Plans for a new Alcoholic Beverage Control warehouse that the Legislature authorized to be located “on a suitable site within 50 miles of the state Capitol building” are moving ahead.
“The Department of Revenue has been looking at different sites around the metro area,” said Trey Lamar, a Republican who represents District 8 (Lafayette and Tate counties) in the state House of representatives and chairs the House Ways and Means Committee.
The Department of Revenue must have a site for the new warehouse and a construction contract for the facility executed by October, he said.
The Alcoholic Beverage Control, part of the Mississippi Department of Revenue, is responsible for the wholesale distribution of wine and liquor to package stores and restaurants in the state.
Ruan Transport Corp., which is based in Des Moines, Iowa and specializes in transportation, warehousing and logistics, began operating the ABC warehouse, located in the South Madison County Industrial Park in Gluckstadt, in June 2023 after winning the state contract.
For several years, liquor stores 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.
The hiring of Ruan Transport was expected to help with the logistics problems and the construction of a new, modern warehouse will make more room available for storage.
“The biggest complaint is that the existing facility is old and not big enough to meet the demand,” Lamar said. “The ceiling is not tall enough. There’s not enough floor space and the facility is not equipped with the modern equipment it needs.”
In 2022, the Legislature authorized $55 million in state revenue bonds that could be issued to plan, build a new administrative building and warehouse and equip it. After building materials and construction costs increased, the Legislature this year authorized an additional $40 million in state revenue bonds for the project, Lamar said.
Last year, the state implemented what is known as a bailment fee on each case of liquor or wine a manufacturer stores at the warehouse, Lamar said. The bailment fee increased from $1 per case to $1.50 per case on July 1.
“The $1.50 bailment fee will go into a fund and be used to pay the note on the state revenue bonds that are issued for the facility,” Lamar said. “That ensures our general taxpayers are not paying for the facility. What that means is my grandmother, who doesn’t buy liquor, isn’t going to have her taxes going to pay for the warehouse.”
The state Department of Finance and Administration Bureau of Building, Grounds and Real Property Management is accepting proposals for the design and construction of the new warehouse. Sealed bids should be submitted no later than 2 p.m. Central Standard Time on July 11.
A groundbreaking on the first phase of construction is desired on or before Feb. 15, 2025 and substantial completion is expected on or before Aug. 15, 2026, according to the request for proposals.
The current ABC warehouse is 211,000 square feet, has 171,150 square feet of non-conditioned warehouse space for product storage and dock space and 24,200 square feet of climate controlled conditioned space for wine storage. The facility also contains two levels of office space and a small storage area.
The new warehouse will have 300,000 square feet to 350,000 square feet, Lamar said. The ceilings will be much higher to maximize storage space and a modern picking system so orders can be more efficiently filled, he said.
The initial warehouse facility was built in 1983 and the climate-controlled area for wine was constructed in 2003.
As of February 2024, there are 2,434 active licensees/permittees in the state being serviced from the warehouse.
Plans call for selling the current warehouse after the new one is operational. “We won’t need it anymore,” Lamar said.
Lamar said the House of Representatives has passed legislation several times that would allow the state to get out of the liquor distribution business but “the Senate wouldn’t go along with it.”
Walter Michel, a Republican who represents District 25 (Hinds and Madison counties) in the state Senate, maintained that legislation could solve some of the distribution problems that the warehouse faced without having to expand its size or hire additional employees.
He has introduced in several legislative sessions a bill that would allow grocery stores to sell wine with a higher alcohol content than what they already sell and another bill that would let wineries direct ship product to consumers, grocery stores and liquor stores. Those bills have been unsuccessful.
