Minnesota Government Shutdown Affecting C-Store Staples

MINNEAPOLIS -- As lawmakers in Minnesota continue to battle over the state's budget, convenience stores are feeling the effects of the state's government shutdown.

Of concern today is whether or not the state will have enough tax stamps for cigarettes. According to Minnesota law, a tax stamp must be on cigarette packs in order for them to be sold. However, with the shutdown, the tax stamps cannot be purchased, the Associated Press reported.

Currently, the wholesale distributors have cigarettes with the stamp in stock, but at least one news report noted that those supplies could very well run dry if the budget battle continues through Labor Day.

"If we run out of (stamped) cigarettes, we'll go out of business," said Tim Smith, a buyer at Granite City Jobbing, which supplies cigarettes from Rochester to Hibbing. Smith told the Austin Daily Herald that Granite City took action prior to the shutdown by stockpiling stamps. "We purchased as much as we could -- it's not cheap to buy a roll of stamps, like $50,000 or something per roll."

The concern over cigarettes comes a day after news that MillerCoors LLC may have to pull 39 brands of its beer from bars, restaurants and stores in Minnesota because it failed to renew brand-labeled registrations before the government pulled the plug on July 1.

However, the brewing company said it filed the necessary paperwork before the shutdown, according to AP. MillerCoors spokesman Julian Green said the company received a letter June 30 informing them their brand-label registrations had expired. Under provisions of a state statue, no brands may be manufactured, imported into or sold in Minnesota unless the brand label was registered and approved. MillerCoors had already submitted paperwork about the registrations, but it was filled out incorrectly.

"We had not been notified that the paperwork was inadequate," Green said. "… We received this particular letter on June 30, which was the date of the government shutdown." MillerCoors is currently trying to work with the state to find a resolution, he added.

Minnesota residents are not the only ones feeling the pinch of the shutdown. As the summer vacation season kicks into high gear, travelers to the state are facing problems of their own. While the closing of highway rest stops could spell good news for travel centers like Pilot Flying J and TravelCenters of America, if tourists decide not to travel elsewhere, c-stores could see less foot traffic.

There is one benefit to the budget showdown, but it is being felt by stores across the border in Iowa. Since the crisis has shut down Minnesota's state lottery, retailers in Iowa along that state's border with Minnesota are reporting a spike in lottery sales.

"We have checked with locations in a few different communities that are along the major highways that run between Iowa and Minnesota, and stores there are seeing an increase in Iowa Lottery sales," Iowa Lottery Vice President Mary Neubauer told the Des Moines Register last week.

The end could be in sight, though. According to AP, Minnesota Gov. Mark Dayton offered major concessions today as he tries to end the government shutdown, dropping his quest to raise taxes.

In return, Dayton, who is a Democrat, said the Republicans must drop a list of policy changes and their plan to reduce the state workforce by 15 percent. In exchange, he would sign off on a Republican proposal that would raise $1.4 billion, half by delaying state aid checks to school districts and the other half by selling tobacco payment bonds, the news outlet reported.