Category Archives: alcohol

2022 Demcratic Primary, alcohol, Hans Riemer, liquor monopoly

Riemer Flip Flops on Liquor Control

Calling the laws governing the sale of liquor in Montgomery “antiquated and byzantine,” Councilmember Hans Riemer (D-At Large) came out in favor of abolishing the county liquor monopoly in an email blast sent out yesterday by his campaign for county executive.

This is quite a change.

Over three terms on the County Council, he has opposed doing away with the monopoly. The Nighttime Economy Task Force, which Councilmember Riemer chaired in 2013 studiously stayed away from recommending its abolition even though it was the obvious way to stimulate restaurant growth and nightlife.

Two years later in 2015, Riemer wrote here on Seventh State: “I strongly believe our county alcohol regime holds back the vibrancy of our restaurant and nightlife economy and negatively impacts the choices residents get in stores.” But even as he recognized its faults, he opposed ending the monopoly.

Instead, he championed an unworkable bill that would have allowed businesses to buy directly “boutique brands” that weren’t among the 4,500 carried by the then-Department of Liquor Control (DLC). Except that distributors were never going to run nearly empty trucks to stores or restaurants to deliver a case or two of their more obscure brands.

Meanwhile, Riemer worked to kill a bill sponsored by Del. Bill Frick (D-16) to allow county voters to decide whether to retain the monopoly. Even after the fiasco surrounding deliveries to bars and restaurants right before New Year’s just a couple of months later, Riemer stuck to his position against abolition.

Now, after three terms on the Council, Riemer has come out against the monopoly as part of his campaign for county executive.

He even argues that he is somehow more radical than David Blair because:

David Blair, on the other hand, also wants to keep the County in the liquor business. Rather than just getting out, Blair wants the County operations to compete with the private sector – creating a gigantic mess that will cost taxpayers dearly while needlessly subjecting employees to conditions that would be extremely stressful and demoralizing.

Keeping the county in the liquor business would increase competition, which is the entire point of abolishing the monopoly, while simply shutting it down as Riemer proposes would decrease it. The county liquor business might not survive this competition, but they are already established and positioned to give it a go. It’s hard to imagine that this would be more “stressful and demoralizing” than being fired, as Riemer suggests.

But the real story remains that Riemer has upended his position after twelve years on the Council as part of campaign for higher office.

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Adam Pagnucco, alcohol

House Subcommittee Kills Grocery Store Alcohol Sales Bill

By Adam Pagnucco.

The Daily Record has reported that a House of Delegates subcommittee has effectively killed Delegate Lily Qi’s bill allowing some grocery stores to sell beer and wine.

Passing this legislation was always going to be an uphill battle even though more than 70% of Marylanders support grocery store sales of beer and wine and the Maryland Retailers Association was making a big push for it. The Daily Record quoted Eastern Shore Republican Delegate Steven Arentz making the classic argument against the bill:

Most of our package stores are family-owned… We have three major grocery stores in Queen Anne’s County, and each one of them has a liquor store within 100 yards of them… this will put them out of business.

But Delegate Qi correctly noted that six MoCo grocery stores allowed to sell beer and wine had smaller beer and wine stores nearby, as we reported on Seventh State. The notion that grocery store alcohol sales will wipe out package stores is a myth and we proved it. But this myth is hard to kill because many people, including elected officials, repeat it endlessly despite evidence to the contrary.

The map above shows the Giant on New Hampshire Avenue in Silver Spring, which is allowed to sell beer and wine, and the White Oak Convenience Store, a beer and wine shop, directly behind it. Both appear in purple ovals.

The bill is still technically alive in the Senate as it was introduced there by Baltimore City Senator Cory McCray. But the vote by the Alcoholic Beverages Subcommittee of the House Economic Matters Committee against Qi’s version of the bill prompted her to say that she is withdrawing it.

Delegate Qi told me that she believes the vote in the Alcoholic Beverages Subcommittee against her bill was unanimous. The members of the subcommittee are:

Talmadge Branch, Chair (Democrat – Baltimore City)
Jay Walker, Vice Chair (Democrat – Prince George’s)
Steven Arentz (Republican – Eastern Shore)
Benjamin Brooks (Democrat – Baltimore County)
Ned Carey (Democrat – Anne Arundel)
Seth Howard (Republican – Anne Arundel)
Kriselda Valderrama (Democrat – Prince George’s)

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Adam Pagnucco, alcohol

Myth Buster: Grocery Store Alcohol Sales Will Not Destroy Package Stores

By Adam Pagnucco.

For many years, most grocery stores in Montgomery County have not been allowed to sell beer and wine, a prohibition designed to protect package stores. Most other counties in Maryland have similar rules, all set down in state law. Delegate Lily Qi has introduced a state bill loosening such restrictions, one of many efforts over the years to allow grocery stores to sell beer and wine. When the county council met to consider whether to support Qi’s bill, some council members expressed concern that it would harm small beer and wine stores. After all, if consumers could purchase beer and wine at a grocery store along with food, how could package stores compete with that?

In fact, the allegation that grocery stores would put package stores out of business if they could sell alcohol is a myth. Why do I say that?

Because there are a few grocery stores in MoCo that are allowed to sell beer and wine and package stores operate near them.

Consider the following six MoCo grocery stores that have off premise liquor licenses. Look at the maps below to see how close they are to package stores. Both the grocery stores and the package stores appear in purple ovals.

Giant Supermarket, 11221 New Hampshire Ave, Silver Spring

White Oak Convenience Store, which has an off-premise liquor license, is directly behind the only Giant in the county that is allowed to sell liquor.

Safeway Supermarket, 3333 Spartan Rd, Olney

Young Gourmet Beer and Wine, which has an off-premise license, is just a few blocks away from the only Safeway in the county that is allowed to sell liquor. Brew Belly and Olney Beer and Wine, which can sell alcohol both on premise and off, are also nearby.

Bestway Supermarket, 8540 Piney Branch Rd, Silver Spring

Flower Deli, which has an off premise license, is right around the corner from Bestway. Long Branch Beer and Wine is just a few blocks to the east.

Sniders Super Foods, 1936 Seminary Rd, Silver Spring

Sniders is within walking distance of two package stores: Seminary Beer and Wine and Spring Beer and Wine.

Dawson’s Market, 225 N. Washington St, Rockville

Dawson’s is within walking distance of Tiger Beer, Wine and Deli, which has an off premise license.

Shalom Kosher, 1361 Lamberton Dr, Silver Spring

Shalom Kosher is within footsteps of Kemp Mill Beer, Wine and Deli. The Google photo below shows just how close the grocery store is to the beer and wine store.

The allegation that allowing grocery stores to sell beer and wine will put package stores out of business is a MYTH. And now this myth is BUSTED.

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Adam Pagnucco, alcohol

Poll: 71% of Marylanders Want Beer and Wine in Grocery Stores

By Adam Pagnucco.

A new push to allow beer and wine sales in grocery stores, which is illegal in most of Maryland, is underway by the Maryland Retailers Association. And the retailers have posted a Mason-Dixon poll from 2018 on their website showing massive support for their initiative.

The poll of 625 registered Maryland voters in September 2018 shows that allowing grocery stores to sell beer and wine had 71% support overall. Support had significant majorities across every split on region, sex, age, race and party tested by Mason-Dixon.

A few elected officials in the state favor grocery sales of beer and wine, including Comptroller Peter Franchot and Montgomery County Council Members Hans Riemer and Andrew Friedson. But since this issue is a matter of state law, it’s the General Assembly that counts. The retailers are asking consumers to sign up through their website to get involved with their campaign. The prohibition on grocery store sales of beer and wine is ancient and the package store lobbyists are powerful. Consumer support is absolutely necessary to get this done.

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Adam Pagnucco, alcohol, Andrew Friedson

Council Urges Hogan, Franchot to Extend Alcohol Carryout and Delivery

By Adam Pagnucco.

In a letter spearheaded by Council Member Andrew Friedson, the entire county council is urging Governor Larry Hogan and Comptroller Peter Franchot to extend the ability of restaurants to sell alcohol by carryout and delivery after the current state of emergency is lifted. Many restaurants are hanging on for dear life and news that the state’s unemployment rate has tripled only underscores how tough it will be to sustain consumer spending. We reprint the council’s letter below.

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alcohol, Department of Liquor Control, District 18

Mila Johns: End the Monopoly

By Adam Pagnucco.

District 18 House candidate Mila Johns has sent out a mailer calling for an end to MoCo’s liquor monopoly.  The mailer contains an endorsement from Comptroller Peter Franchot, a hero to monopoly opponents who has been calling for its end for years.  This is the first mailer we can recall seeing on this subject and we appreciate Johns’s courage in calling this question so publicly.

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Adam Pagnucco, alcohol, Department of Liquor Control

Is the Liquor Monopoly Improving?

By Adam Pagnucco.

Once again, Montgomery County’s liquor monopoly is a hot issue in local politics.  As far as we know, MoCo is the only county in the nation in which the county government has a monopoly on the distribution of beer, wine and spirits and also a monopoly on retail sales of spirits.  Candidates for office disagree on whether it is needed.  In a response to David Lublin’s recent post on the subject, Department of Liquor Control (DLC) Director Bob Dorfman claims it has improved.

Has it?

We will give the monopoly credit for one thing: it did not see system-wide distribution failures in the critical week between Christmas and New Year’s last year as it did in 2015 and 2016.  That has not stopped two anti-monopoly groups from forming in the last few months, one representing licensees and another representing consumers.  But what’s really going on?  Let’s look at the data.

According to Gallup and the U.S. Department of Health and Human Services, alcohol consumption tends to be correlated with education and income.  That makes sense – people with college and graduate degrees tend to make more money, and people with more disposable income have more money available for alcohol purchases.  MoCo has lots of highly educated and wealthy people so we should be one of the leaders in alcohol spending in Maryland.

The Comptroller of Maryland, who collects alcohol taxes, posts annual reports of alcohol sales per capita for each of Maryland’s twenty-four jurisdictions on his website.  We collected the last ten fiscal years of that data and present it below.  Let’s remember when recent changes at the DLC occurred.  After many revelations of bad performance in 2014, DLC launched an “Action Plan” to improve performance in June 2015.  George Griffin, the former DLC Director who was blamed for the first New Year’s Eve meltdown, left in January 2016, about halfway through Fiscal Year 2016 (which ended on June 30).  Bob Dorfman, the new DLC Director, started in December 2016, about halfway through Fiscal Year 2017.  If these events were associated with genuine operational improvements, we would expect to see significant increases in both per capita sales and rank among jurisdictions over the last three years.

That has not happened.

Below is data on per capita sales of spirits, wine and beer in Montgomery County over the last ten fiscal years.

Spirits sales per capita have increased over the last decade, although they have barely changed since 2013.  Wine is stagnant.  Both wine and spirits fell in FY17, the first year of the new Director.  Beer sales per capita are down over the last decade and rose slightly in FY17.  But here’s the thing: MoCo’s new craft breweries are exempted from the liquor monopoly and, as a result, are doing really well.  The tiny gain in beer could be due to FREEDOM from the monopoly, not better operations at the monopoly.

Now let’s compare MoCo’s rank in per capita sales to the 23 other local jurisdictions in Maryland.

Because of its education and wealth, MoCo should be one of the leading counties in per capita alcohol sales.  It’s not.  In terms of spirits, the only county that’s worse is Somerset, which perhaps not coincidentally has its own monopoly on spirits sales.  In terms of beer, MoCo is dead last.  In terms of wine, MoCo has slid from ninth in the state to fourteenth, moving down a spot in FY17.  Jurisdictions in which residents bought more wine per capita than MoCo in FY17 included Anne Arundel, Baltimore City, Baltimore County, Calvert, Carroll, Cecil, Frederick, Garrett, Harford, Howard, Kent, Talbot and Worcester.  Does anyone believe that residents of counties with two-thirds of MoCo’s household income (or less) drink more wine than we do?

What’s happening is that consumers leave the county to buy alcohol.  That’s why numerous D.C. liquor stores are located within blocks of the MoCo border.  That’s why a fifth to a quarter of customers at Total Wine stores in McLean and Laurel come from MoCo.  The state’s Bureau of Revenue Estimates found that if MoCo customers were to return to the county to shop for alcohol in the absence of the liquor monopoly, the county would see a surge of almost $200 million in new economic activity, enabling a path forward for the county to replace every cent of lost revenue.

Dorfman is a better manager than his predecessor and we believe he is genuinely trying to improve DLC.  But Dorfman won’t be there forever and DLC has a long history of problems.  The monopoly also has a long history of promising improvement, mostly resulting in fleeting or ineffective fixes with quick relapses.  Even modest liberalization passed by the General Assembly to allow some private retail sales of spirits has been blocked.  What the above data on per capita alcohol sales shows is that, despite claims to the contrary, not much has changed.  And unless MoCo starts behaving like a normal county and allows private sector competition, true change may never come.

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alcohol, Department of Liquor Control, Montgomery County

On “Those Good Union Jobs” at the Department of Liquor Control

MCGEO has done quite a number on county residents. When discussing the hot issue of privatization of Montgomery County’s liquor monopoly, politicians automatically express concern about the potential loss of those “good union jobs.”

People would be a lot less sympathetic to the idea of protecting liquor store or distributor employees. Why on earth should we maintain an antiquated, inefficient monopoly to protect their jobs but not spend money to protect the grocery store cashier or bank teller threatened by automation?

What makes all the angst about losing “good union jobs” even more galling is that private liquor distributors are unionized by the Teamsters – a little fact that never seems to get mentioned in all the handwringing.

Privatization doesn’t threaten union jobs. It threatens union jobs that pay dues to MCGEO. So MCGEO President Gino Renne, who was paid $196,700 by his local union and an additional $20,000 by his international union last year, is naturally quite concerned. As Gino likes to say, “Just keeping it real.”

Sadly, no one seems concerned about all these Teamsters Union jobs lost due to the monopoly depriving them of a livelihood. Not to mention the restaurant jobs lost because of extra costs that make it harder to turn a profit and frustration with the Department of Liquor Control that stops businesses from opening or expanding in Montgomery.

The other unasked question is why does the DLC perform so poorly if these jobs are so great? Service at DLC stores is variable at best and most employees are unfamiliar with their product. Beyond the stories about the DLC failing to deliver product at key moments, such as right before New Year’s, I’ve also heard about the DLC dumping shipments in the middle of the bar during happy hour.

It’s almost as if Ernestine left the phone company once Ma Bell was broken up and sought refuge at the DLC. “We’re the DLC, we don’t have to care.”

It’s not as if the DLC is understaffed. Somehow, Montgomery County-based Total Wine manages to keep in stock and much better organized a far greater range of product. They do it with fewer employees who yet also seem to know about the product that they’re selling and are more likely in my experience to provide good customer service. Other stores do the same.

Similarly, I’d like to know the share of DLC workers who live in Montgomery County. While some might argue that this is irrelevant, why must Montgomery County citizens keep in place a costly system to subsidize workers who don’t even live here? Even this question has totally lost the plot as government should not be a make-work program but should provide services to residents.

Councilmembers defend the DLC because it brings in money to the county. It would be a miracle if a monopoly on booze in the DC area did not. The sad truth is that it brings in far less than it might. The amount of beer and spirits sold per capita in Montgomery is lower than almost all other jurisdictions in Maryland as well as the Virginia suburbs. Does anyone seriously believe that we drink phenomenally less than people in Fairfax? Greater efficiency would also increase profit. Couldn’t we just tax alcohol and try to grow the economic pie instead of clinging desperately on to a stagnant unloved system?

None of this means that we shouldn’t pay county employees decent wages or we should just chuck the DLC workers out of a job. But nor should taxpayers be obligated to maintain a system that doesn’t work and myopically hurts the economy in perpetuity.

It’s time to call the question and end this outdated monopoly.

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