Posted on Fri, Mar. 11, 2005


Wholesalers left out of free-pour bill
Panel OKs liquor delivery, tax

The Sun News

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


Contact ZANE WILSON at 520-0397 or zwilson@thesunnews.com.




© 2005 The Sun News and wire service sources. All Rights Reserved.
http://www.myrtlebeachonline.com