Nessel tags liquor distributor with 88-count complaint over shortages

Beth LeBlanc
The Detroit News

Lansing — Attorney General Dana Nessel has issued an 88-count complaint against a liquor distributing company whose logistical issues have contributed to shortages at Michigan liquor stores and bars. 

The complaint against NWS Michigan LLC — which does business under the name Republic National Distributing Company — follows a roughly three-hour Michigan Liquor Control Commission meeting Friday in which a company representative explained some of the ways the company is trying to address delivery issues stemming to a facility move this summer. 

Nessel doubled down on the complaint on Twitter Monday, noting the timing of the shortage. 

"The holidays are coming and with that means lots of time spent with family," she said. "This cannot stand."

Republican National Distributing Company said it was reviewing the complaint in a statement Tuesday. 

"We are continuing to drive our team to restore delivery service to the high levels that we have historically provided Michigan," said Joe Gigliotti, region president of control states for Republic National. "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 liquor shelves are adequately stocked at Detroit’s Meijer store Friday, but state liquor stores are experiencing dwindling supplies due to a problem with a distributor.

Eighty-five of the 88 counts in the Monday complaint allege a failure to deliver orders “that satisfied the minimum requirements” to various Michigan businesses dating back to June.

The complaint also alleges counts of failing to maintain an adequate physical plant, proper equipment or customer service and a failure to provide records requested by the commission. 

The alleged violations, which will be argued in front of a hearing officer, each carry a $300 fine. If each count of the complaint is considered valid, the fine could be as high as $26,400.

The complaint asks the hearing officer to place Republic National Distributing Company on probationary status, which requires the distributor to pay for an independent audit of the company’s operations and to comply with all documentation requests from the commission. 

The complaint also asks the hearing officer to dock Republic National Distributing Company’s cut for each case of liquor by 50 cents per case until the audit is complete and all corrective action is taken, according to the complaint. 

"The commission may, by separate order, require the (authorized distributing agent) to take corrective action based on the audit's results by a date set in the separate order," the complaint said. 

Republic National Distributing Company is one of three authorized distribution agents responsible for warehousing and delivering all liquor sold in Michigan. 

Republic National, which distributed about two-thirds of Michigan liquor in 2018, has said most of its recent delays date back to this summer, when the company consolidated its two operations centers into a larger facility in Livonia. 

The move, which introduced new information technology and machinery systems, appeared to overload the system.  

The state has received hundreds of complaints regarding missed, delayed or incorrect deliveries, poor customer service, and closed doors when retailers frustrated by the wait drove to the warehouse to pick up their product. 

The number of unreconciled invoices is so great that the state has roughly $58 million in gross sales and $7 million liquor tax revenue unaccounted for.

The company has described the discrepancy as merely a delay in reconciling those records, but the state is worried that if left unaddressed the total potential loss could grow to $100 million by the end of the year.

Republic National has attempted to address the issues by moving some its operations back to a former facility in Brownstown Township to alleviate the overloaded system in Livonia. In addition, the company has hired more than 120 temporary workers to assist its 584 full-time employees, created a call center to field complaints, and plans to send some sales employees out on deliveries.