Tuesday, April 29, 2014

Memphis Restaurant Association Urges Veto of "COD" Bill

Posted By on Tue, Apr 29, 2014 at 11:59 AM

Representative Curry Todd (R-Collierville) has ticked off the Memphis Restaurant Association big-time. According to an MRA email alert, Todd attached an amendment lobbied for by wholesale liquor distributors to a non-related bill dealing with wineries. The amendment requires COD payment for any liquor delivered to restaurants, instead of the current 10-day window allowed for payment.
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Below is the full text of the MRA email:

MRA Member,

On behalf of MRA President, Patrick Reilly, and the Board of Directors, we ask you to please take action TODAY!

Please reach out to the Governor and ask him to "VETO" HB 2027 / SB 2415 - At the bottom of this email you can click on the link to send a "Veto" letter. The amended version of the bill, specifically amendment number three restricts the terms of payment from restaurants and hotels to wholesalers so that the wholesalers are guaranteed payment at the time of delivery of alcoholic beverages. The old rule / current law allows for 10 days to pay for the liquor.

The amended bill is unanimously and vigorously opposed by the Tennessee Hospitality and Tourism Association (TnHTA). Since the creation of the three tier system, restaurants and hotels have had a ten day window by which to pay invoices to the wholesalers. This ten day window is critical to the industry and especially to smaller operators with limited purchasing power. Please contact the Governor office and ask for him to "Veto" HB 2027 / SB 2415. letter from the association:

Governor's Office Contact Info:

Email: bill.haslam@tn.gov

Phone: 615-741-2001

Intro & Background:

During the last days of the legislative session, the liquor wholesale lobby attached an amendment by Representative Curry Todd onto a piece of legislation related to manufactures of distilled spirits.

The amendment says: "In order to facilitate the prompt payment of state taxes imposed upon wholesalers, payment for all sales to any licensee holding a license under this part by a wholesaler shall be made upon delivery of the product and shall be made by electronic funds transfer, credit card, debit card, or such other method as approved by the commission that will facilitate full payment at or near the time of delivery."

The amendment applies only to liquor by the drink establishments and replaces the old "ten day rule," which read, "No holder of a license for the sale of alcoholic beverages for wholesale or retail shall sell, deliver, or cause, permit or procure to be sold or delivered, any alcoholic beverages on credit, except that holders of wholesale licenses may sell on not more than ten (10) days' credit."

Talking Points:

1. During the last days of session, the liquor wholesale lobby (potentially a few of the larger ones) attached an amendment by Representative Curry Todd onto HB2027 / SB2415 related to wineries. This was done with no discussion between the affected parties and without any discussion in committee, which is the normal transparent procedure. In fact, the amendment was described on the floor of the House as affecting the ways that payments could be made to the Tennessee Alcoholic Beverage Commission. The passage of this amendment will completely change the landscape of relations between wholesalers and retailers with a grand total of 15 seconds of debate on the House floor. It is clear that there was no open and full debate about this amendment.

2. There was no discussion with TnHTA or any of our Restaurant or Hotel members on how this could affect the hospitality industry. Since the creation of the three tier system, restaurants and hotels have had a ten day window by which to pay invoices to the wholesalers. This ten day window is critical to the industry and especially to smaller operators with limited purchasing power. This bill huts small businesses that are the backbone of the TN economy.

3. There was no agreement from anyone in our industry for any changes to the current process.

4. The amended bill treats restaurants and hotels differently from retail package stores, a change that is fundamentally unfair for businesses that sell the same liquor products.

5. The amended bill places into law contractual matters between two private parties. The TnHTA believes that if changes to these provisions of law are to be made, they should seek to lessen state involvement in private contracts, not require more onerous terms.

6. Some liquor wholesalers contend they did not know about the change - if that is true, ask them to help you as their customer and ask for the Governor to "Veto" the bill.

7. Overall, we are asking for the Governor to "Veto" HB2027/SB2415 and we are asking for immediate relief on this issue. This only hurts an industry that is the second largest in Tennessee and creates more than $16 billion dollars in economic impact, employs over 270,000 Tennesseans and pays more than $1 Billion in taxes to the government.

These are general talking points - also please reach out to your wholesalers and put the heat on them. Thank you for your help.

Greg Adkins

CEO/President

Tennessee Hospitality & Tourism Association

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