MINNEAPOLIS—State parks, horse-racing tracks and the state Capitol are all closed because of the government shutdown here. If the budget standoff lingers, the neighborhood watering hole could be next.
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Leah Millis/ Star Tribune
Ari Mlnarik serves a customer Tuesday at the Ugly Mug, a Minneapolis bar that can't buy more alcohol.
More than 300 bars and liquor stores can't buy beer, wine or liquor to sell to consumers because their $20 alcohol-purchasing licenses, known as buyer's cards, have expired, a casualty of the July 1 shutdown. For some proprietors, inventories are dwindling and anger is rising.
"This is beyond the realm of anything I ever thought in my wildest dreams," said Trevor Berg, a liquor-store owner in Walker, Minn. With his annual buyer's card expiring Sunday, he is borrowing cash from friends to buy as much beer and wine as he can get his hands on now.
Meanwhile, state officials told MillerCoors LLC, the second-largest beer maker in the U.S. behind Anheuser-Busch InBev NV, that it must remove all 39 brands of its beer from shelves statewide because its $1,170 brand-label registration fee wasn't processed before the shutdown. The brewer says it is trying to negotiate a resolution with state authorities.
Minnesota's government screeched to a halt after Democratic Gov. Mark Dayton and Republican lawmakers failed to close a projected $5 billion funding gap in the state's coming two-year budget.
Retailers cannot renew their buyer's cards during the shutdown, said Doug Neville, spokesman for the state Department of Public Safety. The cards—licenses to buy from a wholesaler beverages that have more than 3.2% alcohol—already have expired for more than 300 businesses, and if the shutdown reaches Aug. 1, that number will rise to 424, he said.
Minnesota Booze
Bars and other alcohol retailers: approximately 10,000
Barrels of beer sold in 2010: 3.5 million
Per-capita beer consumption (ages 21 and older): 28.7 gallons a year (national average: 29)
Biggest beer suppliers: Anheuser-Busch InBev (45% of market); MillerCoors (36%)
Sources: The cities, Minnesota Department of Public Safety, Beer Institute, Beer Marketer's Insights newsletter
Municipalities and counties are also unable to grant or renew liquor licenses without information from furloughed state employees, Mr. Neville said.
Enforcement of the alcohol sales laws continues, he said.
Erik Forsberg, owner of the Ugly Mug bar in Minneapolis, paid his fee last month and has a stamped receipt to prove it.
But when the government shut down, it stopped sending out cards in the mail. Mr. Forsberg normally purchases alcohol weekly for the bar, which has 21 craft beers on tap and is near Target Field, home of the Minnesota Twins baseball team.
At a court hearing Tuesday on shutdown issues, an attorney for Mr. Dayton suggested bars purchase a low-alcohol beer— "3.2 beer"—sold in Minnesota and a few other states. It doesn't require a buyer's card.
But Mr. Forsberg said his customers don't want that product, and even if they did, distributors don't stock enough. If the shutdown drags on, he will start to run out of some beers and may have to lay off some of his 25 employees, he said. "It's not about drinking," he said. "It's about jobs and tax revenue."
One of Mr. Forsberg's regular customers, Richard Martenson, blasted the governor and state lawmakers as he ate a steak-and-eggs lunch Wednesday. "For political purposes, they're destroying a lot of businesses and a lot of lives, just to make a point," said Mr. Martenson, a 62-year-old software engineer.
In Walker, a town of 900 about 190 miles north of Minneapolis, Mr. Berg has borrowed a delivery van to make a big purchase of Busch Light, Coors Light and other beverages before his buyer's card expires Sunday. But he said he would have to close Hoss' All American Liquor as soon as mid-August if the government shutdown continues and he can't buy new inventory.
"At this point, we have to buck up and buy as much as we can," said Mr. Berg, who lives at his store to keep costs down.
Liquor store owner Dennis Pursley has a different problem: "I can buy the stuff, but I can't sell it."
Months ago, he sent in paperwork on time to renew his city-issued liquor license, but when St. Cloud, Minn., officials sent his application to the state for certification, it never returned.
For 13 days, he has kept his store open to sell cigarettes and soda, but has turned away hundreds seeking booze, he said. He estimates he has lost $10,000 to $15,000 in sales.
"I can handle a few more weeks but after that I either gotta open up illegally, which I don't want to do, or I just gotta shut her down," Mr. Pursley said.
MillerCoors, a joint venture of SABMiller PLC and Molson Coors Brewing Co. that controls nearly 30% of all beer sales in the U.S., sent $1,380 to renew its brands before a June 13 deadline. But the state said that was $210 too much and sent it back. MillerCoors sent the proper amount—$1,170, or $30 per brand—and it was received June 27. Although the shutdown didn't begin for another four days, the MillerCoors application "didn't arrive in time to be processed," said Mr. Neville, the state Department of Public Safety spokesman.
Now the company's products "need to be" removed from shelves, Mr. Neville said, but the state isn't sure how.
MillerCoors spokesman Julian Green said Wednesday: "As of today, we are selling beer in the state. We're working with the state to hopefully bring this to resolution."
—Melissa Korn contributed to this article.
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