It won't happen overnight, but liquor
bottles will get bigger and drinks smaller after voters said "yes" Tuesday
to repeal a 30-year-old state law that requires liquor sold by the drink
be poured from minibottles.
With about 60 percent of voters approving a constitutional amendment,
the issue now goes to the General Assembly in January, where lawmakers
will attempt to thrash out how the state will collect taxes if a free-pour
system is introduced. If the change becomes law next year, it likely will
go into effect July 1, the start of the state's fiscal year, lawmakers
said.
The vote was closer than many people
expected because supporters of the minibottle poured millions of dollars
into television and radio commercials that claimed the legislature did not
have a plan on how to tax free-pour liquor.
Minibottles are taxed at 25 cents per bottle, with about 75 million
minibottles sold in the state every year. Last year, the state collected
nearly $19 million from the tax from more than 2,500 bars and restaurants
with licenses to sell drinks from minibottles, according to the state
Department of Revenue.
If the General Assembly fails to reach an agreement, it could be
another 12 months before any changes occur, keeping large bottles out of
bars in the meantime.
The outcome is likely to come down to a simple choice between requiring
bars and restaurants to pay a tax when they buy liquor from wholesalers,
or charging consumers an additional sales tax on every drink sold across
the bar.
John Kelsey, owner of Rollers Liquors and Triangle Liquors on Hilton
Head Island, said he opposed the change because he was concerned that
neither tax proposal would raise enough money to offset what could be lost
by allowing large bottles. Both of Kelsey's stores sell minibottles to
bars and restaurants but not the public.
If legislators decide to keep the tax at the wholesale level as it is
now, operators like Kelsey are worried it will make liter bottles too
expensive, sending bars to buy liquor at retail liquor stores.
At a retail liquor store, bar owners would pay much less tax on a liter
bottle than wholesalers pay on the equivalent amount of liquor in
minibottles. Bars will save about $5 in tax on a liter bottle from
retailers, who pay $1.42 in tax for a liter bottle of liquor. At a
wholesaler, bars pay 25 cents for every minibottle, and a liter is
equivalent to about 20 minibottles.
Opponents also have said that tavern customers won't get a fair deal.
With a big bottle, bartenders simply eyeball the amount they pour and can
pour less than a fair amount, they say. Opponents also fear bars can dupe
customers by switching off-brand liquor and brand-name bottles.
"Our only option is to work with the legislature to try and get a fair
law," Kelsey said.
Advocates for the law change, primarily lawmakers and the hospitality
industry, argue that free-pour will bring the state in line with the rest
of the country, make drinks less strong and make them cheaper. Under the
proposed change, bars could choose which size bottles they carry.
"Our interest is safety," said Tom Sponseller, president of the
Hospitality Association of South Carolina.
South Carolina was the only state in the nation to prohibit drinks
poured from bigger bottles, insisting bars use only the 1.7-ounce bottles
of liquor seen only on airliners and in hotel mini-bars outside the state.
Many visitors complain drinks in South Carolina are too strong and
don't taste the same, and cocktails made with more than one liquor are too
expensive, given the restrictions of using minibottles for each brand.
"You're literally buying two or three drinks when you buy a two- or
three-liquor drink," Sponseller said.
The minibottles were introduced in 1973 to encourage temperance, but
critics say the tiny bottles had the opposite effect. Bartenders poured
stiffer, more expensive drinks because the 1.7-ounce minibottles pack a
bigger punch than the 1.25-ounce shot typically poured from larger bottles
in all other states.
But lawmakers are confident a solution can be found and that the
General Assembly will do so within its legislative session next year, said
state Sen. Scott Richardson, R-Hilton Head Island. That would give bars
time to train staff to use free-pour bottles and refit bars to accommodate
the larger bottles if they choose to use them.
"I don't think there's really much to argue over and I feel like the
legislature will move on pretty quickly," Richardson said.
While the minibottle is unlikely to disappear from all bars, consumers
ultimately will decide how they prefer their drink, he said.
"I have every confidence that the public will figure out very quickly
if an establishment serves a reasonable drink or not."