During a House State Affairs Committee hearing Tuesday, lawmakers questioned Department of Revenue Commissioner Chris Graham about widespread alcohol shipment delays that began in January and have stretched on for weeks.
Graham attributed the dysfunction to the state ABC warehouse’s shift from an automated conveyor system to a more manual process of filling orders. He told lawmakers that change was necessary after the warehouse implemented new management software only to find it wasn’t compatible with the old conveyor belts used to load trucks.
“We really crawled for a couple of weeks on shipping cases because of the challenges that they had with their system and getting it in place,” Graham said.
ABC is now operating extended hours, in some cases close to 24 hours a day, as officials attempt to clear a growing backlog.
“We are continuing to add staff. We have added some temporary staff to provide support. We're not sitting still,” Graham said.
Mississippi is one of 16 states where the government controls the wholesale distribution of liquor. So the slowdown is not only hitting private businesses' pocket books, but also the state’s general fund.
Graham told lawmakers that January alcohol markup collections, which typically total around $10 million, are projected to come in at less than half that.
Retailers from across Mississippi testified that the delays are creating cash flow problems and uncertainty in their operations.
Anne-Marie Smith, operations manager of Raines Cellars in Flora, told lawmakers she learned of a short shipment while she was testifying before the committee.
“One of my employees just sent me a text that we received five cases. So I've been charged for 35, they haven't shown up and I just sat through a meeting where they said that that's not happening anymore,” Smith said. “And I'm not the only one.”
Several store owners described being billed for full shipments despite receiving only partial deliveries and lengthy delays in getting refunds.
Graham acknowledged there were billing errors early in the transition and encouraged lawmakers to forward specific cases for review.
Rep. Stacey Wilkes, R-Picayune, said independent retailers are particularly vulnerable to these disruptions.
“I'm very concerned with our small businesses, our independent package stores. They're suffering greatly because of this problem,” Wilkes said.
Some lawmakers raised the possibility of temporarily adjusting the state’s first-in, first-out shipping policy, which requires ABC to fill orders in the order they are received. Smaller retailers have argued that high-volume stores appear to receive repeated shipments while others wait weeks. But Graham said the first-in, first-out requirement is statutory so it’s not an option for easing current pressures.
The effects extend beyond package stores. Larry Gregory, executive director of the Mississippi Gaming and Hospitality Association, said casinos and restaurants are also experiencing shortages.
“Believe it or not, some of the people that visit our casinos drink. And they're amazed at times in the last few weeks when we say, hey, we don't have anything for you,” Gregory said.
Mississippi’s casino industry generated roughly $2.4 billion in gaming revenue last year. Hospitality representatives warned that continued shortages could damage visitor experience and local tourism economies, especially Mardi Gras season on the Gulf Coast.
Restaurant operators told lawmakers they have been forced to rewrite wine lists weekly and, in some cases, scramble to source product from other retailers to stay operational.
Several speakers urged lawmakers to implement a “will-call” system allowing retailers to pick up orders directly from the warehouse rather than waiting for delivery.
Graham said the current warehouse lacks sufficient loading doors and space to implement a full will-call option, but said the new warehouse under construction would enable that operational shift.
Some industry representatives also floated temporary measures like allowing bulk buyers to source product directly from suppliers to prevent the ABC backlog from growing further. No formal proposal has been adopted.
Graham told lawmakers he hopes the backlog will be cut in half by March and fully resolved by May. In the meantime, committee members indicated they are weighing potential regulatory or legislative changes to address the issue.
