COLUMBIA - A Senate subcommittee probed for three hours Wednesday to find the fairest way to make the change to free pouring that will give consumers the best buy.

No action was taken, but Sen. Dick Elliott, D-North Myrtle Beach, the panel's chairman, said decisions will be made when the group meets again today.

Lawmakers have to write legislation to implement free pouring after voters approved eliminating the minibottle requirement. Current law makes bars buy their supplies from the 58 liquor stores in the state currently licensed to sell to bars.

The state's four wholesalers want the right to sell to bars also, and the S.C. Hospitality Association has endorsed that change on grounds that it will produce more competition and better prices for bars and consumers.

The specially-licensed liquor stores say they need some protection because the wholesalers could undercut their prices and put them out of business.

They should not have to compete with the people they have to buy liquor from, said John Kelsey, who represents a group of store owners with what are called Class B federal liquor licenses to sell for on-premise use.

Kelsey said that, if lawmakers want to open the competition, they should level the playing field in several ways.

"We would like to have competition on the buying side," he said, adding that the state should adopt a Minnesota rule that requires distillers to make products available to all wholesalers.

In South Carolina, each wholesaler carries different brands. Buyers must deal with all the wholesalers to get all the brands, and this prevents competition for one brand of liquor, Kelsey said.

The liquor stores also should be able to buy on credit, he said. State law allows the wholesalers to buy on credit from the distillers, but the liquor stores and bars must pay cash for their supplies.

Kelsey's position has support from Sen. Robert Ford, D-Charleston, who said it is the state that set up the system 30 years ago and it should not penalize the liquor stores.

"We're about to create a mess if we go along with this" because the Class B licensees cannot compete with the people they have to buy from, Ford said.

Republican Sen. Jim Ritchie of Spartanburg said the distillers should be able to decide who gets their products.

"You're forcing me to compete with someone who has a monopoly," Kelsey said.

E. Crosby Lewis, an attorney for one of the state's largest wholesalers, Southern Wine and Spirits, said Kelsey's suggestions have merit.

But it was the Class B licensees who had a monopoly to sell to bars for 30 years, and the bars were deprived of the kind of services they could get if competition were more open, Lewis said.

Ford said the wholesalers still will make money if the law isn't changed because all liquor stores will have to buy from them. But if the law is changed, some Class B licensees will be put out of business, he said.

Crosby said that a change can't be made without some losses but that wholesalers don't want to put the Class B stores out of business because they need the stores to market products to the public.

David Wojnar, representing the Distilled Spirits Industry Council of the United States, said "nobody has a system like South Carolina" and he is not sure how the proposed changes will work.

Ford wants to allow the Class B licensees to buy directly from distillers to open competition further, but Wojnar said that is against federal law.

As for requiring distillers to sell their products to any wholesaler, "from a brand perspective, it doesn't make sense," Wojnar said. Brands would have to compete with one another if that were done.

Sen. Jake Knotts, R-West Columbia, said comparable wholesale prices of liquor are lower in Minnesota, where wholesalers carry different brands. Wojnar said he could not explain the difference.

He said distillers probably would be willing to sell to more than one wholesaler "provided they fit into our business plan."

Knotts suggested the bill make no changes in the current system, and Ford agreed. Ritchie wants to change, and Elliott said he is neutral. Sen. Vincent Sheheen, D-Camden, was absent.

The group hopes to adopt a bill today to send to the Judiciary Committee next week.