Texas Package Stores Association
65th Annual Convention
“Facing the Future Together”
Sherry Cook, TABC Administrator
Dallas, Texas - August 6, 2012
“Facing the Future Together”
• 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
Local Option Elections
FY 2008 – FY 2012
86
83
90
75
80
70
60
66
61
51
76%
Overall
Success
Rate
66
52
47
50
36
40
30
20
10
0
FY 2008
FY 2009
Elections
FY 2010
FY 2011
FY 2012
Jurisdictions Holding Elections
Wet / Dry Counties
1998 and 2012
June 2012
46 Wet Counties
22 Dry Counties
May 1998
29 Wet Counties
54 Dry Counties
Growth of Texas Businesses
Growth is expected to continue at an
average rate of two percent annually.
50,000
48,000
48,059
All Licensed
Businesses
46,201
47,310
46,000
44,283
45,422
44,000
42,047
42,690
43,619
42,000
41,471
42,090
Licensed
Retailers
40,000
As of July 15th of each year.
38,000
2008
2009
2010
2011
2012
Texas Package Stores
14.6% growth from July 2001-July 2012
2,700
2,642
2,600
2,500
2,393
2,400
2,296
2,300
2,429
2,376
2,457
2,489
2,417
2,364
2,209
2,249
2,200
2,100
2,171
2,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Wholesale Alcohol Sales in Texas
8% growth FY06-FY12
692,435,567
689,626,550
700,000,000
690,000,000
684,162,737
678,614,857
680,000,000
669,452,000
Gallons
670,000,000
660,000,000
650,000,000
647,611,244
642,963,576
640,000,000
630,000,000
620,000,000
610,000,000
FY 06
FY 07
FY 08
FY 09
FY 10
FY 2011 FY 2012*
est
692 million gallons of alcohol to be sold in Texas in FY 2012.
Distilled Spirits Sales in Texas
22% growth FY06-FY12
30,856,328
31,000,000
29,563,292
30,000,000
27,854,240
27,566,945
27,469,924
29,000,000
Gallons
28,000,000
27,000,000
25,303,413
26,000,000
25,000,000
24,200,743
24,000,000
23,000,000
22,000,000
FY 06
FY 07
FY 08
FY 09
FY 10
FY 11
FY 12*
est
Wholesale AB Sales in Texas
Growth FY08-09, FY09-10, FY10-11, FY11-12*
16%
14%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
15%
FY 08-09
13%
10%
FY 09-10
FY10-11
8%8%
8%
FY11-12*
*Estimate
6%
4%
4%
3%
1%
0%
Ale
Spirits
1% 1%
Wine
1%
2% 1%
-1%
-3%
-5%
Beer
TOTAL
Texas Wineries and Gallons
Produced (in millions)
280
3.5
3.05 3.28 2.93
Number of Texas Wineries
240
80
40
2.22 2.21
2.52
43
58
45
2.08
3
2.5
189 195
39 33
151
139
132
38
116
17
15
89
75
64
1.92
120
2.96
Gallons of Wine Produced
200
160
62
WineriesProducing
2
1.5
1
0.5
0
0
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12*
est
Number of active winery permits at the end of the fiscal year.
Millions of Gallons
Wineries Not Producing
Out of State Winery Direct Shippers
and Gallons Shipped
1200
979 1017
878
300,000
347,254
250,000
250,529
381
400
350,000
389,309
573
600
200,000
199,980
150,000
163,299
200
0
462,309 400,000
749
800
0
59,392
FY 05
FY 06
450,000
100,000
50,000
0
FY 07
FY 08
FY 09
FY 10
FY 11
FY 12* (est)
Number of active permits throughout the year.
First Direct Shipper permits were issued on 10/24/05.
Gallons Shipped
Number of Direct Shippers
1000
1069
500,000
Texas Distilleries and Gallons
Produced (in millions)
Number of Texas Distilleries
30
20
15
10
10
5
1.80 m
25
Total
Producing
Million Gallons
25
7
3
3
2.59 m
1.22 m
0.63 m 18
0.58 m
8
6
2.5
19
13
12
8
10
2
1.5
1
Million Gallons
33
35
0.5
3
0
0
2004
2005
2006
2007
2008
2009
2010
2011 2012*
Number of active permits throughout the year.
Data on number producing and amount produced not available prior to 2008.
Small Texas Breweries and
Gallons Produced (in millions)
1.944m
Number of Small Breweries
45
1.4 m
40
36
Active Permits
Permits Producing
Ale/Beer Produced
35
30
25
15
10
6
6
7
8
1.9
9
2.3
3.5
30
17
1.5
16
8
2.5
2
9
8
5
4
3
1.4
20
4.5
1
0.5
8
0
0
2004
2005
2006
2007
2008
2009
2010
2011 2012*
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.
Millions of Gallons
50
Growth in Brewpubs
and Gallons Produced
403,528
385,397 45
347,285
328,634
34
Number of Brewpubs
45
40
Active Permits
Permits Producing
Ale/Beer Produced
35
30
25
24
23
23
24
25
27
28
33
34
400,000
350,000
300,000
250,000
27
200,000
24
20
450,000
150,000
15
10
100,000
5
50,000
0
0
2004
2005
2006
2007
2008
2009
2010
2011
2012*
Number of active permits at the end of the year.
Data on number producing and amount produced not available prior to 2009.
Gallons
50
Increase in Label Applications
FY 2008 – FY 2012
25,000
20,482
20,000
15,000
10,000
14,629
13,787
12,383
12,687
9,900
9,245
9,993
1,344
2,074
2,056
1,368
FY 10
1,738
FY 11
14,883
11,605
5,000
1,664
0
1,360
FY 08
Malt Beverages
97% growth
1,139
FY 09
Distilled Spirits
Wine
75% growth
28% growth
2,914
2,685
FY 12
All Classes
40% growth
Cash / Credit Law Statute
Sec. 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).
Reported Credit Law
Defaults
40,000
36,252
32,212
35,000
27,919
30,000
25,000
20,000
15,000
10,000
5,000
0
FY 2010
FY 2011
FY 2012
(est.)
Published Credit Law
Defaults
$700
$619 31,612
Published Defaults
30,000
25,000
$600
28,628 $600
$500
20,000
$400
15,000
$300
11,160
10,000
$200
5,325 5,589
5,000
$100
$86
0
FY 2008
FY 2009
# Defaults
FY 2010
$37
FY
2011
$78
FY 2012
(est.)
Amount (millions)
$0
Value (Million Dollars)
35,000
Unpaid Credit Law
Defaults
$1,498,297
$1,380,621
$1,600,000
$1,400,000
$1,208,163
$1,098,390
$1,200,000
$1,000,000
$800,000
$526,644
$600,000
$400,000
$200,000
$0
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
(est)
Unpaid Credit Law Defaults
By Permittee Class
Mixed
Beverage
Package
Stores
$526,644
$52,319
FY 2011
$302,937
$171,388
$171,877
FY 2010
$470,703
$1,498,297
$855,717
$297,848
FY 2009
$664,311
$418,462
$247,879
$348,084
$612,200
FY 2008
$0
$200,000
$400,000
$600,000
$800,000
Total Unpaid
Defaults
All Others
$1,380,621
$1,208,163
$1,000,000 $1,200,000 $1,400,000 $1,600,000
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
Looking Ahead:
83rd Legislative Session
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
Package Store Issues
• Sunday Sales
• Limitations on Package Store
Ownership
• Consanguinity Exception
• Public vs Private Ownership
Legislative Appropriations Request
Exceptional Items
FY 2014 – FY 2015
TABC General Revenue Base Request
Biennial Total
$83,180,005
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 Agriculture
Total, GR Exceptional Item Request
629,899
113,330
2,266,958
3,338,186
1,292,115
2,583,285
380,000
500,000
$11,103,773
Total, TABC GR Request
$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
Questions?