Minn. Shutdown Follow-up: State Demanding MillerCoors Pull Product Over Less Than $1,200
Last night (at NewsBusters; at BizzyBlog), I noted that the State of Minnesota, where the government is shut down but spokesman for the Department of Public Safety Doug Neville is somehow still working, is demanding that MillerCoors pull its products from Gopher State store shelves within days, and identified a number of questions non-inquisitive Minneapolis Star Tribune reporter Eric Roper should have asked and didn't.
One of the questions which didn't make my list, which wasn't intended to be comprehensive, is: "How much money is involved?" As seen in the headline, the answer is so trivial that it almost costs more to think about it than to say what it is. The potential embarrassment over this matter may partially explain why Democratic Farm Labor Governor Mark Dayton appears to have sued for peace this morning (covered later in this post). Readers will also have a hard time believing the penny-ante amount over which retailers whose "buyer's cards" have expired will from all appearances be prevented from buying alcoholic beverages for resale.
To its credit, the Associated Press did get answers yesterday, and reported them in a 3:58 p.m. dispatch by Steve Karnowski. To the AP's and Karnowski's discredit, the amounts involved, which should have appeared by the second paragraph, didn't start showing up until the ninth, and Karnowski made no attempt to describe why the shutdown has taken place, i.e., Dayton chose to shut down the government rather than sign a budget which does not include significant income tax increases.
As you read the following excerpt from Karnowski's writeup, keep in mind that SABMiller, the parent company of MillerCoors, had US sales of $28.3 billion, US earnings before interest, taxes and amortization of $5.0 billion, and per Page 6 of its annual report generated almost $2.5 billion of free cash flow during the year ended March 31 (bolds are mine):
Miller, Coors and other popular beers may disappear from Minnesota stores and bars within days because brewing giant MillerCoors lacks the proper licenses due to the state's government shutdown.
MillerCoors has 39 "brand label registrations" with the state that expired last month, and the employees who process renewals were laid off when state government shut down July 1 in a budget dispute, Doug Neville, a spokesman for the Department of Public Safety, said Wednesday.
State alcohol enforcement officials who remain on the job recently told officials with Chicago-based MillerCoors LLC that they need to come up with a plan soon for pulling their products he said.
"I think we're looking at days instead of weeks before some action needs to be taken but I don't have an exact date," Neville said.
... Minnesota requires that brewers, wineries and distillers take out brand label registrations for products they sell in the state. They cost only $30 and are good for three years. MillerCoors' registrations expired June 13.
Green said MillerCoors submitted its paperwork and the check on time, on the 13th. Neville said the state didn't receive them until June 15, two days after the registrations expired.
Whether it was the 13th or 15th might not have mattered because the check was for $1,380, a $210 overpayment, Green said. That delayed the process. The state received a second check for the right amount on June 27, he said.
But by that time, Neville said, employees in the department's alcohol enforcement division didn't have time to process the renewals before they were laid off. On top of that, he said, the computer database they use to process renewals was taken offline along with some other systems so the department's skeleton IT crew can concentrate on maintaining more critical systems relied upon by law enforcement agencies.
... (Retailers are) required to have $20 "buyer's cards" to purchase liquor from wholesalers, and they must be renewed annually by the same laid-off employees that process brand registrations. Hundreds of those cards have expired or will soon.
Words fail. The state thinks it's going to force MillerCoors to pull product over $1,170 ($1,380 minus $210), which it apparently has in hand and may have already taken to the bank? And it's going to stop retailers from selling alcoholic beverages for lack of 20 bucks?
The Minneapolis Start Tribune's Eric Roper reported on the controversy yesterday. Incredibly, he did not cite a single dollar amount in his report. I wonder why? Could it be that if readers knew the small dollar amounts at stake, they would realize that the state, possibly goaded by Mark Dayton and his apparatchiks, might be engaging in arbitrary action for the express purpose of inflicting pain which might somehow work to the governor's political advantage?
If that's Dayton's calculation, we can thankful that it appears not to be working, according to Fox 9 in the Twin Cities (HT BizzyBlog commenter dscott):
Governor, Republicans Discuss Ending Minnesota Shutdown
Minnesota Gov. Mark Dayton and Republican leaders went behind closed doors at 2 p.m. Thursday to discuss a budget proposal and some additional conditions that could end the state government shutdown.
The meeting comes after the governor sent a letter Thursday morning to House Speaker Kurt Zellers and Senate Majority Leader Amy Koch, saying he "reluctantly" agrees to accept the Republican budget proposal from June 30 if it will end the government shutdown.
“Despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans,” Dayton wrote in the letter. “Therefore, I am willing to agree to something I do not agree with – your proposal – in order to spare our citizens and our state from further damage.”
Dayton said accepting the offer, with conditions, would bridge a $1.4 billion gap between him and the Republican leadership without any more drastic cuts to to essential services.
"If this gets resolved and gets Minnesota back to work in the next few days, then it doesn't matter what people say about me,” Dayton said.
It would appear that the citizens of the Gopher State are the beneficiaries of Republican legislators who have stood their ground. One would hope that John Boehner, Mitch McConnell, Barack Obama, and Harry Reid are taking note.
Cross-posted at BizzyBlog.com.