S.C. Statehouse Report
Feb. 1, 2004
VIEW: http://www.statehousereport.com/columns/04.0201.mini.htm

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Two ways to look at minibottles
By Andy Brack
SC Statehouse Report

FEB. 1 , 2004 - - Whenever someone from outside South Carolina sidles up to a bar here to get a liquor drink, they seem to never fail to make a comment:

"You use those little bottles from airplanes to make a drink?"

Yes, South Carolina is number one in the nation in using minibottles instead of big bottles in bars and restaurants. That's because it's the only state that requires use of the 1.7-ounce bottles.

For many, it seems kind of silly. Others complain drinks from minibottles are stronger than in places that have "free-pour" liquor. Others dispute that.

Minibottle proponents, however, claim a multitude of benefits from using the little bottles. Among other things, they say using minibottles ensures people will get a certain amount of liquor in a drink and will be certain of the brand in the drink. They also say the state benefits because it is easier from a quality control perspective to collect minibottle taxes from distributors instead making it part of drink sales.

For months, the SC Senate has been sitting on a bill that would let voters decide what they wanted to do about minibottles. Voters must decide because the state constitution requires bar drinks to come from bottles that are two ounces or less. So to change the law, the constitution has to change, which means voters have to amend the constitution.

Last week, liquor wholesalers, some restaurateurs and others ran a big ad in a Columbia newspaper to tout a study that claims the state would lose nearly $6 million annually if it got rid of minibottles.

The "Coalition for the Responsible Consumption of Alcohol" said it ran the ad to draw attention to the steady stream of revenue brought in by taxing minibottles 25 cents per bottle.



McLEMORE'S WORLD: Snowed under



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Contrary to popular notion, coalition members weren't fighting the keep minibottles because it generated more revenue, said member Bill Tovell of Columbia. In fact, there's no greater profit in minibottle liquor sales than from big bottle sales, he noted.

But he said changing the way the tax is collected - - at the point of purchase (a bar) - - would erode the state's ability to collect the tax effectively. Additionally by adding a sales tax to make up for the lost revenue, the price of drinks may rise.

Tovell, president and CEO of the state's largest liquor wholesaler, said when Florida changed liquor drink tax collections to the point of purchase a few years ago, the state lost millions in revenue - - something South Carolina can't afford in a budget crunch.

"I'm not worried about losing any revenue," said state economist Bill Gillespie. He said a plan to boost sales taxes by 5 percent on drinks to make up for minibottle revenue losses would essentially start out revenue neutral - - it wouldn't cost the state $6 million a year, according to an analysis by his office.

But over time with inflation, the state would start generating more revenue because sales taxes were based on percentages, while the current minibottle tax was a fee not indexed for inflation.

Insiders say the Senate may take up the minibottle legislation again in the coming week, although a filibuster by Sen. Phil Leventis, D-Sumter, may continue. Leventis says he wants members to determine how the law would change - - not just allow voters to say they wanted to change the constitution without a specific policy for them to consider.

If the dueling revenue studies are a wash, the issue seems to get down to a matter of convenience and preference.

For me, it's pretty simple: I'm sticking to beer.

Snowed under

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