the less we are able to do that,” Akins said. “If those same charities go to big-box stores, they probably won’t get a donation of wine and spirits.”
When laws were changed in 2016 to allow wine sales in big box stores, it immediately took 20 percent off retail wine sales from liquor stores. Akins said if liquor is allowed to be sold in grocery stores — which is a likely possibility — it is going to hurt the retail liquor stores even more.
Alcohol sales create a lot of tax revenues, but the exact amount is not known because permit holders are not required to report sales to ABC. As a result, ABC doesn’t have any statistics on total sales. However, permit holders that produce alcohol (wineries, breweries, distilleries) are required to report annual production totals.
In 2022, the DFA’s Revenue Division reported the following in tax revenue: beer excise tax, $5.1 million; 3 percent liquor excise tax, $16.2 million; 4 percent additional mixed drink tax, $6.9 million; state mixed drink tax collection, $19.4 million. There are also wholesale taxes on beer, wine and liquor.
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