Michigan Reps Introduce Bills to Amend Liquor Code

Chamber Advocacy Pays Off

By Cal Abbo

Legislators in the Michigan House of Representatives have introduced two bipartisan bills to amend Public Act 58, which is widely referred to as the liquor code. After months of advocacy and planning by the Chaldean American Chamber of Commerce (CACC) on behalf of the Chaldean community’s liquor store and supermarket owners, the bills can finally be considered by elected representatives.

For decades, the Chaldean community has entrenched its position in metro Detroit by selling liquor at convenience stores and supermarkets. The structure of these businesses bodes particularly well for an immigrant to raise their family and tap their community for help. Now, stores that sell liquor may be getting a raise.

There are two bills being proposed to help retailers. The first, House Bill (HB) 4757, amends the liquor control code of 1998 and increases the state minimum percentage profit earned on liquor sales. The second bill, HB 4758, would restrict the Michigan Liquor Control Commission from considering violations of the liquor code older than two years when it decides to issue, deny, suspend, or revoke a license.

As someone who grew up in metro Detroit, Representative Samantha Steckloff, who represents Farmington and Farmington Hills, said she knows the value of neighborhood liquor stores. That’s why she sponsored both bills. “I am so proud to sponsor this bipartisan package that would ease the Michigan Liquor Control Code,” she said. Steckloff added that this package will help small business owners thrive, boosting our economy. Currently, small business liquor retailers face stiff competition from big box stores alongside rising wages and costs.

At the current moment, the state minimum retail price for a bottle of liquor is set at a fixed 17% higher than what a retailer purchased the item for. In recent decades, big-box and corporate stores have taken control of the liquor market. As large businesses that make money through high volume of sales, they can afford to sell liquor at the state minimums, which forces small business owners to do the same to compete.

The current margin of 17% on liquor, however, fails to cover the overhead costs of many small businesses. One study used by the CACC said it costs the average liquor store owner 24% of their gross profit just to stay open. Effectively, small stores are taking a loss on liquor sales. If this bill passes, that number will change to 35%, doubling the margin for big-box and small business owners alike and allowing them to make a profit. The margin of 35% aligns more closely with the average markup in other states, according to the CACC.

Representative Graham Filler, who sponsored HB 4578 and represents a rural district that overlaps with Saginaw, Gratiot, and Clinton counties, wants to help reduce the bureaucratic burden on small business owners. “I have been talking for years with Martin Manna, the Chaldean community, and other small business owners about the best way the Michigan Legislature can support small businesses, including convenience stores,” he said.

Tom Kuhn represents mainly Troy and Sterling Heights. He sponsored both bills, and recognized the CACC as the primary reason for the potential changes to the liquor code. “The Chaldean American Chamber of Commerce has served as the catalyst, educating legislators on behalf of local businesses,” he said, adding that without the CACC’s leadership, the bills would not have been introduced.

Overall, Michigan legislators offered the bipartisan nature of the bills as the main reason it has staying power and the potential to pass the legislature.