texas package stores association 65 th annual convention “facing the future together” sherry...
TRANSCRIPT
Texas Package Stores Association65th Annual Convention
“Facing the Future Together”
Sherry Cook, TABC AdministratorDallas, Texas - August 6, 2012
• Industry Growth• Delinquent List• 83rd Legislative Session
– Interim Charge on Licensing Process– Code Inconsistencies and “Leveling
the Playing Field”– Package Store Issues– LAR Exceptional Items
• TABC Organization
“Facing the Future Together”
Local Option ElectionsFY 2008 – FY 2012
FY 2008 FY 2009 FY 2010 FY 2011 FY 20120
10
20
30
40
50
60
70
80
90
66
8375
86
475161
52
66
36
ElectionsJurisdictions Holding Elections
76% Overall
Success Rate
May 199829 Wet Counties54 Dry Counties
June 201246 Wet Counties22 Dry Counties
Wet / Dry Counties1998 and 2012
Growth is expected to continue at anaverage rate of two percent annually.
Growth of Texas Businesses
2008 2009 2010 2011 201238,000
40,000
42,000
44,000
46,000
48,000
50,000
41,47142,090
43,619
47,310
45,422
42,04742,690
44,283
48,059
46,201
As of July 15th of each year.
Licensed Retailers
All Licensed Businesses
Texas Package Stores
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20122,000
2,100
2,200
2,300
2,400
2,500
2,600
2,700
2,171
2,2092,249
2,296
2,393
2,364
2,3762,417
2,4292,457
2,642
2,489
14.6% growth from July 2001-July 2012
FY 06 FY 07 FY 08 FY 09 FY 10 FY 2011 FY 2012* est
610,000,000
620,000,000
630,000,000
640,000,000
650,000,000
660,000,000
670,000,000
680,000,000
690,000,000
700,000,000
642,963,576647,611,244
678,614,857
689,626,550
669,452,000
684,162,737
692,435,567
Gal
lons
Wholesale Alcohol Sales in Texas8% growth FY06-FY12
692 million gallons of alcohol to be sold in Texas in FY 2012.
Distilled Spirits Sales in Texas
FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12* est
22,000,000
23,000,000
24,000,000
25,000,000
26,000,000
27,000,000
28,000,000
29,000,000
30,000,000
31,000,000
24,200,743
25,303,413
27,566,94527,469,924
27,854,240
29,563,292
30,856,328
Gal
lons
22% growth FY06-FY12
Wholesale AB Sales in Texas Growth FY08-09, FY09-10, FY10-11, FY11-12*
-6%-4%-2%0%2%4%6%8%
10%12%14%16%
10%
0%
3%1% 1%
13%
1%
4%
-5%-3%
8%
6%8%
1%2%
15%
4%
8%
-1%
1%
FY 08-09
FY 09-10
FY10-11
FY11-12**Estimate
Ale Spirits Wine
Beer
TOTAL
Texas Wineries and Gallons Produced (in millions)
64 7589
116132 139
151
189 195
1517
3839 33
4558
4362
1.922.08 2.22 2.21
2.52
2.96
3.05 3.28 2.93
0
0.5
1
1.5
2
2.5
3
3.5
0
40
80
120
160
200
240
280
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12* est
Mil
lio
ns
of
Gal
lon
s
Nu
mb
er o
f Te
xas
Win
erie
s
Wineries Not Producing
WineriesProducing
Gallons of Wine Produced
Number of active winery permits at the end of the fiscal year.
0
381
573
749878
979 1017 1069
59,392
163,299
199,980
250,529
347,254389,309
462,309
0
200
400
600
800
1000
1200
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12*
Num
ber o
f Dir
ect S
hipp
ers
Gal
lons
Shi
pped
(est)
Out of State Winery Direct Shippers and Gallons Shipped
Number of active permits throughout the year.First Direct Shipper permits were issued on 10/24/05.
Texas Distilleries and Gallons Produced (in millions)
3 3
710
8
12
18
25
33
68 10
13
19
0.58 m
0.63 m1.22 m
1.80 m2.59 m
0
0.5
1
1.5
2
2.5
3
0
5
10
15
20
25
30
35
2004 2005 2006 2007 2008 2009 2010 2011 2012*
Mill
ion
Gal
lon
s
Nu
mb
er o
f Tex
as D
istil
leri
es Total
Producing
Million Gallons
Number of active permits throughout the year.
Data on number producing and amount produced not available prior to 2008.
Number of active permits on December 31st.Small Brewery = Producing less than 75K bbls/year
Data on number producing and amount produced not available prior to 2008.
2004 2005 2006 2007 2008 2009 2010 2011 2012*0
5
10
15
20
25
30
35
40
45
50
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
6 6 7 8 9 9
17
36
44
8 8 8
16
30
1.41.9
2.3
1.4 m1.9 m
Active PermitsPermits ProducingAle/Beer Produced
Num
ber o
f Sm
all B
rew
erie
s
Mill
ions
of G
allo
ns
Small Texas Breweries and Gallons Produced (in millions)
Number of active permits at the end of the year.Data on number producing and amount produced not available prior to 2009.
2004 2005 2006 2007 2008 2009 2010 2011 2012*0
5
10
15
20
25
30
35
40
45
50
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
24 23 23 24 2527 28
34
45
2427
33 34
328,634347,285
385,397403,528
Active PermitsPermits ProducingAle/Beer Produced
Num
ber o
f Bre
wpu
bs
Gal
lons
Growth in Brewpubs and Gallons Produced
Increase in Label Applications FY 2008 – FY 2012
FY 08 FY 09 FY 10 FY 11 FY 120
5,000
10,000
15,000
20,000
25,000
1,360 1,139 1,368 1,7382,685
1,664 1,344 2,074 2,056 2,914
11,6059,900 9,245 9,993
14,88314,629
12,383 12,68713,787
20,482
Malt Beverages Distilled SpiritsWine All Classes
97% growth 28% growth 40% growth75% growth
Cash / Credit Law StatuteSec. 102.32. SALE OF LIQUOR: CREDIT RESTRICTIONS.
(c) On purchases made from the 1st through 15th day of a month, payment must be made on or before the 25th day of that month. On purchases made on the 16th through the last day of a month, payment must be made on or before the 10th day of the following month.
(d) Each delivery of liquor shall be accompanied by an invoice giving the date of purchase. If a retailer becomes delinquent in the payment of an account for liquor, the wholesale dealer immediately shall report that fact in writing, including by e-mail or fax to the commission or administrator. A wholesale dealer may not sell any liquor to a retailer who is delinquent until the delinquent account is paid in full and cleared from the records of the commission. An account becomes delinquent if it is not paid when it is required to be paid under Subsection (c).
Delinquent List Rule History• 2009 - Implemented a web-based reporting system.• 2009 - Eliminated any delay between the publication
date and the effective date of delinquent list.• 2009 - Announced plan to align the delinquent list
publication date with the credit law payment due date. Through Rulemaking, TABC intends to reduce the period before the publication date by two days every year for five years.
• 2010 - Through Rulemaking, moved the publication/effective date up two days (10 to 8 days).
• 2011 - Through Rulemaking, moved the publication/effective date up two days (8 to 6 days).
Delinquent List Current Rule
• Rule 45.121 Effective November 10, 2011• 45.121 (j)(2) The Delinquent List will be published
the 3rd day of the month for purchases made from the 1st to the 15th day of the preceding month, for which payment was not made on or before the 25th day of the preceding month. The Delinquent List will be published the 18th day of the month for purchases made between the 16th and the last day of the preceding month for which payment was not made on or before the 10th day of the month.
• 45.121(j)(3) The Delinquent List is effective at 12:01 A.M. on the date of publication.
Delinquent List Future• Rule 45.121• Planned rule changes
– 2012 - Move the publication date up two days (6 to 4 days).
– 2013 - Move the publication date up two days (4 to 2 days).
– 2014 - Move the publication date up two days to coincide with the credit law payment due date as laid out in statute 103.02 (10th and 25th day of the month).
FY 2010 FY 2011 FY 2012 (est.)0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,00036,252
27,91932,212
Reported Credit Law Defaults
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 (est.)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
$0
$100
$200
$300
$400
$500
$600
$700
28,628
31,612
11,160
5,325 5,589
$619
$600
$86$37 $78
Published Credit Law Defaults
# DefaultsAmount (millions)
Pu
bli
sh
ed
De
fau
lts
Va
lue
(M
illi
on
Do
lla
rs)
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 (est)
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,208,163
$1,380,621$1,498,297
$526,644
$1,098,390
Unpaid Credit Law De-faults
FY 2008
FY 2009
FY 2010
FY 2011
$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000
$612,200
$418,462
$855,717
$171,388
$348,084
$664,311
$470,703
$302,937
$247,879
$297,848
$171,877
$52,319
$1,208,163
$1,380,621
$1,498,297
$526,644
Unpaid Credit Law DefaultsBy Permittee Class
Total Unpaid Defaults
All Others
Mixed Bev-erage
Package Stores
Looking Ahead:83rd Legislative Session
November 6, 2012 – General Election
November 12, 2012 – Pre-filing of bills
January 8, 2013 – 83rd Legislature convenes
March 8, 2013 – Last day to file regular bills
May 27 – Sine Die
June 16 – Last day Governor can sign or veto bills
LAP Interim Charge
Review the alcoholic beverage licensing and permitting process. Explore possible reforms with interested stakeholders to streamline and improve the process.
Code Inconsistencies “Leveling the Playing Field”
AKA avoiding lawsuits the state may lose
– Wineries– Breweries– Brewpubs– Distilleries
• Sunday Sales• Limitations on Package Store
Ownership• Consanguinity Exception• Public vs Private Ownership
Package Store Issues
Legislative Appropriations RequestExceptional Items
FY 2014 – FY 2015
TABC General Revenue Base Request GR Exceptional Item Request 1. 1% Health Insurance Cost 2. Data Center Services Contract Increase 3. Operational Cost Increases 4. Public Safety Initiatives 5. Ports of Entry - Regulation 6. IT Enhancements 7. Education/Prevention Programs 8. Transfer to Texas Dept of AgricultureTotal, GR Exceptional Item Request
Total, TABC GR Request
Biennial Total $83,180,005
629,899113,330
2,266,9583,338,1861,292,1152,583,285
380,000500,000
$11,103,773
$94,283,778
TABC Organization Chart
Posting for Chief of Field Operations
August 6th to 24th
Posting for Asst Administrator
July 16th to August 3rd