MLCC Business Meeting: RNDC Update

The Michigan Liquor Control Commission (MLCC) held its regular business meeting this morning at 11 a.m., at its main office in Lansing.

After last meeting’s minutes were approved, two administrative order proposals were introduced.

  • 2019-01: Distilled Product Changes: Extends deadline from November 4, 2019 to December 6, 2019 to allow manufacturers to switch ADAs for the next price book.
  • 2019-02: Spirits Product Delisting: Products that don’t meet the state minimum sales will not be delisted from the price book on December 29, due to delivery issues with RNDC. The next item delisting will take place in March.

Both proposals were approved.

Next, a representative from MLCC spoke about the number of complaints they are still receiving from licensees. Since November 8, they have received 762 issues reported on their website and they have received 85 complaints on the MLCC helpline since November 12. Most issues were related to late/non-deliveries. A smaller number of complaints were about out-of-stock products.

The representative stated that issues seem to be getting worse, not better. She also stated that licensees said they don’t know what to order because they don’t know when deliveries will show up, RNDC robo-calls were unhelpful to them and dealing with customer service has been an unpleasant experience.

The representative then spoke about accounting-related issues the state has been experiencing with RNDC. According to her, RNDC has been sending late accounting information to the state and money is also not being withdrawn from licensee accounts for RNDC deliveries. Currently, the state is showing a loss of $58 million in gross sales from poor reporting from RNDC. Another $7 million in tax revenue has been lost. The two losses combined equate to $65 million in lost revenue for the state and the estimated loss by the end of the year could reach $100 million.

It was noted, however, that once accounting from RNDC is caught up, the total loss will be much lower than what it is on paper currently.

The MLCC also noted that it has removed RNDC delivery schedules from its website due to a lack of reliable information. It will not be added until RNDC’s delivery schedules are once again consistent.

RNDC Region President of Control States Joseph Gigliotti spoke at length in front of the commissioners during the meeting. He acknowledged RNDC’s shortcomings. He mentioned that the holiday season has exacerbated RNDC’s delivery issues. He stated that this Tuesday, RNDC pulled a record number of bottles (over 300,000) in one day. He noted that RNDC is adding additional routes, staggering drivers so there is less downtime, adding additional non-CDL trucks for deliveries, delivering on Saturdays, looking into delivering on Sundays and looking into setting up a separate website strictly to handle communication with licensees.

Melinda Leonard, from the Office of Attorney General, said the AG Office is still looking into potential violations for RNDC and they requested a comprehensive plan from RNDC regarding how they will fix issues going forward.

Two licensees also spoke and expressed their personal frustrations with RNDC.

The next MLCC meeting, where RDNC will be present, will be its semi-annual meeting in Lansing on December 4, at 10 a.m.