In the past several years alcohol distribution across Mississippi has gained more and more attention amongst legislators, from bills to allow the direct shipment of wine to your home to now the privatization of the Alcohol Beverage Control program in Mississippi.
HB 997 brought forward by Rep. Trey Lamar would remove the Department of Revenue as a wholesale distributor and allow for wholesale permits to be issued to the business community. Currently, DOR operates the ABC facility that is located in Gluckstadt. The State of Mississippi began running the ABC shortly after statewide prohibition ended in the 1960’s.
These permits would be good for the wholesale of liquor and wine throughout Mississippi, something several other states have already done according to Lamar. The system is set up in three parts: distilleries, wholesalers and retailers.
“Other places in the country do it, we just don’t allow for them to come into Mississippi,” said Lamar. “With this bill, the state would be out of it which would allow the private sector to come in and run it.”
Lamar said this would be beneficial for many reasons including the growing demand the public has for purchasing alcohol. It is a business, Lamar says, that the government cannot keep up with.
Higher demand has shown a need for several changes to be made to the program including increasing the salaries of employees, updating equipment and increasing delivery capacity. This is an expense that Lamar said could cost upwards of $14 million.
Former DOR Commissioner Herb Frierson shares the sentiment that the current facility in Gluckstadt is simply outdated.
However, if the business community were allowed to come in with the permits it would prevent taxpayer dollars from going into a warehouse and possibly increase the jobs by 500 to 1,000.
“The government does not do a good job of paying employees or running its property. This isn’t a core function of what government is meant to do,” said Lamar.
The bill also takes the tax currently on liquor sales from 27.5% to 18%, which would allow wholesalers to make a profit. However, the change could impact sales revenue for the state which would need to be accounted for in other areas.
Alcohol sales during the start of the COVID-19 pandemic soared and were even temporarily suspended for 20 days in July due to such a large demand. The ABC experienced a 29% increase in sales and shipped over 1.3 million cases of wine and spirits in just four months.
This increase has led to even more delays, as long as two weeks. Options have been suggested by new Commissioner of DOR Chris Graham which include the facility updates, privatizing wine distribution, or paying an outside entity to oversee the operation. Graham shared his thoughts with lawmakers in hearings prior to the start of the 2021 Legislative session.