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  • Writer's pictureVik F.

A Threat to Local Businesses and Consumers in Mississippi

Mississippi’s legislative move to increase the bailment fee on wine and spirits has raised significant concerns. If not vetoed by Governor Tate Reeves, the fee will increase from $1.00 to $1.50 per case, following a previous hike in 2022. This decision could impact both the economic landscape and consumer choices in the state.

This proposed fee increase will likely raise consumer prices, making every bottle of wine and spirits more expensive. With this hike, consumers, particularly those in border towns, might choose to purchase their alcohol in neighboring states like Tennessee, Louisiana, or Alabama, where prices may be lower.

The hospitality industry in Mississippi is still recovering from the pandemic and dealing with ongoing economic challenges such as staffing shortages, inflation, and supply chain disruptions. This fee increase would add financial strain to local bars, restaurants, and liquor stores, potentially forcing some to pass the additional costs onto their customers or, in some cases, close their doors altogether.

For new brands looking to enter the Mississippi market, this increased bailment fee represents a significant barrier. The higher costs associated with distributing products in the state could deter emerging brands from establishing a presence. This could limit consumer choices and stifle competition, ultimately affecting the quality and variety of products available to residents.

The long-term economic implications of this fee increase are also concerning. Critics argue that the fee acts more like a tax on the private sector to fund public infrastructure, specifically a new state alcohol warehouse expected to cost over $152 million. This places an unfair financial burden on private manufacturers and distributors, potentially hindering the sector's growth and sustainability.

Given these potential negative impacts, the American Distilled Spirits Alliance, the Distilled Spirits Council of the United States, and the Wine Institute have urged Governor Reeves to veto the proposed fee increase. They argue that the fee is both unfair and harmful to consumers and businesses in Mississippi. By vetoing the increase, the governor could help maintain Mississippi as a viable market for both existing and new beverage brands, supporting local jobs and aiding the state’s economic recovery.

The proposed bailment fee hike in Mississippi could have significant adverse effects on the beverage industry, from increased consumer prices and economic strain on local businesses to challenges for new brands entering the market. The decision now rests with Governor Reeves, who must carefully consider these factors as he decides whether to veto the legislation. Mississippi Local Business Threat



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