Liquor wholesalers and retailers are
meeting next month to iron out problems
in the industry brought to the fore
by a recent tax bill.
Assembly Bill 12 was hurried
through the state Legislature's special
session earlier this year. It was originally
designed to allow casinos to move
high-priced liquor between sister properties
without registering the transaction
as a sale. The language of the bill,
however, is so specific that it now prohibits
grocers from shipping liquor to
different stores from a central
warehouse.
"Unfortunately, that's a misinterpretation
of the legislative intent," said
Mary Lau, executive director of the
Retail Association of Nevada in
Carson City.
Everyone in the industry agrees the
bill should be changed, and they will
lobby the legislature next year to amend
it. But first the wholesalers and retailers
have to work out a major bone of contention
within the industry: Retailers
such as Scolari's and Raley's want to
warehouse liquor stocks. That's fine, say
wholesalers, as long as the retailers live
up to their franchise agreements.
Wholesalers contend that some
retailers have been circumventing local
liquor franchises by buying liquor from
one franchisee and shipping it to their
stores located in another franchisee's
territory. The result is that large franchises
thrive while smaller ones struggle
to stay alive.
"We're meeting next month to find
out if there are any violations and what
we do to go about setting that right,"
said Lau.
But the two sides are not likely to
agree on who is the source of the problem.
It's a matter of contract law, said
Lau, and it may be a dispute that needs
to be settled between wholesalers, and
not the wholesaler and retailer.
"No one likes to sue their clients,"
she said.
A representative of the Nevada Beer
Wholesaler's Association could not be
reached for comment.
The two sides' lobbyists attorney
Sam McMullen for the retailers and
Alfredo Alonzo from Lionel Sawyer &
Collins for the wholesalers made presentations
at the Nevada Tax
Commission's August meeting.
Tax officials, the retailers and the
wholesalers will conduct workshops
once the two industry participants have
worked out their differences to come
up with suitable language for rectifying
the bill.
"They'll submit their concerns and
we'll take that and develop some regulatory
guidance," said Chuck Chinnock,
executive director of the State of Nevada
Department of Taxation. "I'm sure it
will end up in the Legislature."
