Proposed Alcohol Tax Hike in South Carolina Hurts “Mom and Pop” Stores; Senate Finance Committee decision could put retailers out of business

WASHINGTON, D.C. – The Distilled Spirits Council of the United States today denounced the action of a South Carolina Senate committee to increase the tax rate on distilled spirits sold in package stores. This proposal would raise taxes on liquor store customers to pay for repealing the state’s mini-bottle requirement in restaurants and bars. “When the people of South Carolina voted to eliminate the mini-bottle, they were not voting for price hikes,” said David Wojnar, Vice President of the Distilled Spirits Council. “The voters certainly didn’t expect to see the cost of the beverage alcohol they purchase in a store to increase.” Originally, restaurateurs, wholesalers and distillers had agreed to support a five percent point-of-sale tax on cocktails to maintain the tax revenue previously raised from mini-bottles. However, the proposed 56 cent increase in the tax on each liter of liquor sold represents a 33 percent increase over the current tax paid by liquor store customers. By contrast, restaurateurs will see the tax on a drink plummet 61 percent in addition to other cost savings associated with repealing the mini-bottle requirement. “No one’s looking out for the little guy when these decisions are made,” said Tim Guest, owner of Island Spirits and Fine Wine in Hilton Head. Guest is one of 850 retailers throughout the state that sell directly to consumers. Citing this new tax proposal and the Senate’s decision last week to give the 58 Class B distributors exclusive rights to sell to restaurants, Guest stated: “Restaurants will see their prices go down, Class Bs will see their profits go up and where does that leave me? I’m going to be paying new taxes which will raise my costs and hurt my business.” “Under a new system, we want South Carolina’s entire hospitality industry to thrive but not at the expense of small mom and pop retailers. Unfortunately, the Senate Finance Committee’s proposal would give the tourists in Hilton Head tax breaks while small liquor store owners and their local customers get left shouldering the tax burden,” said Wojnar. “We certainly hope the South Carolina Senate will consider the needs of the 850 small retailers, especially those along the Georgia and North Carolina borders, as they continue to make decisions on this legislation.” Wojnar pointed out that under this proposal, South Carolina’s per gallon tax rate will be about $1.24 higher than neighboring North Carolina and approximately $5.60 higher than Georgia’s rate. The Distilled Spirits Council is a national trade association representing producers and marketers of distilled spirits and importers of wines sold in the United States and represents nearly 80 percent of all distilled spirits brands sold in this country.