This Utah liquor store owner closed up shop instead of signing a new state contract she says would’ve drained her profits — is state ‘retaliation’ to blame for rural communities running dry?

The date above the counter reads June 21, 2004 and offers a reminder of the legal drinking age. Now June 21 holds new weight: June 21, 2024 was the last day customers could buy alcohol in Delta or anywhere in Millard County.

Her own son too had been forced to close the store he operated in neighboring Fillmore — an ironically named spot for a place that’s now run dry.

“My children grew up here,” Maxfield told FOX 13 News. “It’s been part of their lives.”

Across the state, about a dozen rural liquor stores, like Maxfield’s, have shuttered, leaving communities and small business owners scrambling.

How a contract change sparked a business breakdown

That closure and others like it across rural Utah are the result of a dispute between small-town and rural liquor store operators and the Utah Department of Alcoholic Beverage Services (DABS).

In January, DABS issued new contract terms for “package agencies,” which are state liquor stores run by private individuals in rural areas. For operators like Maxfield, the new terms weren’t just tough, they were completely unrealistic.

“Several were very concerning,” Maxfield said.

One of the biggest issues? Credit and debit card fees.

“Those merchant fees would now be passed on to me,” Maxfield said, guessing the cost to be about $24,000 per year.

“To put that in perspective,” she added, “last year, my take-home pay after taxes and expenses was $30,000.”

DABS solution to the issues the new credit and debit card terms presented were dismissive, Maxfield said.

“They told me I don’t have to take credit cards if I don’t want to,” she said. “‘Just don’t take cards.’ But that creates its own set of problems.”

Tourists rarely carry cash and Maxfield didn’t want to keep large amounts of money in the store for safety reasons.

DABS also dictates prices. Maxfield wasn’t allowed to negotiate the terms or raise rates to offset new costs and she wasn’t given a chance to negotiate.

Maxfield is one of several plaintiffs in a lawsuit against the state, arguing that Utah has misclassified package agency operators as independent contractors rather than employees.

The group’s attorney, Erika Larsen, believes the contract changes are retaliatory.

“Our contention is it is a direct and clear retaliation,” Larsen said.

She says the state previously required package agencies to use state-managed point-of-sale systems — a key point in their lawsuit to demonstrate employee-like control.

“Because this lawsuit has been filed, [DABS administrators] have been unwilling to work with any of the… package agents on this,” Larsen said.

DABS declined an interview but said the new rules give more “autonomy” to the operators.

In a statement, DABS spokeswoman Michelle Schmitt said the department is “meeting with local economic development and other officials” to find new contractors for the empty stores. Some locations, such as Kanab, Helper and Kamas, are still pending, but Fillmore, Milford and Delta remain without liquor outlets.

The ripple effects are already being felt.

At Curley’s Lounge, a bar just down the street from Maxfield’s closed store, owner Amanda Stanworth now has to drive 50 miles just to restock.

“I know it’s going to cost me at least $20 just for gas a week to go over there,” she said. “Plus, I have to pay for somebody else to come and work for me while I go over.”

She’s also had to turn away customers looking for basic items she legally can’t sell.

“She said, ‘I just need a cup of white wine to cook my chicken dinner for tonight,’” Stanworth recalled.

Steps business owners can take in similar situations

The closures in Utah’s rural liquor stores are a case study in how fragile small business models can be when contracts, regulations and outside control suddenly change. Here are four key lessons for small business owners:

1. Know your break-even point

When Maxfield was told she’d have to cover $24,000 in new credit card fees, she immediately realized it would slash her take-home earnings by over 80%, leaving her with one choice: to close down.

Make sure you understand your margins and that you have clear bookkeeping. A single policy or supplier change can throw your business underwater overnight.

2. Watch for contract changes

Maxfield said DABS refused to negotiate or even discuss alternatives.