Lawmakers consider 24-hour hold on alcohol shipments

What’s one day more?

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JONATHAN BONCEK FILE PHOTO
  • Jonathan Boncek file photo
A bill currently before the state Senate looks to add one more obstacle between you and your drink of choice.

Introduced to the House early last year and currently residing in the Senate’s Judiciary Committee, the “at rest” law would require shipments of beer, wine, and liquor to remain in South Carolina wholesalers’ facilities for a minimum of 24 hours before they can be delivered to local retailers. Currently, regulations mandate that alcohol sales follow a multi-tiered system, requiring retailers to purchase from in-state wholesalers who purchase from manufacturers. Those behind the new bill argue that it helps ensure that the state receives its fair share of taxes and regulators have time to do their job, but when debated in the House last year, the 24-hour wait period drew its fair share of criticism from lawmakers.

“You’re eliminating competition. ... You’re going to make a small wholesaler pay rent for a warehouse, buy a forklift, and other expensive equipment for nothing,” said Rep. Ralph Norman, according to a report compiled by Capitol Information Affiliates in June 2015.

In that same document, Norman is said to have added, “This is nothing more than the three top wholesalers getting together because the small guys have figured out a better way.”

In South Carolina, the top three means Republic National Distributing Company, Ben Arnold-Sunbelt Beverage Company, and Southern Wine and Spirits. Representatives of these companies currently make up the three-member board of the Wine and Spirits Wholesalers Association of South Carolina, who along with the S.C. Beer Wholesalers Association are firmly in favor of the bill.

“About 38 states have at-rest laws, and the reason for that is to make sure everything is on the up and up since the wholesalers are the ones who collect and remit the taxes to the state,” says Julie Cox, executive director of the Beer Wholesalers Association and lobbyist with Capitol Information Affiliates. “Right now, beer and wine collect and remit about $104 to $106 million a year. Spirits is about $74 million a year, so the state needs the ability to audit that. SLED has found several of what they consider ‘paper wholesalers’ who come into the state and distribute product that is now accounted for, and this is a good way for accounting and transparency.”

When she says “paper wholesalers,” Cox is referring to companies who are licensed in South Carolina, but ship alcohol directly to stores from warehouses out of state. While major wholesalers may be behind the proposed law, local manufacturers are less excited about what the waiting period could mean for their businesses.

“I don’t understand the necessity of making it more burdensome. I do believe it’s going to make it cumbersome for a small guy like us who doesn’t deliver hundreds of pallets a month to distributors,” says Scott Blackwell, owner of High Wire Distilling. “We’re delivering literally 10 to 20 cases of popular products on a delivery, and restaurants and bars may be out of it. Having to wait an additional day, believe it or not, sometimes could make us have holes in our product line on the shelves or at bars and restaurants.”

While Blackwell feels there is little to be done about the proposed at-rest law at this point, he is pushing for another piece of legislation in the House. Bill H. 3329 would free up micro-distilleries to serve guests larger volumes of alcohol, but at the same time allow them to offer cocktails, instead of the current law which restricts drinks to straight liquor.

“There’s no changes to our hours. We wouldn’t become like a bar. The beer guys can serve endlessly nowadays. We can’t do that, but it would allow us to have a little bit more of a welcoming atmosphere,” says Blackwell. “The local folks don’t come in as much. I think this would bring more locals in. Right now, 92 percent of our clientele is from out of town, which is great, but it would be nice to see some local folks coming in here. This would give us the ability to band together with local companies like Jack Rudy and do something special with them.”

Blackwell adds, “It allows us to partner together and do things that we can’t do right now. It puts us on a bit of a more level playing field with beer, how the laws are for beer.”


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