Walk into Madison Cellars and you’ll find empty spaces on the shelves that should be filled with bottles of wine, fifths of whiskey and other products.
Customers are quick to notice the store looks emptier than usual, said Richie Peaster, one of the owners of Madison Cellars in Madison.
“They ask, ‘Are you going out of business?’ or ‘When is this coming in? When will that be back in stock?’ You can’t tell them because you don’t know.”
Like many liquor stores throughout the state, Madison Cellars lacks inventory because the Alcohol Beverage Control warehouse, which is owned by the state but operated by Ruan Transport Corp., faces a backlog of 199,000 cases.
Chris Graham, commissioner at the Department of Revenue, said during a House State Affairs Committee meeting on Feb. 17 that additional employees have been hired to work at the warehouse in Gluckstadt, but it could take until May to get all the back orders filled.
New software that didn’t work as expected, a broken conveyor system that was not repaired and changes in the delivery system that require warehouse employees to handpick orders are blamed for the delays in getting products from the warehouse to package stores, casinos and restaurants.
Whatever the reasons for the delivery failure, Peaster knows this: “The ABC warehouse is full and my store is not. They’re way behind and there doesn’t seem to be any relief in sight.”
Liquor store owners went from having their orders delivered two to three days after placing them to “all of a sudden” the process taking three weeks, he said.
“Today (Feb. 18), they have shipped an order I placed on Jan. 22,” Peaster said.
As frustrating as the lack of products to sell is the lack of transparent communication from the ABC, Peaster said.
“We knew the warehouse would be down for a couple of days at the first of January for inventory,” he said.
Package store owners had to find out “on the fly, talking to other people” that the warehouse conveyor system was broken and on top of that, a new software system didn’t work, Peaster said.
Package store owners received a message several times through the ordering system they use that merely thanked them for their patience and let them know the warehouse was working through issues, he said.
Pat Fontaine, executive director of the Mississippi Restaurant and Hospitality Association, learned about three weeks ago that restaurant owners were having trouble getting their orders from the warehouse.
“I was made aware of the issue, but it’s gotten worse,” he said. “I have received numerous calls over the past couple of weeks. I’ve been to restaurants and they don’t have the products they normally offer. They’re losing sales.
“One restauranteur told me they were reworking their wine list on a weekly basis depending what they can find.”
Restaurants depend upon the sale of wine and spirits to stay afloat because the profit margin on the sale of food has diminished due to rising costs, he said.
By law, liquor stores, restaurants and casinos in the state are required to purchase their inventory through the Alcoholic Beverage Control Division of the Department of Revenue, which means it’s illegal for owners to cross over into neighboring states and buy what they need. Mississippi is a “control state,” meaning the state government acts as the sole wholesaler for wine and spirits.
Austin Evans, co-founder of Cathead Distillery that produces Cathead Vodka, Bristow Gin, Old Soul Bourbon and Hoodoo Chicory Liqueur, said sales representatives for his business have been texting photos of liquor stores that show “a lot of holes on the shelves.”
“It’s affecting a lot of people across the market,” he said. “We are directly impacted.”
The ABC warehouse holds products on consignment from Cathead as a vendor and Cathead gets paid when the product is shipped and ownership of it transfers.
“It helps everybody including state revenue to get product moving,” said Evans, who is hopeful that legislators will find a solution.
During the House State Affairs Committee meeting, legislators suggested ideas to get product moving, one of which was establishing a will call pickup system at the warehouse, Fontaine said.
“The issue is they don’t have enough delivery doors and shipping doors that trucks can back up into,” he said.
Another recommendation was direct shipment from wineries and distilleries to the holders of liquor licenses/permits for a period of time, Fontaine said. “I think that issue is being explored,’ he said.
Peaster said even with customers who are kind and understanding of the situation and open to products he suggests as substitutes for the ones they’re used to buying, he’s ready for a solution.
“People are growing weary and so am I,” he said. “During covid, there were times when we were waiting three or four weeks for deliveries and then we would get half a delivery and it would take another three or four weeks to get the rest of it.
“That was a national issue, and everybody knew everybody was hurting. This is not the same.”
Peaster said he expects blame to be thrown around about whether Ruan Transport or the Department of Revenue is responsible for the warehouse troubles.
“What we know is it had been working well,” he said. “Ruan essentially got everything at the warehouse back to efficient ordering and delivery.”
Peaster fears the problem could cause some package stores to go out of business.
‘If you’re in retail you need inventory,” he said. “You’ve still got to pay rent and employees.”
Construction is expected to be completed on the new ABC distribution center in Canton later this year. It will have room to store twice the inventory of the existing warehouse.
For several years, liquor stores throughout the state found it difficult to fill their shelves because the ABC warehouse was underfunded while at the same time the number of orders was rising. The onset of the pandemic saw orders skyrocket as many Mississippians turned to wine and other alcoholic beverages.
