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Sunday, November 17, 2013

Liquor retailers, restaurants complain of problems getting alcohol delivered after the switch from Law Warehouse

Liquor retailers across New Hampshire were warned to stock up before switching to a new statewide warehouse and distribution system this month, but that hasn’t stopped stores from running low on some bottles of wine and spirits just as the demand for alcohol hits its holiday peak.

Complaints have poured in from restaurants, merchants and truckers who have been jostled by the new shipping arrangements and struggling to get their products in a timely manner. Some orders have been sluggishly slow, others have been mixed up or intended for another customer and some products have quickly become unavailable. ...

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Liquor retailers across New Hampshire were warned to stock up before switching to a new statewide warehouse and distribution system this month, but that hasn’t stopped stores from running low on some bottles of wine and spirits just as the demand for alcohol hits its holiday peak.

Complaints have poured in from restaurants, merchants and truckers who have been jostled by the new shipping arrangements and struggling to get their products in a timely manner. Some orders have been sluggishly slow, others have been mixed up or intended for another customer and some products have quickly become unavailable.

Even the state’s own liquor outlets are starting to run low. Some wine racks at the Coliseum Avenue Liquor and Wine Outlet in Nashua, also known as Store 69, were empty Friday and some brands were completely out, such as Catena Chardonnay, Wild Horse Pinot Noir and Verde Sole Zinfandel.

“We have a delivery situation,” a clerk at the Coliseum Avenue outlet said. “We changed delivery. … It’s messing us all up.”

The transition from Law Warehouse in Nashua to a new operation run by shipping giant Exel out of a massive warehouse in Bow has led to a flurry of complaints and a promise by the state Liquor Commission to fix the problems.

After decades of operation, Law lost a 20-year, $200 million contract to Exel, and the switch to the new warehouse operation started Nov. 1.

Business owners and merchants delivering, selling or serving wine and spirits shared their complaints with The Telegraph. Most of them asked not to be identified for fear of losing business or harming their relationship with the state, which has a monopoly over the sale of liquor.

Complaints include:

Needing appointments: Truckers said they were told they had to have an appointment to pick up products at Exel; they never needed to make that arrangement at Law.

Longer wait times: Several said it has been commonplace for their trucks to sit for several hours waiting to pick up products when it would typically take no more than 30 minutes in the past.

No loading: Law Warehouse staff would load the trucks with cases of alcohol. Several truckers said they were told their equipment wasn’t safe enough for Exel to do that, forcing them to load their own trucks.

No or poor labeling: Some complaints said that cases of alcohol weren’t marked with the proper label identifying where it was to go.

Incorrectly mixed pallets: In some instances, trucks took a pallet of liquor or wine to a business, only to learn that some or all of it had been loaded improperly or was intended for a different merchant.

No half-cases: Smaller licensees don’t want a full case of a high-end product, but instead may seek a few bottles; however, that option wasn’t available.

Shipping gets sloppy

The Liquor Commission sent a memo to all liquor licensees on Nov. 7 conceding that the first week rolling out with Exel was a bumpy ride.

“The new warehouse is a bit behind in deliveries to your locations,” wrote Richard Gerrish, director of marketing, merchandising and warehousing for the liquor agency.

“I want to personally thank you for your flexibility in receiving initial shipments from Exel. Loads were late and some arrived on different dates and times. You and your staff handled all these changes in the most professional way possible.”

Gerrish said it was difficult for Exel to process the transferring of 10,000 cases a day from the Law warehouse along with the newly ordered products.

“They got overwhelmed,” Gerrish wrote. “In order to address this, starting next week you will be receiving loads separately from Concord (state warehouse) and Exel and following the protocol we previously used, and going back to the old schedule of deliveries.

“In order to get caught up this week some stores will be receiving Saturday loads.”

Most customers at the state’s liquor stores have yet to feel any consequence of the transition from one supplier to another. None of the people interviewed by The Telegraph outside of state liquor stores in Nashua and Hudson said they had trouble finding the brands they came for.

But that doesn’t mean the people selling and shipping the alcohol aren’t feeling the pinch.

“It’s a little more difficult getting bottles,” said Mary Labrie, manager of Killarney’s Irish Pub in Nashua. “We wait a little bit longer.”

Labrie said it’s harder to replace alcohol that runs out and “harder to get certain items.” She had to run down to the Coliseum Avenue liquor store to get some items to make sure the bar was stocked for the weekend.

“Hopefully, change will be better,” Labrie said.

Manchester trucker Chuck Nacos, owner of AAA Security, said the shipping problems couldn’t have come at a worse time for owners of many restaurants, supermarkets and convenience stores that sell wine, since the chaos is occurring at the height of the busiest alcohol-buying time of the year.

“I had one restaurant owner in Nashua in tears because we opened his 18 cases of high-end wine and found only eight of them were his,” Nacos said.

“What many people don’t understand is everyone has to pay for their liquor from the state in advance, so you’re out all of this money and you don’t even have your product to sell.”

Lynn Anderson, an Exel spokeswoman, said the company is working to make sure the new system works flawlessly.

“Exel is proud to be working with the New Hampshire Liquor Commission providing warehousing and transportation, and our team has been working around the clock to ensure a smooth transition,” Anderson said. “Our extensive experience in the beverage and alcohol industry has prepared us for this important task.

“While we are pleased with the progress thus far, there is always room for improvement, and we are committed to exceeding the expectations of all of our partners – especially the New Hampshire Liquor Commission, brokers and licensees.”

Big switch

Liquor Commission Chairman Joseph Mollica said the state understood the magnitude of the undertaking and that all things considered, it has gone well.

“Over the past several
months, our staff has worked tirelessly alongside Exel dedicating hundreds of hours to ensure a successful transition process,” Mollica said in a statement.

“With Exel, the N.H. Liquor & Wine Outlets transportation and warehousing services are being managed by a first-class, proven world leader, and the transition has been handled remarkably well.”

The state makes more than $130 million a year in profits from liquor and wine sales.

Opening the warehouse required moving 1 million cases to the massive 243,000-square-foot warehouse, with 750,000 of those cases coming from Law.

Law chose not to move any of its leftover products to the new warehouse until recently, which could have contributed to a backlog.

Meanwhile, each day, Exel gets more than 20,000 cases of freight from all over the world that has to find its way to 3,300 licensees and 78 wine and liquor outlets.

“We were extremely forthright with informing each licensee that this transition would result in some minor inconveniences for a short period of time,” Mollica said. “For example, NHLC issued four notifications to all licensees that the ability to pick up single items at the warehouse would be limited for two weeks, and also that they should stock up on hard-to-get products because of limited availability during the transfer.

“This was also noted on NHLC’s ordering website, and comes up for everyone to see as their order. Single-bottle pickup resumed yesterday, and over 1,000 bottles were picked and processed last night for licensees.”

Stocked up

In October, Dan Bellemore, proprietor of the Mont Vernon Village Store, received an email warning him to stock up, and he did.

“We are asking that you do your best to make sure your inventory on important wine and spirit items are stocked up at your locations in advance of this transition,” the Liquor Commission’s email read.

The email, sent Oct. 4, said the agency was “working hard to minimize any lapse in shipment of products,” but with the transition of nearly a quarter-million cases of booze, “it will take precise logistics and coordination by all.”

The email also informed liquor retailers to stop placing orders with Law Warehouse, and said, “Single bottle picks will not be available from October 31 through November 11.”

Bellemore said he heeded the state’s warning to stock up on supplies and hasn’t had any issues since the transition.

“We prepared ourselves,” Bellemore said. The Liquor Commission “anticipated there were going to be some holdups, so we stocked up.”

Bellmore said his expedited approach to the state’s warning was spurred by a fear of being undersupplied for upcoming events.

“We have wine tastings coming up,” Bellmore said, “so we were pretty careful about it.”

Despite the problems, a representative with the state’s largest provider of liquor, Southern Wine and Spirits, offered his praise for the job the state is doing under challenging circumstances.

“The New Hampshire Liquor Commission and Exel have been extremely accommodating throughout this process, allowing brokers and distributors to visit the new warehouse, ask questions and see firsthand how the design and technology solutions will improve efficiencies,” said Joe Dudek, vice president of North American Spirits and Wine Brokers.

“When you combine a global, market-leading operator like Exel with NHLC’s estimated savings, I believe the result is a clear winner for the state and the taxpayers of New Hampshire.”

Bradford Randall can be reached at 594-6557 or bhrandall@nashua
telegraph.com. Also, follow Randall on Twitter (@Telegraph_BradR). Kevin Landrigan can reached at
321-7040 or klandrigan@nashua
telegraph.com. Also, follow Landrigan on Twitter (@Klandrigan).