South Carolina voters agreed last November to change the state Constitution to end the requirement that bars and restaurants use minibottles to serve alcohol. We're the last state using them.

As Mitch Gainey sipped a drink at a Columbia sports bar Monday afternoon, he's been wondering why he hasn't heard anything about the change since then. "Sure have," he says. "Wonder when it's going to happen. I think it's a good thing."

The answer is, not soon. State lawmakers must first pass the enabling legislation to set up the new system, including how drinks will be taxed. A Senate subcommittee is scheduled to start working on the bills this Wednesday morning.

Rep. Bill Cotty, R-Columbia, is the main sponsor of the House version of the bill. He says the General Assembly is almost certain to pass the bill this session, but the change won't go into effect until January 1st, 2006.

"The reason for that is you have to pick some point at which, when do you get rid of these minibottles that have been pre-taxed when they came into the state? And without a question, everybody in the industry--bars, restaurants, the liquor wholesalers, the liquor stores--everybody agrees that they'd have the best chance to have the smallest amount of inventory left over at the end of the Christmas season," he says.

Right now, every minibottle is taxed 25 cents by the state. Under a free-pour system, each large bottle won't be taxed. Instead, consumers will pay a five-percent tax on each drink.

But that doesn't mean consumers will be paying more for their drinks, Rep. Cotty says. "No, the opposite would be true. The market will actually encourage, because the drink is less ounces, 1.2-1.1 compared to 1.7, the competition should drive the price of drinks initially down." 

Bars and restaurants will still be able to use minibottles if they choose to. And, for the first time ever, the public would be able to buy minibottles directly, which is illegal now. Cotty says many people would like that option so they can take smaller bottles tailgating or use the smaller amount for cooking.

The only real sticking point in getting the legislation passed is the question of delivery. Right now, it's illegal to deliver liquor. So every bar and restaurant must go to their local distributor and pick up their alcohol.

Delivery would be allowed under the new system, but the fight is over who would be doing the delivering. There are only four liquor wholesalers in the state, and they'd like to be the only ones able to deliver. But that would bypass the current distributors and could put them out of business, since the wholesalers could provide a lower price.

So Cotty says his bill would allow the wholesalers and distributors to deliver, fostering competition to keep prices down.

He says estimates are that the new system would bring in more money for the state. Since minibottles are now taxed per bottle with no changes for inflation, revenue is relatively flat. By collecting a five-percent tax, the state will make more money as inflation raises the cost of drinks, he says.