Suburban liquor stores warn of looming liquor tax increase

Patrick McDonnell plans to stock up on beer, rum and other beverages before hosting a bash at his home following an annual golf outing next month.

Kristine Knutson holds wine events at her Libertyville shop, How Impressive. She also plans to buy extra cases by the end of the month.

They're among the shoppers planning ahead, as an increase in the state alcohol tax is set to take effect on Sept. 1.

Suburban liquor stores are letting customers know about the largest alcohol tax spike in state history. And they're bracing for the impact of the tax hike along with a planned price hike from suppliers.

Some stores are holding sales through the end of the month and have posted signs warning customers of the coming increases with suggestions that they stock up.

The excise tax is paid to the state by the manufacturer or distributor. Consumers can expect to see the tax on a six-pack of beer increase 25 percent, or from 10.4 cents to 13 cents, according to the Illinois Department of Revenue. The tax on a bottle of wine will go up 13 cents to 28 cents, or 86 percent, and the tax on a one-fifth bottle of distilled spirits increases 90 percent to $1.71 from 90 cents, said Susan Hofer, department spokeswoman.

Liquor store owners say they'll be hit with a double whammy when suppliers also raise their prices in September.

So shoppers can expect to pay at least a buck more for a bottle of wine and about $3 more for a 1.75 liter of alcohol, officials at Binny's Beverage Depot say.

"It's crazy. How much can they keep taxing us?" McDonnell asks.

Many shoppers are not yet aware of the tax increase, store owners have found. They expect many people to stock up once they find out.

Mary Liccardo of Island Lake is among them. She was buying a case of Samuel Adams seasonal beer Thursday when she learned of the impending tax hike. She said she now plans to buy a couple cases before the end of the month.

Shopper Linda Ricciardi was aware of the new alcohol tax. The Chicago woman, still angered about the recent Cook County sales tax, often drives to Lake County to do her shopping. She was buying cases of wine at Binny's in Lake Zurich in an effort to save money down the road.

Area liquor store owners say the timing couldn't be worse.

"A lot of people don't have jobs right now. And if they do, their wages are going down. This is one of the worst times to do this," said Frank Hernandez, owner of R&S Cardinal Liquors in Batavia.

The business owner of 28 years said it's the biggest tax increase he has seen. On top of the tax hike, he said suppliers are increasing their costs by $12 or $15 a case.

"We have to pass the increase onto the customer. We have no choice," he said.

Dale Elsner, manager of Sal's Beverage World in Addison, says the new tax is a tough one to swallow. "It's quite an increase," he said.

Elsner also finds that most shoppers are not yet aware of the boost. "We're trying to let people know. We put signs on the shelves," he said.

He's finding some customers are ordering large quantities now to avoid the tax.

However, the owner of an Elgin liquor store says his customers don't have the money to stock up.

"Most customers here are living day to day and pay check to pay check," said Geno Kenny, owner of Geno's Fine Wine & Spirits.

He doesn't think the tax will prevent people from buying booze. Instead he believes shoppers may buy a cheaper brand.

"Some shoppers will shop down," he said.

"Their (drinking) habits won't change," he said, pointing to cigarette tax increases. "I haven't seen a dip in cigarette sales. Sure, I'm selling less cartons, but the number of packs I sell is the same," he said.

Similar to the way some shoppers are stocking up, some liquor stores are doing the same thing.

Hernandez at Cardinal in Batavia said the larger chains are buying enough alcohol now to last them through the holidays. "Right now I can't walk in the backroom. It's full," he said.

He agreed that with the state of the economy, his customers are frustrated with the upcoming hit. "A lot of people are not happy with the government right now."