Hurried liquor rule troubles businesses

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."