The government-controlled liquor systems have faced significant challenges in recent years. In 2022, an inside job at the Virginia Alcoholic Beverage Control Authority (ABC) was uncovered, where a former employee leaked information to private collectors about rare bourbons. Similarly, officials at the Oregon Liquor and Cannabis Commission were caught diverting sought-after bourbons for personal use.
Now, Michigan is making headlines with the latest scandal involving the disappearance of nearly a million dollars worth of liquor from the Michigan Liquor Control Commission (MLCC). A recent audit revealed the state’s failure to track its spirits inventory effectively.
Michigan is one of 17 states that operate as a control state, with MLCC being the sole wholesaler of distilled spirits. However, the audit exposed the agency’s lack of control over its inventory and distribution practices.
The audit uncovered that $961,000 worth of liquor, totaling 62,294 bottles, went missing from ADA warehouses between January and February 2022. This missing inventory accounted for 20% of the state’s total stock.
The audit also highlighted MLCC’s inability to order appropriate quantities of liquor, resulting in excess stock and poor sales management. Additionally, the agency issued liquor licenses to establishments in dry areas, leading to the need for license revocation.
Overall, the audit rated MLCC’s performance as “not sufficient,” prompting the agency to acknowledge the findings and commit to addressing the issues raised.
The deeper question raised by the audit is why Michigan continues to operate as the wholesaler for distilled spirits in 2024. Despite outsourcing warehousing and logistics, the state still controls the distribution of liquor, generating significant revenue for the general fund.
While the missing liquor scandal is concerning, it seems that the financial benefits derived from the control system may outweigh the risks and challenges faced by MLCC.
