Alabama’s ‘ready-to-drink’ legislation will unlock new beverage market, secure win for Alabama businesses

As pre-mixed, ready-to-drink (RTD) canned cocktails continue to gain popularity nationwide, Alabama lawmakers in both chambers of the legislature are closer than ever to satisfying growing consumer demand while also boosting local businesses across the state.

Nationally, RTD sales have surged, making the category the fastest-growing segment in the alcoholic beverage market. Consumers across the state have been calling for these products to be more widely available in licensed retail accounts, such as grocery and convenience stores, that already sell beer and wine.

Many neighboring states, including Mississippi, which is also a liquor control state, have made similar exceptions for these products years ago.

Senate Bill 268, sponsored by State Sen. Bobby Singleton (D-Greensboro), now awaits final passage by the Alabama Senate after receiving a favorable report earlier this month. House Bill 521, sponsored by State Rep. Craig Lipscomb (R-Gadsden) awaits a vote in the House Tourism & Economic Development Committee.

Working with the Alabama Alcohol Beverage Control Board, both pieces of legislation were drafted to allow RTDs with no more than 7% alcohol by volume to be sold alongside beer and wine in convenience stores, supermarkets, and other retail outlets.

The bills also allow for sales of certain RTD products through the existing three-tier beverage system, meaning distribution would go through locally licensed wholesalers—creating new opportunities for local family businesses to grow alongside rising consumer demand.

Additionally, by expanding where RTDs can be sold, the legislation will open up a valuable new revenue stream for small grocers, corner stores, and rural gas stations—many of which operate on thin margins and would welcome the additional foot traffic and sales.

The ABC Board, which has said it will not oppose the effort, will still be able to sell the products in its state stores. The bills further levy an excise tax on these products, similar to beer and wine, with 50% of the taxes earmarked specifically for the ABC Board to fund additional enforcement pursuant to state law and regulation. The remainder of the taxes will be remitted to the State General Fund.

Previous versions of the bill were met with opposition due to restrictions around franchise law and fair dealing language.

The latest version addresses many of those concerns while still providing recourse to wholesalers who are terminated without cause in the form of a “fair market value” payment—bringing more industry participants to the table in support, including the Alabama Beverage Association, several beer wholesalers, and the Alabama Grocers Association.

This year’s RTD legislation is primed and ready for passage by lawmakers in both chambers. For retailers, wholesalers, regulators, and lawmakers alike—the compromises made to get these bills in a position to become law have been tremendous.

And in the end, the state, Alabama businesses, and Alabama consumers will benefit tremendously from opening up the marketplace for these beverages.