SALT LAKE CITY — Utah lawmakers might consider increasing the alcohol content allowed in beer sold in grocery and convenience stores as national breweries look at cutting production of 3.2 percent beer because all but two states have abandoned it.

Utah and Minnesota are the only states left selling the lower weight beer after laws in Oklahoma, Colorado and Kansas changed in less than two years. Beer sold in Utah stores contains 3.2 percent alcohol by weight.

"The 3.2 percent beer landscape is changing," Sal Petilos, Utah Department of Alcoholic Beverage Control executive director, told a legislative committee Wednesday.

Only 1.8 percent of all beer brewed in the United States is 3.2 beer, with Oklahoma consuming 56 percent of it, followed by Utah at 29 percent. As state laws change, national brewers have to decide whether to continue what would be a "specialty" item for a shrinking market, Petilos said.

Discontinuing 3.2 beer would drive up prices and limit access and variety, as well as cause a drop in sales tax revenue, he said.

Sen. Ralph Okerlund, R-Monroe, told the Business and Labor Interim Committee that many small stores rely on beer sales to stay viable.

"There are a number of businesses out in my district who will say that 40 percent of their revenue, 40 percent of their profit will come from the sale of beer," he said. "Not only would we lose tax base, we would lose a lot of those businesses that are out there that depend on this big part of their business."

Sen. Jerry Stevenson, R-Layton, said the Legislature could change the allowable alcohol content in beer, likely a tough sell among state legislators.

Dave Davis, president of the Utah Food Industry Association, suggested raising it to 4.8 percent alcohol by weight to minimize the impact.

"We don't have to sort of uncap the alcohol level all together, but by moving the alcohol level from 3.2 to 4.8, you are going to capture the lion's share of the production line beer that is out there," he said.

Davis also said staying at 3.2 might also affect tourism as people weigh whether to ski in Utah or Colorado.

Related:

Utah among few states with weak beer after Oklahoma vote

Utah is part of an ever-shrinking slice of the country that bans full-strength beer at grocery stores, and as another state abandons those limits some in the beer industry worry that Utah could be left in the cold as big breweries limit or even halt production of low-alcohol beers.

"It's one more quirky thing about Utah that is adding to a pile of other quirky things as well," he said, adding, "Did I say that diplomatically enough?"

"No, you did not," said Rep. Jim Dunnigan, R-Taylorsville, the committee co-chairman.

Discontinuing 3.2 beer would also be a burden on the Department of Alcoholic Beverage Control to fill an enormous gap for beer no longer sold in grocery and convenience stores, Petilos said.

Retail outlets sell nearly 32.5 million gallons or 94.2 percent of all beer sold in the state, compared with 2 million or 5.8 percent of heavy beer sold at state-run liquor outlets.

Utah's 21 local breweries — 20 of which make 3.2 beer — could step into the market, Petilos said.

Stevenson said state tax laws hinder small brewers from expanding. Filling the gap with local product might be difficult without a review of the tax system, he said.

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