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Michigan’s Largest Liquor Distributor Faces $26,000 Fine Over Delivery Problems

The distribution issues at Republic National Distributing Co. have caused a shortage of booze at hundreds of bars, restaurants, and stores across the state

Colorful margaritas with cubed ice, salt rims, and lime shown from the top. Michelle Gerard
Brenna Houck is a Cities Manager for the Eater network. She previously edited Eater Detroit and reported for Eater. You can follow her on the internet at @brennahouck.

On the eve of the biggest bar night of the year, restaurants, bars, and liquor stores across the state are still facing shortages and delayed booze deliveries.

The Michigan attorney general’s office has now issued an 88-count complaint over the wine and spirits delivery issues, recommending fines and sanctions against the state’s largest liquor distributor Republic National Distributing Company, Crain’s reports.

Each count individually carries a $300 fine, meaning the company could be required to pay a $26,000 penalty. The attorney general’s office is also asking that the Michigan Liquor Control Commission require the RNDC to hire an auditor and take away 50 cents per case delivered from RNDC’s sales commission until the distribution issues are resolved. (The company normally receives $9.25 per case.)

On Friday, the Michigan Liquor Control Commission held a hearing to discuss RNDC’s severe backlog of deliveries and poor customer service that’s resulted in dwindling supplies on store and bar shelves as well as more than 700 written complaints against the booze distributor. Only three companies in the state are licensed to distribute spirits; RNDC is the largest with roughly 13,000 customers.

“We are reviewing the complaint filed by the Michigan Liquor Control Commission,” Joe Gigliotti, region president of control states for RNDC says in a statement provided to Eater. “We are continuing to drive our team to restore delivery service to the high levels that we have historically provided Michigan. No additional fines or requirements from the commission are needed for us to acknowledge the importance of service improvements or to incent us to work harder.”

The trouble started over the summer when RNDC consolidated two facilities in the state to a single large facility in Livonia. The company attributed the delays to issues with a new computer system at the site that tracks orders. On November 8, the MLCC issued a statement that it would step in to hold “RNDC accountable” for coming up with a plan. “It’s our priority to ensure our licensees have their shelves stocked for the public, especially in advance of the holiday season,” MLCC Chair Pat Gagliardi said at the time.

Bars and many restaurants depend on liquor sales to make ends meet and liquor stores need to keep popular brands in stock in order to fulfill the needs of their customers. The state reports that it is missing records for $58 million in gross sales and $7 million in liquor tax revenue.

RNDC says its brought in temporary workers and hired a call center to improve communication with customers. RNDC is expected to continue fulfilling orders through the week with the exception of Thanksgiving Day.

Update, 2:46 p.m., November 26: This story has been updated with a statement provided by RNDC.

Republic National Faces $26,000 in Fines, Lost Revenue Over Liquor Delivery Woes [Crain’s]
Commission Grills State’s Largest Liquor Wholesaler Over Distribution Woes [Crain’s]
Nessel Tags Liquor Distributor With 88-Count Complaint Over Shortages [Detroit News]
Liquor Shortage in Michigan Causes Headache for Local Bars and Restaurants [ED]
All Bar Coverage [ED]