President’s Message

MBDA – YOUR INDUSTRY’S VOICE

President’s Message
by Frank Pistella

While thinking through my message to you, my colleagues in the MBDA, the phone rang with this depressing message: Wal-Mart in Washington County is about to convert a McDonalds, located in the same building next to its entrance, to some form of Beer Store based on an R license.

After 20 plus years in the business of being a licensee – first as a restaurant and now as a distributor – my primary competitor has traditionally been a businessperson just like me – a small, independent, local resident who is working to support a family and provide opportunities to employees. Now it’s a giant food merchant.

Talking to our members, it is clear that the legislative win by MBDA of being able to sell all packages comes with as a mixed blessing. A few have reported selling more beer; many are flat but are enjoying larger margins. Others are facing difficult times, particularly if they are squaring off against several grocery stores adopting nonprofitable margins in an attempt to compete against each other. We make our living selling beer – the simply do not! Unfortunately, there is little that we as an association can do to stop these giants from selling malt beverages due to the fact that the food merchants were given this right by the Supreme Court in 2010.

I know you are wondering how in the world can you compete toe to toe with individuals whose livelihood is not solely reliant on the sale of alcohol? Well, the message and answer is simple.

We must do everything possible to allow ourselves to be better than them in the marketplace. I know it’s hard to show confidence and invest at this time, but our product mix, selection, presentation, and attitude toward our customers must be a subject of critical self-examination and improvement. Each of us, looking at our own store, as seen by the public, our consumers, and potential new customers, judging it critically, and deciding upon improvements, will be hard. It will be a lot tougher than the daily task of selling beer. Nevertheless, we must do it!

We know this – in any local beer market that does not have a distributor, beer prices will go up and selection will come down. The economics of being a food merchant trains them to cull their inventory down to the fastest-moving and most profitable items.

MBDA is also promoting a list of legislative changes that will greatly help consumers by enabling us to better compete on a level playing field. These changes are critically important too.

Finally, and most importantly, we must continue to stay together during this time and work as one to better advance our interests and our industry.

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