Liquor store rule change upsets business owners, prompts lawsuit

Posted at 5:53 PM, Mar 28, 2017
and last updated 2017-03-28 19:17:32-04

GRAND RAPIDS, Mich. -- The Michigan Liquor Control Commission is accused of secrecy and violating state law after allegedly failing to hold a public hearing before repealing a rule that's been around since 1979. The rule requires liquor stores to be at least a half mile apart.

"It really came to us as a shock that this longstanding rule is going to be repealed," Rishi Makkar, owner of Rishi's International Beverage, said.

He believes the rule will impact businesses like his as well as local communities.

"There's a host of issues involved with easing up on regulation," Makkar said.

He feels communities face the threat of over-saturation. That means too many liquor stores within a several mile radius, which he said will not only lead to a cut in existing business's profits but also will affect social concerns, like unethical clerks selling to minors.

"As family owners, we're here day in and day out to make sure that we're upholding the law and make sure that we're dispensing the beverages according to the law," Makkar said.

He continued, "If every gas station on every corner and every institution is allowed to carry beer and wine, and the liquor control commission doesn't have the resources already to successfully regulate the market, how is it that by adding thousands of new licenses we'll be able to successfully regulate the industry?"

Makkar said there's hypocrisy in the system. The state is lifting regulations on liquor store proximity while still controlling the distribution and price of liquor.

"The argument that I generally hear is, everything should be a free market. That's a fair argument. But how can you have a free market in a regulated industry?" he questioned.

"We don't need more independents (stores) or more liquor stores or more beer and wine stores. We need the good ones that are doing their job to survive," he said.

As a result of the rule change and how it was handled, the Associated Food and Petroleum Dealers filed a lawsuit against the Michigan Liquor Control Commission. The commission declined to comment because of the pending litigation.​