(Source: MIRS.news, Published 05/08/2024) In the age of SunnyD Vodka Seltzers and spiked Minute Maid products, Senate bills are being considered to create some distance between the original, non-alcoholic juices and their alcoholic spin-offs inside liquor stores.
The industry is seeing “significant growth” in products like Dunkin' Donuts' alcoholic coffee drinks and “Simply Spiked fruit juices,” said Sen. Dayna Polehanki (D-Livonia) in this morning's Senate Regulatory Affairs Committee Hearing. In many cases, these alcoholic beverages have the same logo, brand name and packaging as their non-alcoholic sister products.
Polehanki's SB 730 mandates that co-branded alcoholic beverages are not placed next to soft drinks and fruit juices, water bottles, candy, toys and snack foods (with “youth-oriented” packaging) unless the store is smaller than 2,500 square feet. In those cases, there would need to be an 8.5-by 11-inch sign that reads, "THIS PRODUCT IS AN ALCOHOLIC BEVERAGE AVAILABLE ONLY TO PERSONS WHO ARE 21 YEARS OF AGE OR OLDER."
The Liquor Control Commission could fine violators.
"There have been reported instances where these products have been placed next to the non-alcoholic versions, and even next to items for children, creating confusion for both consumers and retail establishments," Polehanki said.
During this morning's testimony, Sen. Joseph Bellino Jr. (R-Monroe) said he owned a store for more than 24 years that was 2,600 square feet inside. Ultimately, he said he would have a tough time following
SB 730.
"I was taught (that) if I took a wine display, and took it away from the wine section (and) put it on the other side of the store, I could sell more . . . and it happens. It works that way. I put Budweiser on the other side of the store, it sells better than in the cooler," Bellino said. "If you're telling me I can't put the Kendall-Jackson Chardonnay or the Busch Light anywhere near the chips that have a kid's finger on it . . . now, I got a real problem with that. If you're a small store, you're gonna hamstring people."
Bellino said he knows dirty actors are out there, but today's Senate bill would be tough for the owner of a liquor store with a small footprint.
Amy Drumm, the senior vice president of government affairs for the Michigan Retailers Association (MRA), told the committee it would be more appropriate to say her organization has concerns about SB 730, as opposed to being strictly opposed to it.
“We would like to see a definition added of 'immediately adjacent'," Drumm said.
She raised the question: if mixers for alcoholic beverages are placed across the aisle or on the same shelf as the booze, would a more than 2,500 square-foot store be in violation of SB 730? Furthermore, if the end-cap of an aisle features snacks, would that be too close to alcoholic beverages down the aisle?
A supporter of SB 730, Brett Visner, the vice president of public affairs for the Michigan Beer and Wine Wholesalers Association, said there's been "very concerning marketing and placement activity" in other states when it comes to co-branded alcoholic beverages. He's heard of alcoholic products being placed next to non-alcoholic versions, and even next to Matchbox Cars.
"Obviously, that is frankly despicable," Visner said. "Clearly, it's (targeting) children, and it has no place in the industry, and it is a stain on the industry as a whole."
SB 730 was discussed alongside Sen. Roger Hauck (R-Union Twp.)'s SB 731, which permits alcoholic beverage wholesalers to collect non-sufficient fund fees of $50-$300 from retailers who don't have enough money to compensate them.
Also featured in the conversation was SB 732 by Sen. Paul Wojno (D-Warren), requiring Michigan's Liquor Control Commission to conduct financial viability reviews when a liquor vendor has been flagged for failing to pay another vendor for liquor purchases at least three times in 12 consecutive months.
Other cases triggering a review consist of a vendor providing a minor with liquor at least two times in 12 consecutive months, a vendor being convicted of a financial crime like forgery or embezzlement or the vendor failing to pay sales or property taxes, as well as cash refunds for container deposits.
A local government could also adopt a resolution requesting the commission conduct a review of a vendor within their municipality. If the commission determines that the vendor is financially viable, the vendor would pay a $1,000 administrative fee into the Liquor Control Enforcement and License Investigation Revolving Fund. If the vendor is considered to not be financially viable, the vendor's license would be suspended for one year and placed in escrow.
"This applies to all licensees, not just retailers. Distributors and brewers…everybody's held to account under the bill," Visner said on SB 732, explaining how the legislation particularly addresses a problem with keg deposits.
He said, in the past years, there have been instances when brewers have "gone silent" when distributors are trying to return kegs.
"When a distributor picks up a keg from a supplier, they're charged a deposit, and they pass that along to the retailer, and when the distributor picks it up and then provides it back to the supplier, they return the keg to get their deposit back," Visner said. "Hundreds of kegs are sitting in a distributor's warehouse, and they have no ability to send them back…and get their deposits back, to the tune of hundreds of thousands of dollars."
The Senate Regulatory Affairs Committee took testimony on SB 730, SB 731 and SB 732 this morning.
