There's a New Kid in Town: Tennessee Liquor by the Drink Has New Chief

Keith Bell accepted an appointment by the Tennessee ABC to serve as Assistant Director, at yesterday's ABC meeting. We hear he starts Monday October 3.

The Assistant Director has historically been in charge of restaurants, hotels and other on-premise LBD licensees. We expect Mr. Bell will assume the role of LBD chief from TABC Director Danielle Elks, who has been filing in for Caroline Smith for nearly a year after her resignation.

Mr. Bell will have to become indoctrinated in the byzantine laws and unwritten customs that are all too familiar to industry insiders.

Mr. Bell most recently comes from a real estate title company in Hendersonville. He is a 1982 grad of the University of Tennessee law school.

In other LBD news, reliable sources report that Nashville ABC front desk staffer Melissa is being trained to take over LBD renewals for Grace, whose last day is this Friday. Melissa will be sorely missed at the front desk, but we wish her well with handling the huge volume of renewals.

Stay tuned for more.

Purgatory for Tennessee Liquor License Renewals?

Renewing restaurant, hotel and liquor-by-the-drink licenses in Tennessee has never been painless. Busy staff regularly forget to pass along the renewal paperwork to corporate. Even after filing, renewals are often delayed - and citations issued - because Revenue shows taxes due or reports LBD bond issues. Exacerbating the frustration, Revenue records frequently show taxes owed, when in fact, no taxes are due.

Hold on to your seats. Things are poised to get worse.

Longtime Nashville Tennessee ABC renewal staffer Grace Buchanan is leaving for a new gig at Vanderbilt this Friday.

Tennessee LDB staff have been stretched thin for nearly a year. ABC Director Danielle Elks has been covering for two vacant staff attorney positions. The ABC handles thousands of LBD licensees, without the benefit of modern computer systems.

To make matters worse, Tracey Richards at Revenue, who gives tax clearance and manages bonds, has been promoted and transferred, leaving her colleague, Rondle John, and supervisor Martha Potter to handle LBD tax clearance and bonds for the entire state. Their job is complicated by ancient technology that often shows incorrect tax data, for no apparent reason.

We hear that there are no plans to replace either Grace at the ABC or Tracey at Revenue. Despite both positions being critical to a large source of tax revenue (LBD pays up to 24.75% tax on sales), the state hiring freeze may mean the positions remain vacant indefintely.

Renewals could be considerably more complicated for some time. Welcome to Hades.

Wine in Tennessee Groceries: Worthy Progeny of the Whiskey Rebellion

Controversy surrounding alcoholic beverages is not a new phenomenon. Tennessee is currently torn by the debate over wine in grocery stores. But alcohol has divided Americans politically since our nation was born, often causing unusual alliances like the coalition of conservative church groups, liquor wholesalers and liquor store owners that currently oppose wine in grocery stores in Tennessee.

The Whiskey Rebellion is a fascinating nugget from the colorful history of alcohol, worthy of reflection.

The Whiskey Tax was the very first federal internal revenue tax, levied in 1791 to help pay for revolutionary war debt. The tax divided large and small distillers, by taxing smaller distillers at about twice the rate as large distillers.

The tax also pitted more-established Eastern towns, home to larger distillers, against frontier areas with small distilleries, where distilling crops to whiskey was one of the few ways to make money to purchase essential goods. Hauling whiskey by wagon on mud roads over the Appalachian Mountains was a much easier way for farmers to make money than trying to haul corn or other crops.

The tax - and unfairness of the tax for small distilleries in the frontier - fueled discontent about the lack of federal support for basic frontier needs, like troops to protect frontier towns from Native American attacks. Federal revenue agents were tarred and feathered, and eventually, frontier folks rose in arms in Western Pennsylvania.

The dispute ultimately lead President Washington to become the only sitting President to command troops in battle. The insurrection was quashed and the federal government's ability to tax was firmly established. The tax also established the government's ability to require every distillery to register.

The TTB has a great article about the rebellion here.

No Krogering for Beer in Memphis?

A few days ago according to a reliable source, Memphis police visited a Kroger store and told the store to stop selling beer because some of the employees did not have Memphis employee cards. Memphis police were reported as advising Kroger that beer sales should be halted in any Memphis store where employees lacked the Memphis employee card.

We blogged about the card last month. Every employee that touches beer in Memphis must have a card, unless they have an ABC server permit card. The card costs $50 and requires a TBI background check.

We wondered if Memphis police would enforce the requirement. The Kroger raid shows that Memphis is serious.

The raid has drawn attention from several large retail chains concerned about compliance with the law. Reliable sources report that the Mayor of Memphis unofficially asked the police chief to stop enforcing the law for the next 30 days, presumably to allow retailers time to come into compliance.

Several industry members are using the unofficial moratorium to advocate against the law, hoping to repeal or simplify the employee registration requirement. We see the law as an expensive and burdensome requirement that does little to prevent sales to minors, or promote other legitimate regulatory concerns.

The employee card requirement also appears to exceed the city's power to regulate beer, making it illegal.

We encourage retailers and Memphis wholesalers to speak up quickly to help bring balance to the debate.