Taxation, safety points of contention for minibottle referendum

By PHILIP LORD Senior writer

One side claims the issue is about choice, safety and the environment, but the other side claims the issue of minibottle usage in South Carolina comes down to taxation and how the government spends the money.

A week from today Palmetto State voters will be asked to weigh in on this debate between the S.C. Hospitality Association, a long-standing organization of those in the hospitality business, and the newly formed Palmetto Hospitality Association, which is comprised of minibottle wholesalers who have pumped an estimated $1 million into an ad campaign to defeat the change.

The issue boils down to the point that South Carolina is the only state in the union still using 1.7 ounce minibottles to pour mixed drinks. Restaurant owners want to decide if they stay with the minibottles or go to a free pour system from large bottles. Wholesalers, however, like the revenue they generate from 72 million minibottle sales annually.

Here is the wording on the ballot: "Must Section 1, Article VIII-A of the Constitution of this State, relating to the powers of the General Assembly pertaining to alcoholic liquors and beverages, be amended so as to authorize the General Assembly to determine the size of containers in which alcoholic liquors or beverages are sold and to delete the provision requiring the sale of alcoholic liquors for consumption on the premises only in sealed containers of two ounces or less?"

A "yes" vote will mean the S.C. General Assembly will draft legislation to regulate the free pour system. A "no" vote kills the issue and the minibottles remain.

S.C. Hospitality Association Director Tom Sponseller said such wording passed the House of Representatives on a 94-10 vote last session and was adopted by the Senate Judiciary Committee as a rare "committee bill," which means there were no objections to the legislation. The bill was stalled when another member of the Senate used the rules of the body to filibuster the vote.

For Westside Bowery owner Sam Erb, who spent part of Monday supporting Gov. Mark Sanford in his support of the referendum, the minibottle vote comes down to highway safety and a choice in running his business.

"I am going to be an operator that uses both, honestly," said Erb, who admits that less ordered drinks, or cordials, will be best kept in the small bottles.

Erb said his restaurant is already equipped with the computer program required to regulate the amount of alcohol poured and the taxes charged on the drink.

"It will be a smooth transition" if the electorate decides to change the state constitution, Erb said.

Sponseller said the minibottle issue is facing the electorate because the requirement that drinks be mixed from the small containers is actually in the law. "It's in the constitution. It doesn't need to be there," Sponseller said.

In addition to the safety issue and the amount of landfill space required to hold the non-recyclable bottles, Sponseller said customer complaints about the strength of drinks and the cost of drinks has sparked the drive to change the constitution.

"We get a lot of complaints from the customer that the drinks are too strong," Sponseller said.

Statistics show it takes less than three minibottles for the average male and two minibottles for the average female to register a .08 blood alcohol level, which is legally drunk in South Carolina.

One argument being used by the Palmetto Hospitality Association, which wants to kill the referendum, is that the free-pour system will bring in additional revenues to the state.

"According to State Economist Dr. William Gillespie — whose job is to protect the state budget — legislation passed by the House this year would generate an additional $172,000 in state taxes the first year large bottles are allowed," according to the Web site safesc.com.

"Dr. Steve Morse, an economist at the University of South Carolina predicts state revenue will double over the next 20 years on price inflation alone. Burnet Maybank, director of the Department of Revenue not only concurs, he says the change will not create any significant increases in tax collection costs," according to the Web site.

Contact Philip Lord at plord@aikenstandard.com.

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