Small store owners upset over dairy ban

House of Hanson and Harvard Market, which opened before 1996, can sell dairy products.

Got milk? Not at Hanana Foods.

Because of an obscure city licensing ordinance, the Dinkytown shop is barred from selling any dairy products, and that hinders sales, they said.

“We can sell cereal but not the milk to put on the cereal, and we can sell you pasta but no eggs, cheese, milk or yogurt,” said Jessy Smithgosen, a Hanana Foods manager. “What’s the point? This doesn’t make any sense at all.”

The regulation – enacted in 1996 – set a 2,000-square-foot size minimum to be licensed as a grocery store. Hanana Foods is only 700 square feet and can only qualify for a confectionary license. Despite the regulations, however, the store stocks a small selection of milk products in a cooler toward the back of the store.

Nearby competitors such as House of Hanson and Harvard Market – which are similar in size, clientele and selection – opened before 1996, so they were grandfathered in as grocery stores and can sell dairy products.

Minneapolis director of licenses and consumer services Jim Moncur said at the time, the ordinance was aimed to stem a tide of area storefront convenience stores that were magnets for drug deals and mostly not financially viable.

Moncur said the Minneapolis City Council based the 2,000- square-foot rule on the size of

7-Eleven and Super America stores, which he said were successful and did not attract as many problems.

“That seemed to be enough room to be a retail food store with adequate amenities, not just a place to hang out,” Moncur said.

He said he was not familiar with specifics of the Hanana Foods case but several similar stores have complained about the ordinance.

“It’s not good for the store, and I don’t see what (selling dairy products) would hurt,” said Mohamed Bieas, a manager for Campus Foods, which shares an owner with Hanana Foods. “The city should be more reasonable because students are just going to go somewhere else.”

The Campus Foods store is over 2,000 square feet, so it is licensed as a grocery store and is allowed to sell dairy products.

Blake Graham, interim planning director for the Minneapolis Planning Commission, said although he was not responsible for that particular precinct’s commercial licenses, he heard that it was “a fairly esoteric licensing area.”

Skott Johnson, president of the Dinkytown Business Association, said neither Hanana Foods’ owner, Ramzi Benbelgacen, nor any other proprietor had formally complained to him about the regulation yet.

Bieas said formally challenging the regulatory panel was not worth the trouble.

“We’re not going to fight the city,” Bieas said. “It’s easier just to go somewhere else, but I still think that if you’re going to practice law, everyone needs to be treated the same. It needs to be equal.”

– Nate Denay contributed to this report.