The Mississippi Legislature was unable to reach a compromise on fixing issues on distribution of wine and spirits, but the biggest piece of legislation they passed concerning alcohol policy has some retailers leery about taking the plunge.
Lawmakers passed House Bill 1135 that was authored by state Rep. Trey Lamar, R-Senatobia that allows licensed retailers to deliver alcohol to customers in their homes. The bill requires delivery drivers to obtain proof of age for customers and retailers seeking a delivery permit to pay $500 annually to obtain a permit. Delivery could only be performed in a 30-mile radius from the retailer.
The bill is now on Gov. Tate Reeves’ desk after the two chambers reached a compromise.
The big news from the session is that lawmakers couldn’t make a deal that would’ve either privatized the wholesale distribution of wine and spirits (something that most retailers don’t support) or outsourced the operation of the state’s warehouse in Gluckstadt to an outside vendor like in New Hampshire or Ohio. A proposal to spin off the ABC into a state-chartered corporation like the Mississippi Lottery Corporation was never put into legislation.
Both bills — HB 997 and Senate Bill 2806 — died in conference on March 29 when lawmakers couldn’t agree on whether to privatize distribution (as proposed in HB 997) or outsource it to a vendor (SB 2806). This was disappointing after lawmakers held several hearings over the summer to find a solution to the delivery woes brought on by a crush of orders due to COVID-19. The Alcohol Beverage Control (ABC) division of the Department of Revenue (DOR) also didn’t receive any additional funds to renovate the aging warehouse that handles all of the wine and spirits sold in the state.
The state owns a 211,000 square foot warehouse in Gluckstadt that handles about three million cases of wine and spirits annually and has a capacity of 17,000 cases. Mississippi is a control state, which means the state handles wholesale distribution of liquor and wine. According to this year’s appropriation for the DOR, it costs the state $1.65 to ship each case and $15 dollars are returned to the state’s general fund for each dollar of cost.
“The fascinating part is of all the legislation they looked at, all they could come up with was home delivery,” said David Rushing, owner of Joe T’s Spirits in Ridgeland. “No more money for ABC, which was needed. I’m glad they passed on privatization, that’s not a good plan and neither is wine in grocery stores, we (package store owners) weren’t for that. I would like to see a lot more emphasis on getting more funds to the ABC, that would really address some of the more pressing problems there.”
As for home delivery, Rushing has concerns about the legislation.
“I don’t know who is really benefitting from this,” he said.
John Skelton is the owner of Reservoir Wine and Spirits in Ridgeland and he said that some of the retailers who are permitted to do split case wholesale deliveries would likely try home delivery to retail customers. He’s not eager to give home delivery a try despite the new law.
“I know a lot of people will see the old, old school milkman coming around, picking up your old bottle, giving you the new bottle, that’s what they drum up in their heads and that’s not going to be like that,” Skelton said. “It’s hard to think that these people are going to want to just go home and pay somebody extra to deliver it to them.”
He said that while home delivery makes sense in large cities, in suburban and rural Central Mississippi it makes less sense. He also thinks the bill is a gateway for other alcohol-related legislation that lawmakers are trying to push through.
Despite lawmakers being unable to reach a deal, the good news is the supply situation has greatly improved for package store owners since last summer. That was when the Department of Revenue decided to stop deliveries to eliminate a COVID-19 related backlog but walked back the proposal under pressure from retailers.
Matt Basden, director of McDade's Wine and Spirits, told the Northside Sun that ABC has showed gradual improvement over the past few months and deliveries are taking about four to five days to reach his store. That’s a huge improvement over the nearly two weeks it took for deliveries to arrive.
He also said some products are still difficult to source, but that’s a problem due to supply at the distiller/vintner level and not the fault of the ABC.
“The ABC, you know they’ve been behind, but they’re catching up and they’re doing a pretty good job,” Rushing said. “We’re only down to four or five days for deliveries, which is very manageable and we’ve gotten used to it. We’ve gotten a lot of compliments about how full our store is even though there are a lot of things out of stock that are due to issues outside the state.”
