Three Mississippi businesses are suing the company that operates the state’s Alcoholic Beverage Control warehouse.
Delays and software issues at the warehouse earlier this year left many bars, restaurants and package store owners with empty shelves and lost revenue. The warehouse in Gluckstadt is still working through a backlog of orders.
Aloha Wine and Spirits, Rosetti’s Liquor Barrel and Buckshots, all Gulf Coast businesses, filed separate lawsuits against Ruan Transport Corporation. The Iowa-based company has been the contracted operator of the state-owned ABC Warehouse since March 2023.
The lawsuits allege that Ruan has breached its contract with the Department of Revenue through mismanagement of a software transition, not delivering to stores within the timeline the company had laid out in its initial proposal and by billing stores for orders that were not delivered or only partially delivered. This breach of contract, the suit claims, has resulted in loss of revenue for the businesses.
In Mississippi, the warehouse serves as the only distributor in the state for almost all alcohol, with the exception of beer and some light wines. The warehouse is owned by the state and ABC is under the Department of Revenue.
The warehouse was previously operated by the state but in 2022 the Legislature passed a law authorizing the department to hire a third party to operate it.
The department has said that overall operations have been running more efficiently with Ruan. In addition, a new $55-million warehouse is under construction that will have double the capacity of the current one.
In January, the warehouse shut down to do inventory and implement new management software. The new software is not compatible with the warehouse’s conveyor belt system so the conveyor was torn out and a new system of lifting individual pallets to load trucks was implemented.
Issues with software implementation and adjusting to the new system resulted in a backlog of over 200,000 cases in February, ABC officials said.
Business owners, restaurateurs and angry customers have inundated the Legislature with complaints. Many had similar complaints as those brought up in the lawsuit, including deliveries for which they were charged but did not receive.
The department has said that it expects to work through the full backlog by May.
In a February hearing, legislators promised swift action. SB 2838 is in negotiation between the Senate and House and would allow ABC permit holders to purchase alcohol from any licensed distributor nationwide. This amendment, called “The Emergency Alcohol Distribution Act,” was brought by Rep. Hank Zuber, a Republican from Ocean Springs.
While businesses report that deliveries are more regular, there is still a backlog. However, the Department of Revenue has said that all the issues have been resolved and that the warehouse is working hard to improve the process.
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