July 18, 2011 TABC Credit Law Delinquent List is Out

The current TABC credit law delinquent list is now available and has an effective date of July 18, 2011 at 12:01 am. No sales or deliveries may be made on or after the effective date below.

Being on this list does not always indicate the restaurant is going out of business. Sometimes many restaurants make an accounting oversight or the payment gets delayed in the mail. Either way, if you miss the strict deadline you go on the list.

The list is here.

Jump for the legalities.

The Delinquent List is published/effective at 12:01 a.m. on the 3rd and
18th of each month. All payments must have been received by the
wholesaler prior to 12:01 a.m. on the 3rd and/or 18th as applicable to
avoid regulatory action. Any orders received for delivery, will call,
salesperson pick-up or hot shot prior to the publication date may be
delivered by the Wholesaler and/or Local Distributor on the day of the
publication. Such orders must be invoiced and billed prior to the
publication time of 12:01 a.m. and must be delivered by 1:00 p.m. on the
publication date.

If the publication date falls on a Saturday, Sunday, or a state or
federal holiday, the publication date shall be the next regular business
day.

Two forms of the delinquent list are available.  The first is an HTML
browser compatible list.  It can be viewed and printed from your normal
Internet browser.  The second list is in a comma delimited ASCII text
format that you may wish to use to import the data into your favorite
database, spreadsheet, statistics or word processing package.

NOTICE REGARDING BANKRUPTCY

Violations under Code section 102.32 (d) and 16 TAC 45.121 (f) and (g)
regarding sales to and purchases by a retailer who appears on the
delinquent list will not be enforced so long as the retailer is
protected under the United States Bankruptcy Code.  This policy does not
require a seller to sell to any particular retailer, but allows that a
seller may sell to retailers on the delinquent list who are protected.
The terms of sale must otherwise comply with the Code and all applicable
rules of the Commission.  All reporting requirements of Code section 102
and 16 TAC 45.121 are still in effect.  Retailers must inform the TABC
Compliance Division immediately upon filing for bankruptcy and
immediately upon release from bankruptcy protection. All communications
with the Compliance Division should clearly indicate the entity’s permit
or license number(s). Please contact the TABC Compliance Division at
512-206-3300

24 comments on “July 18, 2011 TABC Credit Law Delinquent List is Out

  1. Nancy, I think this presents a wonderful opportunity to discuss the role of the TABC in conjunction with this report. We, as taxpayers, allocate tax funds to the TABC to be spent accumulating and enforcing a late paying entity.

    But is the information worth the cost? What purpose does this governmental action really result in? How many of these entities end up with, in fact, suspended licenses. Or is it just a hammer, never used but hung over a licensee? Typically, once paid in full, a company is taken off the list – just as in private industry when a company has been cut off (with no government action required) their purchasing power is restored.

    If the public feels there is a clear need for a requirement of timely payment of alcohol invoices, then there are alternatives to government playing babysitter and wasting tax dollars. Make all purchases COD. There. No oversight necessary, saving taxpayers how much?

    The downside of this is small companies would require more capital to fund their new businesses. On the positive side, it is another step to ensure a small business success by having sufficient operating capital. This would help, but yes, make it slightly more difficult. Also positive, the taxpayer can be assured that they are not going to fund the oversight of badly run businesses.

  2. ^The TABC should only be responsible for the suspension of alcohol deliveries if state beverage taxes are delinquent. Not functioning as a quasi collection agency for Glazer’s, Republic, etc.

  3. Blue Collar Bar is on there and is closed. As is Hector’s. What happens if the business closes?

  4. Nancy, this is irresponsible use of information.

    TABC makes mistakes as much as you would expect any government agency would. By publishing this list you’re presenting lazy information to your readers that suggests businesses are in fiscal trouble when it may not be true.

    Sometimes the TABC will err and publish permits that don’t belong on the list. Sometimes distributors will err and not report a payment. There’s a large amount of room for human error with this TABC report.

    Your readers might steer clear of a retail shop or restaurant because of how they interpret this blog post.

    Instead of taking the lazy approach, why not follow the links to this page: http://www.tabc.state.tx.us/PublicInquiry/CreditLaw.aspx and plug in actual permits from the List. You’ll find that some permits listed actually don’t have any present defaults (ie: Centennial/Majestic/BigDaddy/etc)

    It’s hard enough out there for retailers/restaurants without bloggers mucking things up for them.

  5. I agree with JI. This is a tough economy and it’s summer — which means business is slow. This is a real kick in the pants to people in the industry who sweat blood and tears just to keep the door open. I don’t think it’s good karma or very encouraging to post this list; it could be very damning, instead. Let those who are interested in this information go to the trouble to seek it, instead of providing it so bored people at work can scroll down and make up stories about who’s about to go under.

  6. Well this is public information, so technically anyone can view it. Nancy is just linking to it. She didn’t give us an exclusive on the list or even call anyone out who’s on it. Plus, she explains that it might be due to administrative mix-ups and not that you’re going out of business.

    I blame it on a slow food news week.

  7. Well, I guess I should take down the link to restaurant health scores as well. BTW, after I posted this list a couple of weeks ago, several companies owned money got paid. Karma goes both ways. And thanks, dbc, I did point out that there are myriad reasons why companies show up.

  8. I really try to like this blog as it usually contains such useful information and provides a nice forum to discuss the goings on of our restaurant market. Stuff like this though…sometimes it just has the effect of making food writers seem so desperate to be insiders that they banter about touting silly, useless, information just for the sake of looking in the know to other “civilians”. Someone with distributor experience understands the implications of this list (and how those stakes have changed as of late, c. 2010). Otherwise, it’s sensationalizing on the part of what has become a part-time food tabloid and no longer in a cool way.

    This reminds me of the first time a child proudly showed me my own house on GoogleEarth.

  9. Since the information required by the government, it is has to be made available to the public. But don’t assume I’m arguing against your points Susan and JI, I am not.

    Again, it raises the question, is this (specific) public information a necessary function of our government? I would argue it is not. And by all means, let’s parse the quality of the information on the report when examining, as well as what this information is used for.

    One use of this data is to stop the purchasing ability of bars/restaurants/clubs when their account has become delinquent (by the state’s standard of past due accounts). Let’s suppose a company on the list has gone out of business, what purpose does the TABC serve to cut them off from purchasing if they’re already done purchasing? Many go out of business still owing money on their liquor inventory by just never paying their bill, late or not. It is not a foolproof system, rather proof of a system of fools.

    Monitoring accounts receivable is something private industry manages to do EVERY DAY, without incurring any cost in government oversight. Very efficiently handled in the private markets, I might add, you don’t pay your bills, you don’t get credit, duh.

    But recognizing we are talking about Evil Liquor and not the receivables of a widget company, let’s assume that this is necessary information to track (I don’t agree, but am willing to concede others point of view). What good is a report, and the cost to accumulate and record the data, if it is full of erroneous information as pointed out previously? This taxpayer, for one, is sick to death of paying for stupid government reports that aren’t even correct, how about you?

    Finally I would use my strongest argument. That none of this – the TABC department that handles this, the monitoring of who is current or not, the report full of errors – does even one miniscule thing to make the citizens of Texas safer from the dangers of overintoxication.

    So again, I posit the question: tax dollars well spent, or not?

  10. “sometimes it just has the effect of making food writers seem so desperate to be insiders that they banter about touting silly, useless, information just for the sake of looking in the know to other “civilians”.

    Silly, useless information? Give me a break. And JI, I’m not patting myself on the back, I’m reporting what happened. Do you people not want to know how restaurants and government agencies operate? Seriously. I have no dog in this fight. I did not editorialize the release of this information. I put it out there. Maybe not everyone is as well informed as you think they are.

  11. Give you a break? Ok, please elaborate to your readers how this information is of value to the dining public.

    Financially viable restaurants and retail establishments go on “The List” all the time. For a long time, many regularly did so intentionally. For Chrissake, Centennial is on this list. So, do you really expect to say with any validity that this post serves any purpose whatsoever? It simply is NOT what most people come to SideDish to read, IMHO. Again, silly…and of little use. I love your blog but this post was useless, other than for stirring debate.

    And for the record: historically, some of our most cherished fine wine shops in this city would sit on $500,000 of debt for 6 mo. at a time, much to the dismay of local distributors mind you. Maybe not such a big deal for the RNDCs and the Glazers’ of the world. But for the smaller, boutique distributor who is bringing smaller, boutique products to market, it puts a huge pinch on cash flow. It’s a problem, it’s unethical and the TABC was forced to fix it, and then fix it further two years ago by upping the consequences of repeat violations.

  12. I would point out that even with the code’s requirement of a bimonthly payment in place, small boutique distributors are still losing the marketplace to the RNDCs and Glazer’s of the world. Bills are still going unpaid to these small sellers.

    Which of the companies on this list is going to have action taken against them by the TABC? Probably none.

    The law doesn’t work. So why force sellers to report their outstanding invoices (and spend taxpayer dollars overseeing it).

  13. Amy,

    Could not agree with you more. Can anyone give a good reason for this list or the rules regarding payments to alcohol distributors exist? How is the taxpayer benefitted? Is there a similar regulatory body making sure that food distributors get paid? I am sure that Tom Spicer would love to have a Texas run collection agency blocking anyone who didn’t pay his bills in 15 days from buying any vegetables. Might keep him from having to picket outside of restaurants.

    This is a clear case of a strong group of lobbyist creating an inane task for their own benefit and having the taxpayer pick up the tab.

  14. Amy: RNDC and Glazer’s have essentially forfeited much of the European wine market in an effort to consolidate to larger brands. If you want fine French or Italian, you largely cannot seek it from them so smaller distributors have a nice little niche carved out in that regard and with ever increasing consumer interest in wines that come from outside California, they are not doing so terribly. What hurts them is poor logistics but that is another convo.

    How does TABC benefit the tax payer? Well, it maintains a friendly environment in which to do business in what has always been(since 1933) a regulated industry. The tax base benefits significantly from the sale of alcohol in Texas and this state is one of the 4-5 largest booze markets in the US. There is significant alcohol money flowing into state coffers and since we have no state income tax here, I am sure it is considered at least somewhat important to policy makers. Add to that the fact that alcohol is a relatively non-perishable product and what’s to stop me as a bar owner from stocking up on credit and then just riding the debt through the slow summer? It hurts cash inflow for the distributors and makes it more difficult for them to maintain their inventory, pay their suppliers, etc. The result, not a great environment to be in the booze business. So, you no pay, you no buy.

    Ultimately, based on federal law, Texas has to have some sort of alcoholic beverage authority in place. They already track how much every license spends in the state for taxation purposes. Delinquent accounts are simply reported by the distributors on the appropriate date and posted to the list. I can’t see how this really adds that much of a drain on already existing resources. The distributor is the one really enforcing it in the end, just in coordination with the entire alcohol distribution network and the support of the state.

  15. I like this discussion. Because it points out that the law, as it was historically set up, has ultimately failed over time.

    The TABC laws were designed to keep the three tiers (manufacturers, distributors, retailers) separate. Because it the old days, way back in the late 1800′s (which is when prohibition in Texas really began), the manufacturers would sell directly to retailers on credit, ultimately taking control of the retail business, or dictating which alcohol the retailer could sell (exclusivity). The rules were written so a middleman would prevent the manufacturer from getting too large.

    There was also the problem of the retailer producing their own hooch, with little regulation or oversight, some retailers made product containing a stronger liquor than was safe for the public. It kept customers coming back to their special brew, and kept the large manufacturers off of their saloon shelves.

    “They did not begin until about the mddle eighties to mix with the whisky tobacco leaves and stems, carbolic acid and concentrated lye by way of giving it more kick.” (Old-time Drummer Tells How Trade of West Was Won for Dallas, DMN, W. S. Adair, 4/20/1930). Other, more deadly drugs, were sold alongside of alcohol making it a much riskier and more addictive behavior than we realize today.

    The payment portion of the code was originally intended to contribute to this goal – it was not originally intended to protect the middleman from non-payment. Rather, it was to protect the retailer from having manufacturers or distributors muscle in on the business once it was operating.

    But here we are 75 years later with a law that was not really written for todays industry, but for one from a century ago. And I would argue, that just as in Dallas the “dry” laws allowed landlords to keep churning and burning the liquor ghettos of Dallas, these laws have allowed the large companies to squeeze out the small.

    I would disagree that the purpose of the TABC is to maintain a friendly environment, or that such strict regulations are necessary to have such within the industry. And it is a drain, on government, the distributors, and the retailers, and in a time when resources are at their slimmest.

    And while we spend these resources on such silly things, far more deadly drugs and guns are being smuggled over our border. But unregulated, of course.

  16. And hospitality instructor, I think we are really on the same page. One of the problems with revising the Alcoholic Beverage Code is whenever it’s mentioned, everyone steps up to make the deal sweeter for themselves. Resulting a law that panders to the most powerful.

    As I said in my first post – all these problems with oversight of accounts payable can be solved with three little letters.

    C.O.D.

  17. I was thinking about this post after I read the comments last night and I realized how much I have learned from reader responses. Take away the personal remarks and it is a valid, interesting discussion on the restaurant business and the challenges faced by restaurateurs. Thanks for speaking out.

  18. @AmyS – can you link to the W.S. Adair article anywhere online? Sounds interesting…

  19. My experience with wine distributors and the delinquent list is that the distributors use it as a sword, rather a tool. Wine distributors are strictly sales oriented. Strictly. They will deliver items that have not been ordered, not take a return on the items, and then when payment is refused, they put you on the list so you can’t purchase from anyone else. Happens all the time to off-premise retailers, probably less often to on-premise restaurants.

    Texas wholesalers have lobbied and cajoled the states laws to benefit themselves and no one else. The three tier system and the recent fight to allow residents of Texas to purchase directly from California wineries is a fine example. The reason you couldn’t order a case of Turley directly to your house or restaurant is it cut the wholesalers out of the deal…so they made it ILLEGAL. They didn’t make a deal with the winery to not do that, they didn’t bother to step up their game and do such a great job of sales that it wasn’t necessary to go directly to the winery, they just made it against the law and then sat back to reap the profits. Alcohol distributors manipulate our states laws regarding alcohol, by means of paying off lawmakers…also known as lobbying…to write laws that benefit them. The list is a perfect example of that.

    What other industry’s have a wholesalers deliquency list. Garments? Auto parts? Appliances? Furniture? If they don’t get paid, they have to seek relief in the courts. They just don’t do business with those stores anymore. But not Texas liquor distributors, they have the state use our tax dollars to collect the money for them.

  20. All very interesting!
    So what do we learn from the states list, nothing really, and even then it is really not anyones business, SERIOUSLY!
    Do you want to know whether Nieman Marcus is late paying for Jeans and T-Shirts it purchased?
    No, then why do you want to know whether a retailer or restaurateur is late paying a liquor wholesaler. Makes no difference in most cases to your choice of drinking or eating establishment or retail store, so unless you are a shareholder or another alcohol wholesaler, what good does this information do….NONE. I fthis was your business having it’s dirty laundry and cash flow issues wash in public, you would be furious!

  21. Johnny,
    The reason you are not allowed to order directly to your house, is sales tax, and alcohol tax, was nothing to do with wholesalers, if the internet retailer had been responsible and collected state appropriate sales tax from day one, and sent it to the states to whom it was due, this sort of thing would be a none issue!
    Only now has it become an issue for the wholesaler due to the large multi national alcohol conglomerates who are perfectly capable and eager to institute direct to consumer sales mechanisms, and cut out both wholsale and retail tiers, and make all the money themselves.
    Amy,
    C.O.D. is a bad idea, because it further puts Alcohol beverage sellers at a disadvantage to all other consumer goods retailers, although they are among a few that are rquired to carry very expensive licenses, large surety bonds, and much higher insurance premiums!

    So the 13th amendment was another fine example of a great idea poorly executed, and abused down the years due to greed, all hidden behind a thin veil of “in the publics interest” ah democracy….you don’t vote for it (in a lot of cases statistically speaking) and you cannot vote without it!