Mississippi alcohol shortage continues with 170,000-case backlog in ABC warehouse

By Katherine Lin | Originally published by Mississippi Today

A shortage of alcohol for package stores, bars and restaurants in Mississippi continues after lawmakers failed to pass an emergency measure to allow businesses to bypass the state’s Alcoholic Beverage Control warehouse and buy directly from distributors. 

While some stores and restaurants report that they’re receiving more shipments and the warehouse has ramped up the number of cases it’s sending out, there was still a backlog of 170,000 cases as of March 29, according to the Department of Revenue’s website. 

The alcohol shortage has renewed calls from some lawmakers and residents for the state to privatize alcohol distribution. There have been proposals to do so for years but some fear the state would lose tax revenue if it gets out of the alcohol business. The state collects around $120 million a year in taxes on alcohol. In addition, the state has authorized borrowing $95 million to construct a new warehouse, set to begin operations in 2027.

SB 2838, which died in the recently ended legislative session, would have set a limited period during which license holders could purchase alcohol from any seller anywhere in the country. Under the current process, all alcohol, except beer and light wine, must go through the ABC Warehouse.  

At least four Mississippi businesses are suing the ABC warehouse operator claiming breach of contract and harm to their business.

Some package store owners were critical of the bill aimed at relieving the shortage. They said direct shipment would be costly for them and that infrastructure to make direct sales does not exist. However, House State Affairs Chairman Hank Zuber, a Republican from Ocean Springs, and other business owners said it would have provided temporary relief. 

Zuber said the Senate killed the measure without explanation and did not make a counter proposal.

“We have no solution from the Senate,” Zuber said.

Trouble began in January when the warehouse, which is operated for the Department of Revenue by private contractor Ruan Transportation, implemented new software that was incompatible with its old conveyor belt system of loading cases. The conveyor belt system was removed and forklifts used to transfer pallets onto outgoing trucks. 

Implementation did not go smoothly. It took weeks to work through technical issues with the software and adjust to the new loading system. Across the state, orders backed up.

In a Feb. 17 House State Affairs meeting, Chris Graham, commissioner of DOR, told legislators that the warehouse was working around the clock to reduce the backlog. At the time, there were around 200,000 cases in the backlog. Graham told the commission the warehouse thought it would be able to cut the backlog in half by the end of March.

“We believe that they will be able to ramp up operations throughout the next month. We think at the end of March they will have the backlog that exists right now reduced in half,” Graham said at the meeting. 

But Zuber said last week: “I went to two restaurants myself personally yesterday and last night to see what the inventory was like. One restaurant had no vodka, the other one had a very limited amount of wine.

“I wish the Senate would at least come up with their proposal, work with us, and let’s get something accomplished,” Zuber said.

The Department of Revenue did not respond to a request for comment for this article.

This article was originally published by Mississippi Today and is republished here under a Creative Commons license.

Source: Original Article