IOWA CITY, Iowa (AP) — The government agency that regulates liquor sales in Iowa said Thursday it has backed off a major price increase for some products that it proposed to reduce heavy drinking.
Iowa Alcoholic Beverages Division spokesman Tyler Ackerson confirmed that distributors were notified last week of the price increase that was planned for July 1.
But he said the notice created negative “feedback from suppliers and other stakeholders” and that the agency has dropped the plan indefinitely.
Ackerson said distributors were concerned about the economic impact, particularly during the coronavirus pandemic. The planned increase had already been delayed from May 1 to July 1, after it was initially floated in February.
Ackerson said the agency still believes that the plan is good public policy and that it will be revisited later.
Bars and restaurants that are facing a loss of business from the coronavirus would have been forced to pay higher prices for many products under the change.
The division's notice said that it had decided to set a minimum unit price for liquor based on bottle size and alcohol by volume.
The notice said that research has shown such pricing “can lead to a reduction in heavy consumption of alcoholic beverages, as well as a reduction in alcohol-caused deaths.”
Supporters say such plans can make sure that liquor isn't too cheap and that its price factors in societal impacts of drinking.
A notice released by the agency to The Associated Press under the open records law said that a bottle of Castillo rum would have increased from $12.50 to $13.81, or by 10.5 percent.
Another distributor said the plan would increase the price for a popular 1.75 liter bottle of vodka from $13.49 to $17.99.
The agency is Iowa's exclusive liquor wholesaler, meaning that it buys liquor from suppliers and can mark up the price by 50% before selling it to retailers, such as grocery stores, liquor stores, bars and restaurants.
Bottles of Black Velvet whiskey, Captain Morgan rum and Hawkeye Vodka are among the most popular liquor products in Iowa.