Opening the hearing, Mr. Zuber declared "This hearing is about finding a solution that's timely. We're not just frustrated, we're upset because this has gone on for long enough," as he pounded the table with his fist. as Department of Revenue Commissioner Chris Graham took his place on the hot seat.
Commissioner Graham dutifully took his place on the hot seat as legislator after legislator grilled him. Mr. Zuber quizzed the Commissioner: "I want three questions answered, Chris: 1. How in the hell did we get here? 2. What is the department's solution? and 3. How long will it take to solve the problem?"
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| Hank Zuber grills Commissioner Graham |
Mr. Graham began by recounting some ABC history. The legislature passed a bill in 2022 that allowed ABC to hire a private company to manage the warehouse and authorized a new warehouse. The new warehouse will double the size of the current warehouse and should open by early next year. Construction is running on schedule.
The Commissioner explained the warehouse management software that was purchased in 2003 was no longer supported and would not receive updates. The decision was made to "transition" to new software at the beginning of the year.
"We immediately recognized there was a problem. They sent experienced people and executives to solve the issues. We limped for three weeks until they solved it," said Mr. Graham. Left unsaid was the software was installed without beta testing and did not communicate with ABC's MARS software system. The new warehouse will use a different software system when it opens.
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| Commissioner Graham on the hot seat |
A positive Commissioner said "as of last week, we are back to a base level line of operations. We think the operator will ship 250,000 cases this month. We think next month they can ramp up operations even further. We think at the end of March, the backlog will be reduced in half. Hopefully we won't have a backlog in two months."
The assurances did not quell the Chairman's frustration: "What are we going to do in the meantime? What is the solution in the next two to three months to meet demand?" "We will start getting into the backlog in the next couple of weeks," promised the Commissioner.
Mr. Zuber asked if ABC could implement Will Call at the warehouse so ABC customers could pick up their orders. Mr. Graham replied the antiquated warehouse does not have the space nor enough shipping doors to use a Will Call option. However, he said ABC should be able to use Will Call in the new warehouse.
After Mr. Graham said the warehouse employees are working six days a week, Mr. Zuber moved to the subject of the removal of the conveyor belt system. The Chairman questioned why Ruan chose to remove the system at the same time it was also installing new software.
The Commissioner said there were no solutions if the conveyor system "went down." The warehouse would be "dead in the water." He stressed it was obsolete and replacement parts were no longer available. Thus, Ruan switched to the pick a pallet system it uses in other states. Replacing the converyor system with a new one was not an option as the warehouse would have to shut down for 30-60 days. Ironically, the new warehouse will use the conveyor system.
Upon questioning by Mr. Zuber, Commissioner Graham said Ruan has a performance bond of $4 million. The State Representative suggested invoking it to help small businesses that are struggling.
Other Representatives took their turn at bat as Mr. Graham played a piñata. State Representative Shanda Yates was critical: "So our baseline is failure? I have a hard time processing that." "I may have misspoke by saying that. The number of cases we expect to ship this time of year, we will hit that number this month," replied the Commissioner.
Ms. Yates asked if ABC had considered allowing direct shipping until it got caught up at the end of May. The Commissioner said ABC "looked at that during the pandemic but we couldn't come up with a uniform way to make it work. Our goal is to increase production."
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| State Representatives Shanda Yates & Celeste Hurst |
ABC's implosion is causing cash flow problems for the smaller customers. Ms. Yates groused numerous businesses are billed when they place an order but they are "not receiving their order or some of the order even though they have paid for it. A lot of them don't have the cash flow to float that."
"We place the order, the order is picked. They should be billed when it is shipped. We have seen a couple of cases where they go out but the delivery takes a little longer. There shouldn't be a widespread mistake of billing and receiving product," answered Mr. Graham. Ms. Yates said more than a dozen package store and restaurant owners across the state are having "these issues."
The State Representative closed by urging Mr. Graham to allow customers to temporarily use direct shipping.
Although not a member of the committee, State Representative Trey Lamar jumped in to get some answers.
"The warehouse was not getting it done and is still not getting it done," said the Speaker Pro-Tem. Mr. Lamar lectured the Commissioner "We could have fixed this issue in '21 and gotten out of the business, have the private sector build a warehouse in a year or less. Now we are sitting here in a situation in 2026 where businesses are on hold. You're telling us you'll get caught up in the next few months but really not until the new warehouse becomes operable."
M. Lamar said ABC should give customers the ability to direct ship until the new warehouse opened for business. "Cut ABC out of it until it gets it's act together," he said. Mr. Graham said he believed ABC "can make it through the end of the year."
Another State Representative said ABC customers are having their accounts frozen because they can't get timely refunds. Mr. Graham replied refunds should take a week or less.
Mr. Graham disclosed Ruan suffers no penalties for delays but gets paid on production. Thus it has an incentive to ship more cases but suffers no penalty if it fails to ship product.
The Commissioner moved after spending 45 minutes on the hot seat. Anne Marie Smith, owner of Raines Cellars in Flora, testified before the committee. She challenged Commissioner Graham that the system was getting better.
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| Anne Marie Smith testifies |
"My biggest problem is the conveyor belt. Commissioner Graham said they were taking the least amounts and things were improving but while we were sitting in this meeting, I had an order that was schedule for today of 35 cases. It was charged to my account. One of my employees texted me that we received 5 cases. I've been charged for 35, they haven't show up, and I'm sitting here in a meeting where they say that's not happening," said a frustrated Ms. Smith.
The wine store owner also pointed out Ruan removed the reshipping option for missed orders. If an order was missed, ABC could ship it the next day if notified by the customer. Ms. Smith said she now has to add the missed shipment to her order and "wait another month to get it."
She spelled out how bad things were as she pointed out there were restaurants in the Jackson area that did not have any product on Valentine's Day, their busiest day of the year.
Even the casinos are suffering. The Beau Rivage's Anthony Delvescovo admitted "This year has been quite difficult. Sympathizing with the "mom and pops", he said ABC should allow the casinos to use direct shipping. "The casino industry, we may be bogging down the system because our orders are rather big. If allowed to direct ship to casinos, that would relieve pressure points for the smaller customers. If it's possible, we could get a waiver for two or three months."
Several package store owners told this correspondent they liked Mr. Delvescovo's idea as it would remove big orders from the que and speed up their shipments.
No similar hearings are scheduled in the State Senate.
Kingfish note: The main message from ABC was for customers to hang on while things get sorted out. Legislators and the Governor's office are getting bombarded with phone calls from ABC customers. One representative groused there was little they could do as any legislation passed would die in the Senate.
20 comments:
Governor Lamar & LT Governor Yates sounds great to me.
Fire Chris Graham.
This is essentially grift and graft under the guise of public service. Chris Graham’s lifetime of government positions has become a personal excuse for poor legal training that never succeeded in the private legal marketplace. Now he holds influence over contracts, budgets, and regulatory enforcement—areas that, in this case, have produced a catastrophic supply chain failure. He is an overpaid lackey, driven by ego, with accountability that is weak at best.
This pattern extends beyond the ABC warehouse debacle. Short-term attorneys often lack the operational, management, and real-world experience required for such critical positions. They lean on third-party consultants, contractors, and flashy “solutions”—like spraying water on interstates before an ice storm without plows or salt ready to follow up—which can create spectacular failures, all while they continue drawing a government paycheck.
Fire Chris Graham. He is a failure.
Disagree. Chris is a good guy who inherited a mess. But I do agree that the state just needs to get out of distributing. Period.
I’m not seeing answers. If I need 100 cases of product someone needs to show me how to obtain that product today. Drive to TN? Drive to LA? Drive to AL? If I’m in this spot that’s exactly what I would do.
Another State Representative said ABC customers are having their accounts frozen because they can't get timely refunds. Mr. Graham replied refunds should take a week or less.
Mr. Graham disclosed Ruan suffers no penalties for delays but gets paid on production. Thus it has an incentive to ship more cases but suffers no penalty if it fails to ship product.
So this is how it CURRENTLY works?
1. The customer places an order.
2.The contractor gets paid based on the number of cases shipped to the customer. The more cases shipped to the customer the more the contractor gets paid. The contractor gets paid the same whether or not the customer actually ordered what the contractor is getting paid to ship to them.
3. The customer is billed as soon as the order ships. the customer is billed for the full order, even if some (or most) of what they ordered is not shipped.
4. Upon delivery it's the customer and driver that have to compare what was shipped with what was ordered.
5. The customer then reports the shortages and the waiting for a refund starts.
6. The customer also has to place a new order for what they have already paid for but did not receive. This is necessary because the shipping and ordering quantities can't be reconciled before the truck leaves the warehouse.
7. Repeat the above steps until something changes.
YOU CAN'T MAKE THIS STUPIDITY UP!!!
This is why government should be small. There is absolutely no reason that the State hasn't already offered alternatives but because it is so big and entrenched in almost everything, it can't move nimbly to be creative in these types of situations.
I can assure you there are restaurants probably doing just that.
We have several machine shops that will fabricate needed parts for that conveyer system about as quickly and cheaply as ordering if they were available which should have been the case as the whole place is being abandoned so soon. When us that have TAP accounts mess up, The Department of Revenue of the State of Mississippi is so hard on us that the general public would not believe it. The place is rotten in what it will do to people. Some Auditors will make up infractions, lie about it and cost you tons of money. When they make errors they say just be patient. All of these businesses not making income still have to pay all expenses, rent, labor, insurances etc. The DOR get off Scott free like they always do while people trying to earn a living get hosed by them.
For being a Baptist State and the buckle of the Bible belt, there sure are a lot of alcoholics in Mississippi
In the private sector, people get fired for this and the mess gets cleaned up fast. Whenever it's a government operation they get together for a confab and talk about it. But the mess goes merrily on.
When it was time to contract out the liquor distribution you had the ABC and DOR brain trust negotiating with a billion dollar company.
This is how the state ends up signing a contract with a performance bond, but without any concrete performance metrics.
The government operators always have a bunch of meetings after a big public screwup. They need to decide if they will make the same screw up again, or if they need to invent a new way to screw up next time.
I don't drink 11:12, but if I point out government incompetence in the distribution of the product, are you suggesting that makes me a drunk?
Seems a pretty illogical leap.
This is sobering but there have been delivery issues with MsABC for years.If you make one trip over to a Total Wine and More in Louisiana, which are typically the size of a small Walmart, you wonder why the people of Mississippi continue to be punished by an antiquated system controlled by state government. I guess since we were the last to end Prohibition In 1966 we will be the last to allow the citizens to enjoy a free market for the sale and distribution of wine and liquor. I will keep going to Louisiana for the best selections and prices until lawmakers learn to their use brains as intended even if the Baptist don’t agree.
If you've ever had any dealings with MDOR you know they are the least business-friendly, most difficult part of state government to deal with. No surprise this is happening on their watch. It is utter insanity that all liquor and wine sold in the state passes through a warehouse in Cuckstadt.
Hope you feel better, Kingfish.
I say again, I wish Steve Holland was still in the House and at this hearing.
Shias dont recognize Sunni.
Catholics dont recognize Protestants for communion.
Baptists dont recognize each other in the liquor store.
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