Wholesalers left
out of free-pour bill Panel OKs liquor
delivery, tax By Zane
Wilson The Sun
News
COLUMBIA - The hospitality industry got
most of what it wanted Thursday when a Senate subcommittee agreed to
free-pouring legislation that allows delivery, but it is now
unlikely that the details can be put in place before next year.
The bill approved by the subcommittee, which is expected to be
taken up Tuesday by the full Senate Judiciary Committee, keeps the
current federal Class B licensees as the suppliers for bars and does
not allow the four wholesalers to sell directly, as they had
requested.
The biggest change the public would see when the bill becomes law
is the 5 percent cocktail tax to be added to existing sales and
hospitality taxes, and the possibility of less-expensive and
less-potent drinks but more variety than was available with
minibottles.
Standard drinks use 1.25 ounces of liquor. Drinks made with
minibottles use 1.7 ounces.
The major wholesalers put on a full-court press for the rights to
sell directly to bars, and much of the hospitality industry
supported the proposal on grounds it would be more competitive.
In the end, fears that the Class B licensees would be driven out
of a business in a system that the state forced on them 30 years ago
held out.
The subcommittee voted 4-1 to keep distribution to bars with the
Class B licensees. Sen. Jim Ritchie, R-Spartanburg, had championed
the change and voted no.
The bill still could be changed in its journey to the full
committee and full Senate, and through the House, but panel members
said major agreement on the issues should hold the provisions in
place.
Tom Sponseller, president of the S.C. Hospitality Association,
said his members wanted delivery to their locations more than
anything else, a measure that is allowed in the bill. Current law
requires them to pick up their supplies, and that is a risk and
liability factor for the employee and the company, he said.
He is not sure if the association will lobby the full committee
to allow the wholesalers to sell, or get behind the measure as
adopted Thursday.
Sen. Dick Elliott, D-North Myrtle Beach, led the subcommittee. He
told Sponseller it might be wiser to back the bill as it is and get
it passed as quickly as possible.
The proposal contains a starting date of Jan. 1, 2006, but
Elliott said that could change if the bill passes quickly and the
state Department of Revenue is able to work out the details of the
changes.
Among items to be handled are how to track the liquor on store
shelves that has already had the tax paid on it, so that it is not
taxed again, and collection and enforcement details.Texas is the
only other state that maintains the Class B system for sale to
on-premise users. Most of the others allow wholesalers to sell
directly to bars. In some states, the state sells and distributes
liquor.
S.C. wholesalers still will make money because the state's system
allows them to have the monopoly on sales to stores, said Sen.
Robert Ford, D-Charleston.
"Everybody would make money except one group," Ford said, and
that is the Class B licensees.
Ritchie said tourism is the state's biggest industry and if
lawmakers can help it be more successful by fostering more
competition on prices, the state should do so.
Ritchie tried to persuade the others not to vote on the wholesale
issue and to leave that for further negotiation.
"I think it's bad for South Carolina; I think it's bad for
competition," he said. He moved to table the motion to keep the
Class B system, but his motion died for lack of a second.
Main points in
free-pour bill that advanced Thursday
5 percent cocktail tax in addition to existing sales and
hospitality taxes
Bars can serve from any size bottle they choose
Wholesalers will not be allowed to sell to bars
Liquor stores that sell to bars may deliver
Minibottles may be sold to the public in liquor stores
Liquor licenses can be revoked for bars that refill bottles to
avoid tax or substitute cheaper liquors or put water in
bottles
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