A proposed fee increase on liquor at the Alabama Alcoholic Beverage Control Board’s warehouse would help pay for the new storage facility under construction in Montgomery, but it’s drawing some aggravation from state lawmakers.
Currently, liquor suppliers pay a 72-cent fee on each case of their product stored in an ABC warehouse until it is shipped to retail stores across the state.
The board wants to raise the fee via three incremental increases to $1.50 by 2028.
Board spokesman Daniel Dye told Alabama Daily News the increase is intended to help offset the costs of acquiring, operating and maintaining the new $98 million warehouse.
“We expect that some costs will increase, and some costs will decrease as we transition into the new facility,” Dye said. “Overall, we expect that costs will increase.”
Board officials last month told lawmakers paying for the new 250,000-square-foot building under construction and expected to open in about a year will slightly decrease in the short-term ABC’s contributions to state General Fund revenues, but will mean more money in the long term.
The Retirement Systems of Alabama is building the warehouse and it will be paid for from ABC’s operating expenses over 20 years. The board for several years has said its current main warehouse is too small and outdated to handle increasing demand for liquor sales in the state.
Almost every bottle of liquor sold in Alabama is first shipped out of ABC’s Montgomery warehouses. When fully implemented, the increase would generate additional revenue of more than $3 million per year. The fee in fiscal 2023 was worth about $2.9 million, according to ABC data in its most recently available annual report.
The three-member board is expected to vote on the fee increase later this month. It was on its agenda earlier this month, but a decision was delayed.
The ABC Board doesn’t need legislative approval to raise the fee and it wasn’t mentioned at last month’s hearing before lawmakers.
Senate General Fund budget committee chairman Sen. Greg Albritton, R-Range, said he’s concerned about the increase, which he said would likely result in higher prices for Alabamians.
“The ABC Board is functioning as if it is a private entity and if they’re going to be functioning like a private entity, maybe it ought to be one,” Albritton told Alabama Daily News.
Last year, lawmakers undid a decades-old prohibition on ABC owning its own warehouse space. The bill by Sen. Sam Givhan, R-Huntsville, passed the Senate unanimously.
But there are still some in the Legislature who think the state shouldn’t be in the liquor business. Sen. Arthur Orr, R-Decatur, has tried at different times to pass legislation that would privatize the state’s ABC stores. He doesn’t think that conversation should be over, he said Friday.
“I hope a Gov. Tuberville administration will strongly look at privatization of ABC operations,” Orr told ADN. “First retail, then wholesale. The government has no business competing against private mom and pop stores. Most states have already done this but Alabama clings to the past costing taxpayers more money all the while.”
He compared the situation to New York City mayoral candidate Zohran Mamdani, a self-described democratic socialist, pledging to have city run grocery stores
“If we were designing state government today, would we decide to set up subsidized government businesses competing against the private sector?” Orr said.
Board officials have argued over the years that the agency is a revenue generator and state control helps decrease underage alcohol purchases.