Alabama committee hears industry split over RTD franchise protections, tax changes

Members of the Alabama House Economic Development and Tourism Committee heard more than an hour of testimony on a bill that would change how ready-to-drink (RTD) alcoholic beverages are treated in state code and alter the tax threshold applied to those products.

Supporters from beverage distributors and manufacturers said the measure is a compromise that would allow RTDs to be sold outside agency stores, raise retail availability and protect local wholesalers. “These drinks are very popular. This is the fastest growing category in the beverage alcohol industry today across the country,” said Jimmy Marston, who identified himself as working with Gulfstreaming Company. Marston said his company operates five warehouses in Alabama and employs “over a thousand employees” in the state.

Brandon Owens, speaking for Alabama convenience-store licensees, said the proposal threatens small package stores that relied on prior licensing agreements. “When this bill passes... it would lock it in, when we say 34¢,” Owens said while describing concerns that a lower per-can tax would not rise with market prices and could reduce percentage-based local taxes. He noted municipal taxes such as Northport’s 7% liquor tax would be affected.

Virginia Bannister, representing the Alabama Beverage Association and member companies including Buffalo Rock and Coca-Cola United, described the bill as the product of compromise. “This bill represents a compromise that would allow our companies to competitively distribute these products,” Bannister told the committee, but she also said the industry historically opposes franchise language because it “restricts our company's ability to openly compete.”

Rep. Lipscomb, who took the floor during questions, said taxation remained the committee’s chief unresolved issue and offered a revenue projection discussed by proponents: that wider retail distribution could increase sales roughly fourfold and raise tax revenue, though he called that a projection rather than a certainty. “This is projection. That's all we can do,” he said.

Committee members flagged several technical and policy concerns. One member pointed to language on filing requirements in the draft — “the wholesaler shall file a monthly return no later than the fifteenth day of the second month” — and asked whether that aligned with existing practice. A sponsor’s representative answered that the timing was “the same it's the same as we are right now.”

Speakers from both sides told the committee the bill was not final. Committee Chair Wett said the hearing was for public comment only and that members would continue discussions offline. No committee vote was taken. The chair called for a motion to adjourn and the committee recessed.

The hearing included testimony on three overlapping issues: whether RTD products should be carved out of agency-only sales, whether wholesalers should receive franchise-like territorial protections, and what per-unit tax threshold should apply to RTDs. Lawmakers and witnesses emphasized that the proposal remains under negotiation and that taxation and franchise language are the chief sticking points.