Anheuser-Busch warns Utah it may start dropping 3.2 beer brands from store shelves

SALT LAKE CITY - It kind of reads like a breakup letter to Utah's beer drinkers.

Anheuser-Busch, a part of the world's largest brewery, has put Utah beer wholesalers on notice that in 2018, there may be fewer brands on store shelves as it stops making 3.2 beer. That's because Oklahoma, Colorado and Kansas -- who represent more than 60% of the total 3.2 beer drinkers in America -- are all moving to sales of heavier brews in 2018 and 2019.

Beer on sale in a grocer store in Salt Lake City. (Photo by Ben Winslow, FOX 13 News)

"Once the changes take effect, Utah will be the largest consumer of 3.2% ABW beer, and 3.2% ABW beer will make up only 0.5% of the entire beer sales in the United States," the Dec. 1 letter, obtained by FOX 13, states.

"Given this reality, we are beginning a process to evaluate our 3.2% ABW beer portfolio, including considering package reductions up to 40% of those currently offered to Utah consumers. This would mean a decline from 113 packages to less than 70, and going from a range of 20 brands to 12."

Put another way, Anheuser-Busch said, the reduction in projects means that Utah consumers would be offered less than 6% of the packages sold to the rest of the nation. The letter does not state which brands, from Budweiser and Michelob to Shock Top, it could potentially drop.

"MillerCoors is telling me basically the same thing that Anheuser-Busch has been stating," Jim Olsen, the president of the Utah Beer Wholesalers Association, told FOX 13. "They're looking at it and there will be some reductions in the number of products they produce."

The Utah State Legislature has been looking at moving higher point beers out of state-run liquor stores and into grocery and convenience stores. It would require a change to the legal definition of "beer." Utah's Department of Alcoholic Beverage Control has told lawmakers it could not handle the increased customer volume as people flock to state stores for heavier brews.

Still, if lawmakers don't drop 3.2 beer, the head of the DABC commission believes it would benefit local brewers.

"I think it's a boon to the craft beer industry in Utah to fill that void, and they can do it very well," said DABC Commission Chairman John Nielsen. "But that's entirely up to the legislature if they want to give more leeway for heavy beer to be sold in grocery and convenience stores in Utah. I just don't know what they're going to do."

Olsen said he doesn't believe Utah beer manufacturers could handle the drop in sales from big names like Budweiser, Coors and Miller.

3.2 beer for sale in a Salt Lake City grocery store. (Photo by Ben Winslow, FOX 13 News)

"When you're talking 32 million gallons of beer sold in Utah, the craft brewers just don't have the capacity or physical facilities to produce that kind of volume," he said.

Lawmakers have been looking at the problem. Sen. Jerry Stevenson, R-Layton, said he and House Majority Leader Brad Wilson, R-Kaysville, visited grocery and convenience stores recently to talk about heavier beer sales.

But Sen. Stevenson said there is some fatigue on Utah's Capitol Hill to engage in another debate over alcohol policy. Last year, the state legislature passed a massive liquor bill that did, among other things, tear down "Zion Curtains" that prevented you from seeing drinks made in restaurants.

Sen. Stevenson said they have a little time to address it (Oklahoma's law change takes effect October 2018), but he acknowledged the legislature would hear from angry beer drinkers if their favorite brands vanished from store shelves.

"That's very possible it may not be handled this year," Sen. Stevenson told FOX 13. "And yet, I'm not sure it makes a lot of sense to push this until we have a -- let's call it a 'violent market reaction' to not having products on the shelf."