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Rules committee backs bill to tie spirits-distribution increases to CPI, allow one-time emergency funding
Summary
The Michigan House Rules Committee voted 9-0 to adopt a substitute and report House Bill 4422, which would tie distribution-fee increases for distilled spirits to the Consumer Price Index or 5 percent, authorize one-time emergency funding for the Michigan Liquor Control Commission, and clarify payment from existing statutory markup.
The Michigan House Rules Committee voted unanimously to adopt a substitute and report House Bill 4422 with recommendation after Representative Wenzel described the bill as a set of three changes intended to stabilize spirits distribution in Michigan.
Wenzel said the bill would tie future distribution-fee increases to the Consumer Price Index or 5 percent, whichever is less; authorize the Michigan Liquor Control Commission to secure one-time emergency funding if needed to maintain distribution; and clarify that distribution costs should be paid from the existing statutory markup that applies to spirit sales.
"This bill before you today proposes 3 common sense updates," Representative Wenzel said. "First, it ties future increases to distribution fees to the consumer price index or 5%, whatever is less. ... Second, it allows for the Liquor Control Commission to address immediate emergencies with one-time funding ... Third, it clarifies that these costs should be paid from the existing statutory markup."
Wenzel described the Michigan Liquor Control Commission as the state's wholesaler for distilled spirits and said the system handles a large revenue stream. In committee testimony the figure was cited as about $2 billion in business and more than $600 million a year that flows to the general fund, local law enforcement, and substance-abuse prevention programs.
A number of industry groups submitted cards supporting the bill but did not speak: Great Lakes Wine and Spirits; Edrington Spirits; the Michigan Spirits Association; Imperial Beverage; Distilled Spirits Council of the United States; RNDC Michigan; the Michigan Restaurant and Lodging Association; the Midwest Independent Retailers Association; and the Michigan Licensed Beverage Association.
The committee adopted substitute H-1 for House Bill 4422 and then reported the bill with recommendation as substitute H-1 by recorded votes of 9 yays, 0 nays, 0 pass. Committee members completed the actions without further debate.
The substitute and committee recommendation now send the measure onward for additional House consideration.
