Last Thursday, the Alabama Alcoholic Beverage Control (ABC) Board raised its bailment fee from 72 cents to $1 per case.
After delaying a vote on the issue scheduled for September, the three-person board unanimously approved the fee increase. Liquor stores will now pay a higher rate to store cases of their product in an ABC warehouse.
A previous proposal would have steadily increased the fee to $1.50 by 2028, but board members compromised on a resolution that will set a single, 28-cent increase into effect January 1. However, the board agreed to revisit the additional increases in “eight or nine months.”
The ABC Board is in the process of constructing a new, $98 million dollar Montgomery warehouse that will replace the board’s existing facilities, which board administrator Curtis Stewart said are too small. Stewart claimed the fee increase will help pay for the warehouse, which is being built by the Retirement Systems of Alabama.
According to Stewart, of the ten liquor control states with bailment fees, Alabama’s is the lowest, with the next-lowest standing at 80 cents. Previously, the fee had remained unchanged since 2013.
The precise impact the fee increase will have on consumers is unclear. State Rep. Curtis Travis (D-Tuscaloosa) told CBS 42 News that the increase will not significantly raise liquor prices, while State Sen. Chris Elliott (R-Josephine) told Yellowhammer News that it will do “nothing but cost consumers.”
The per-bottle cost of liquor stands to climb by a marginal figure – in a statement, the board said the increase will come out to about two cents per bottle in every case – but the amount consumers pay will hinge on the willingness of retailers and restaurants to absorb costs versus pass them along. According to the board, the decision on what to do with the two cents will be left to each alcohol supplier.
Elliott is one of a number of lawmakers who criticized the resolution, which needed no legislative approval to pass. Last Wednesday, he accused the board of failing to disclose to the State Legislature that it intended to raise the bailment fee to finance the warehouse. If it had done so, the Legislature “would have never approved” the project, Elliott told Yellowhammer News,
“This is not something that the Legislature has approved. Rather, it’s something they’re doing on their own through their rulemaking authority to make up for increased profit for them, for a new building… Show me where, either in a published report or a document to the Legislature, that they said they were going to do this prior to asking for approval,” he said.
In August, ABC Chief Operating Officer Neil Graff told members of the Legislature’s General Fund committees that the warehouse would be funded by the ABC’s operating expenses, but the fee increase never came up.
Charles Vaughan is a contributing writer for Yellowhammer News.
