By Molly M. Fleming
The Journal Record
OKLAHOMA CITY – A Tulsa-based wine and spirits distributor is trying to rally a change in the state’s distribution laws, though other distributors have already adjusted to the new system.
Boardwalk Distribution of Tulsa owner Bryan Hendershot said he estimates that year-over-year his business will have lost $100 million in sales by Oct. 1, 2019. He’s also had to lay off 30 people because his sales have dropped so dramatically since the new liquor laws went into place.
That’s why he’s trying to get the amended Senate Bill 608 into law. The bill would give liquor and wine makers more options when it comes to distribution, which he said would help his business.
The bill was approved by the House of Representatives’ Judiciary Committee on Tuesday. It will be heard by the full House next, before it goes back to the full Senate for a vote.
The amended SB 608 could create a compromise between distribution before Oct. 1, 2018, and the system since the new laws went into place. Before the laws changed Oct. 1, 2018, wine and spirits makers from the top-selling 18 brands were required to sell their product to every distributor in the state. The distributors were required to list the percentage markup for every item before it was sold.
When the laws changed, the top wine and spirits makers could pick a distributor. Hendershot said he didn’t get any of those top products.
“The top 100 brands are 80% of the liquor store,” he said.
Because he doesn’t have those products, it’s hard for him to fill up his truck and make runs across the state. He doesn’t have as much product to sell.
In the amended SB 608, all of the top wine and spirits brands would be offered to all of the distributors in the state. The wine and spirits wholesalers would have to provide a sworn affidavit stating their top-25-sold spirits and wines every 60 days. The affidavit would be collected by the Alcoholic Beverage Laws Enforcement Commission.
The Oct. 1, 2018 distribution laws also allowed in-state wholesalers to have out-of-state ownership. Republic National Distributing Co. bought into Oklahoma City-based Central Liquor, owned by the Naifeh family, and Southern Glazer’s bought into Tulsa-based Jarboe Sales Co., owned by the Jarboe family.
Hendershot said the way the new laws are written, there will never be a company that can come here and compete without access to the top 100 brands.
Southern Glazer’s Wine and Spirits of Oklahoma Partner J.B. Jarboe said the company opposes the changes proposed in SB 608. He said Jarboe Sales spent millions of dollars updating its own systems and buying trucks to service the entire state. With wine going into convenience and grocery stores, Jarboe Sales took on nearly 4,000 new customers when the laws changed.
Jarboe said he thinks SB 608 could be unconstitutional. The distribution change was part of the laws approved by voters in 2016.
“The people of Oklahoma voted in a law less than six months ago,” said Jarboe. “We’ve worked hard to make the changes to our business in order to satisfy the new market and all the new changes in the law.”
He took offense to statements made during Tuesday’s Judiciary Committee meeting. The company was called an out-of-state wholesaler, he said, though that’s not true. His family has been selling wine, beer, and spirits in the state since 1959.
“We feel like the Judiciary Committee was intentionally misled yesterday,” he said. “It’s not only bad policy, but it’s mean-spirited if nothing else. We haven’t had six months to get this market to an orderly place.”