A line was wrapped around the new Costco in Little Rock as early as 7 a.m. Wednesday, Costco’s first day of operations in Arkansas.
But not everyone is happy about the business’s presence. A coalition of local liquor store owners has been working to get Costco’s liquor license repealed.
While the Costco chain already had a license to sell beer and wine, the retailer was awarded a retail liquor license by the state Alcoholic Beverage Control (ABC) board. This license allows the store to sell all kinds of hard liquor and spirits, instead of only beer and wine.
Scott Hardin, the spokesperson for the ABC, outlines the process and rules.
“In terms of beer and wine permits, Costco had already submitted an application for the main store,” Hardin said. “That was previously approved. This [the hard liquor license] was a separate request.”
Hardin explained that for every 7,500 residents in a wet county, the county is allowed one retail liquor license. If the population goes up by 7,500 in a county, a new liquor license will become available.
Costco, however, bought the assets of an existing liquor store, and the request to the ABC was to transfer the rights of the existing permit. Costco was allowed to assume the permit of Stagecoach Wine & Spirits.
Of course, this impacted the layout of the store as well as entrances. A retail liquor permit can be operated in a designated space only as a retail liquor permit. This means that retailers such as Costco would need to have a separate entrance for dedicated space to hard liquor as well as a separate entrance for dedicated space to retail wares.
“For the purposes of rules and regulations and to be in compliance, it has to be a totally separate space,” Hardin said.
Hardin said the only other retailer operating a retail liquor license on-site is a Sam’s Club location in Northwest Arkansas. The remaining permits are liquor stores that aren’t associated with retail chains. Despite opposition from some locals who argued that this availability would hurt local liquor stores, the ABC proceeded with the Costco permit.
United Beverage Retailers of Arkansas, a statewide organization of liquor store owners led by Johnny Akins, is organizing legal action to repeal the decision by the ABC to grant Costco a liquor license.
However, Judge Alice Gray noted in a three-page court ruling issued on Monday that the petition filed by the group July 16 is insufficient. The ruling said there were no illegitimate grounds on which Costco received the liquor license, and that the United Retailers group failed to notify Costco and the appropriate state agencies for litigation.
Mike Shannon, Costco’s attorney, noted in a response to the ruling that the United Retailers’ complaints were already determined to be illegitimate when the ABC approved Costco’s liquor license.
David Bevans, the owner of Legacy Wine and Spirits, has been outspoken against Costco’s liquor license. He argues that the retailer would push their private label products on customers, which would lure customers away from local liquor stores and create unfair competition.
Phil Brandon, President of Rock Town Distillery, also has voiced opposition, stressing his support of “mom and pop” liquor stores, and that it’s unfair to expect them to compete against a large retail chain.
However, the petition to court-order the liquor portion of Costco by the United Retailers states that the city is ineligible for another liquor store. The petition states that Little Rock has 56 retailers licensed, which is 30 more than the law allows for a city of Little Rock’s population, with 20 of these liquor stores being within six miles of Costco. Additionally, the United Retailers argue that they aren’t allowed to sell non-liquor related merchandise, while Costco can sell both.
A company representative said Tuesday that Costco expects to make $250,000 in sales in its first few weeks of operations.