State’s liquor buyback program could put $20M back in owners’ hands (update)

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UPDATE (1:15 p.m. April 17, 2020): The Michigan Liquor Control Commission extended the liquor buyback program to 5 p.m. April 24.

The Michigan Liquor Control Commission is offering to buy back spirits from bars, restaurants and other licensed sellers impacted by the COVID-19 crisis.

Gov. Gretchen Whitmer on Monday signed Executive Order 2020-46, which authorizes the Michigan Liquor Control Commission to buy back any sealed spirits inventory purchased by licensees before March 16.

The MLCC will accept requests from Class C, B-Hotel, G-1, Club and other on-premises licensees effective immediately and through 5 p.m. Friday.

“In general, this applies to any licensee who legally purchases liquor through the liquor control commission,” MRLA VP of Government Affairs John McNamara said.

The buyback program essentially acts as a short-term loan, McNamara said. Businesses opting into the program will have 90 days after the end of a declared state of emergency in which to repay the advance or surrender the equivalent spirits.

McNamara estimated the buyback program will put roughly $20 million back in the hands of restaurant and bar owners across the state of Michigan, but he added the MRLA is keenly aware many businesses will not survive the storm.

“To be perfectly blunt, there may be some bars, restaurants and smaller hotels that won’t make it out of this,” McNamara said. “If it goes over 30 days, approximately 10% of restaurants just won’t reopen. We have data right now that suggests 1% of restaurants just decided to close.”

Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association, praised the MLCC for offering the program during an uncertain time for the hospitality industry.

“We thank MLCC Chairman Pat Gagliardi for his creative leadership during an immensely challenging time in the hospitality industry. He has offered an elegant solution, essentially providing a contact-free buyback opportunity for shuttered restaurants and bars that currently have no other way of generating revenue from their alcoholic spirits,” Winslow said.

“As the collective shelter of American society persists, our neighborhood restaurants and bars need every bit of support they can get to make it out the other side.”

Amidst the governor’s “Stay Home, Stay Safe” order, many craft distillers can sell bottled spirits to go, but McNamara said even the smaller outfits can take advantage of the program if they choose.

Licensees interested in this program are encouraged to apply at michigan.gov/lara.

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