The Law

Alcohol and Logic Clearly Don’t Mix by Ron Davis A difference of opinion over the legal definition of “beer” has caused a bellyful of problems for two tenants of a Minnesota shopping center. The two tenants—Supervalu, Inc., and Chalet Liquors, Inc.—lease space at the Crystal shopping center under long-term contracts. And the dispute over the beer definition arose because of a restrictive agreement in the Supervalu lease. Supervalu had pledged that it would not sell liquor or other alcoholic beverages “except for beer with an alcohol content of 3.2 percent.” Both of the tenants’ leases, however, were executed in 1994—before the advent of so-called flavored malt liquor. (Those products include Bartles & Jaymes, Bacardi Silver, Zima, and Skyy Blue, none of which contain hops, a distinguishing ingredient of beer.) When those products became available to consumers, Supervalu started selling them, pointing out that all met the 3.2-percent alcohol criterion. Chalet Liquors nevertheless sued. In response, Supervalu explained its position with a syllogism: “Beer is a malt beverage. “All of the flavored malt liquors are malt beverages. “Therefore, flavored malt liquors are beer.” A Minnesota court rejected that argument and ruled that Supervalu must stop selling the flavored malt beverages. Supervalu appealed. A Minnesota appellate court upheld the lower court ruling, explaining, “Applying a common sense approach to the definition of beer, we find that an ordinary consumer ordering or looking to purchase a ‘beer’ would never expect to receive a Bartles & Jaymes cooler, or any of the similar products…. There is ample support to show that the common meaning of beer, as used in the lease restriction of Supervalu, is an alcoholic beverage flavored with hops and does not include flavored malt products.” (Chalet Liquors, Inc. v. Supervalu, Inc., 2004 WL 885356 [Minn.App.]) Decision: April 2004 Published: June 2004