The Association raised objection to split case fees starting in 2017. These split case fees, which started at less than $1.00 per case when first instituted, are supposed to compensate wholesalers for the additional cost of breaking up a case to sell the bottles individually (not including delivery which is charged separately). But the wholesalers stopped seeking approval from the Authority when they raised the fee some time ago and the SLA apparently didn’t care. The fee that started at under $1.00 has now grown to $30 per case or higher in some cases.
After several years of discussions with the Authority and the Legislature, we filed a complaint with the State Liquor Authority against Empire Merchants and Southern Glazer Wine & Spirits last year. Our claim was simple – these wholesalers were charging split case fees substantially higher than allowed by the Authority’s Rules and Regulations. The wholesalers took the position that the regulation in question didn’t matter because a court decision had overturned the law on which the regulation is based and the law was repealed by the Legislature.
The Liquor Authority took nearly eight months to consider our opposing positions and informed us at the end of February that they agreed that the split case fee regulation is valid. However, since the cap hasn’t been enforced in many years, the SLA is contemplating either raising the cap to reflect the current market or eliminating split case fees. They have started discussions (separately) with the wholesalers and retailer associations about how to address this question. Any change in the regulation will take several months to put in place so we’re exploring options for a more-timely solution.