Posted on Sun, Apr. 10, 2005
EDITORIAL

House Gets Free-Pour Right
Legislation focuses on what's best for consumers, drinking establishments


As expected, the S.C. House is on track to rescue South Carolinians who enjoy cocktails at home from footing part of the bill for phasing out minibottles in drinking establishments. The House also well may rescue the good folks who run those drinking establishments from having to buy big bottles of liquor from the state's 58 liquor-store retailers with Class B licenses.

Credit these welcome developments to S.C. Rep. Bill Cotty, R-Columbia, who last week persuaded a House Ways and Means subcommittee to develop a free-pour bill that focuses on the needs of S.C. liquor consumers and S.C. hotels, bars and restaurants. The Senate Finance Committee, in disappointing contrast, molded its free-pour bill to meet the needs of the same liquor-store retailers who for three decades had a state-mandated chokehold on minibottle sales, as well as the needs of the S.C. Department of Revenue.

The Finance Committee bill, now awaiting action in the Senate, gives the 58 Class B liquor stores across the state a monopoly on retail sales to bars, to the exclusion of the four distribution firms that wholesale liquor statewide. That concession wasn't so much a deal breaker as an irritant: Why not let the distributors and Class B stores duke it out in the marketplace on sales to drinking establishments?

The Finance Committee's tax provision, however, is a deal breaker. Instead of imposing a 5 percent tax on drinking establishment cocktails, the committee slapped a 52-cents-per-liter tax on all big bottles sold statewide in all liquor stores. Such a law might be great for the Revenue Department, as that tax would be easier to collect than the cocktail tax. But involving home liquor consumers in the minibottle-to-free-pour switchover had never been part of the legislative discussion - until the Finance Committee blithely made the change.

Cotty's House bill has neither of these problems. The measure would allow liquor distributors to compete for delivery sales to drinking establishments - giving bars, hotels and restaurants maximum flexibility to shop around for the best prices and liquor selection.

Better still, it would impose the 5 percent cocktail tax - leaving it to the Revenue Department to figure out how to collect it. Any problems in that area would be more than offset by this provision's keen financial focus: ensuring that drinking establishment customers handle the cost of the minibottle-to-big-bottle switchover.

The Finance Committee, we fear, fell prey to the Class B liquor store lobby, which succeeded for years in preventing South Carolinians from deciding, at the polls, if the minibottle mandate should be removed from the S.C. Constitution. When voters finally got that chance last year, they answered with a resounding: Yes.

Senators' feeling seems to be that the Class B lobby needs protection from market forces - that it's the state's responsibility to ensure they stay in business in the brave new world of free-pour. Well, it's not.

The House has the better take on what that brave new world should look like.

When it takes up free-pour legislation, the Senate should fix the damage wrought by the Finance Committee. If that doesn't happen, it will be up to the House to fight for a law that's fair, democratic and market-oriented.





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