House committee hears three different liquor bills

JEFFERSON CITY, Mo. — Three bills regarding alcohol were presented to the House General Laws Committee on Tuesday night. The legislation included allowing underaged adults who work of a licensed retailer to carry liquor to a customer’s vehicle, allowing retailers to transport products to and from a warehouse, and requiring intoxicating liquor to physically come into the possession of a licensed wholesaler.

Rep. Jack Bondon’s HB 2364, which he calls the Three-Tier Verification Act, ensures that wholesalers uphold their responsibilities under the intoxicating liquor distribution system.

“My three tier verification bill simply prevents wholesalers from neglecting their responsibilities,” said Bondon. “The bill has nothing to do with the producer or the retailer. This bill is about the wholesaler being held accountable for their job in the three-tier system.”

The three-tier distribution system — which consists of the producer, the wholesaler, and the retailer — has been operating for nearly a hundred years in the alcohol industry to ensure regulatory compliance and product safety. It was set up this way because each tier has its own specific responsibility to ensure compliance and to verify the quality and safety of the product, according to Bondon.

“Until very, very recently in our state, the wholesalers operated under the understanding that in order to meet their obligation as a wholesaler, product always went to the wholesaler’s warehouse,” Bondon said. “However, some wholesalers have begun to skirt their responsibilities by allowing the original producer to ship the product directly to the retailer and the wholesaler simply pre-registers the product and pushes out an invoice to the retailer. They have never seen the product and therefore they could have no possible way to verify the number of cases, the items, what’s in the shipment, the quality of the products, [and other obligations].”

Bondon’s bill requires that the wholesaler, or the middle tier of the system, comes into physical possession of the product. According to Bondon, the vast majority of wholesales do this.

“It strikes me as odd, that what you are saying as the assumed obligations of the second tier would have never been written down that they had to do these things,” Rep. Jon Carpenter said. “We have the whole three-tier system but no one ever thought to say that the second tier must do x, y, and z.”

“It is certainly clear under both law and rule, that they are to verify the product is registered with the state, that the number of cases being shipped is the right number of cases, that the item being shipped is the right item being shipped,” Bondon responded.

Carpenter wondered then wouldn’t the wholesale be violating the law by not inspecting the product. In his opinion, Bondon thought so.

“I think a crafty lawyer could argue that they registered it with the state, they think it is the right number of cased, they are sure it is the right product,” Bondon said.

His bill will make it clear that the wholesaler is to take physical possession of the product, unloads the product, and fulfills their obligation. It was pointed out several times that the vast majority of wholesalers do this, and it has been in statute since 1993 that beer producers be required to do this.

Rep. Lyndall Fraker presented legislation that would allow retailers to transport products to and from a designated central warehouse.

“HB 2409 allows retailers of intoxicating liquors to warehouse and self-deliver products to and from a central warehouse to their owns stores within the state,” Fraker said. “This applies to retail stores that have multiple Missouri location that sell wine and spirits, this bill does not involve beer.”

This allows retailers to manage and control their liquor storage, according to Fraker. The bill just removes the one county line regulatory striction current in place.

“It does not impact the three-tier system,” said Jeff Brooks, a lobbyist for Walmart. “The warehouse and the store has to be controlled by the same retailer.”

The committee also heard testimony on Rep. Craig Redmon’s HB 2258, which allows a person at least 18-years-old who works in a business licensed to sell intoxicating liquor to carry any liquor purchased to a customer’s vehicle.

This story originally appeared on The Missouri Times.

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