Montgomery County’s Soviet-style Liquor Biz:
Maryland Comptroller Peter Franchot continues his effort to break the inefficient Montgomery County monopoly on liquor sales; corruption in distribution system shortages to retailers continue / NBC4 sting of drinking delivery drivers & corruption
News4 report: Corruption in Montgomery County Liquor Control deliveries include black market and theft by employees
Montgomery Co. beer and wine sellers: Department improving, needs more changes
Evan Glass, a candidate for a Democrat nominee for Montgomery County Council at-large seat in the June 26, 2018, primary election, participated in the January 24 candidate forum hosted by Greater Capital Area Association of Realtors. Glass responded to a question on the county’s Department of Liquor Control.
The Question: Would you abolish the Department of Liquor Control to make the county more friendly to the restaurant business?
WASHINGTON — Montgomery County governs the sale of alcohol more closely than any county in the nation. While that control has caused problems in the past, private county businesses that sell beer and wine see improvements — but say the government’s operation needs more changes.
The county Department of Liquor Control has a monopoly on the wholesale distribution of all alcohol, and retail sale of spirits.
Over the recent holiday season, many restaurants, bars and beer and wine shops say they received adequate county shipments of popular wines, unlike in years past, when shipments left them without the wines customers wanted.
“There have been many improvements by the Department of Liquor Control in their wholesale operations,” said Peter Frank, who has owned and operated Talbert’s Ice and Beverage on River Road in Bethesda, for the past 62 years.
Complaints by private dealers sparked an overhaul at the county’s alcohol warehouse.
“We’ve made some pretty serious improvements in our warehouse operations,” said Bob Dorfman, who is marking his anniversary this month as the director of the Department of Liquor Control. “We’ve reconfigured our warehouse; we’ve added additional racking; we’ve employed new technologies that hadn’t existed in the warehouse before.”
There’s been a concerted effort to modernize wholesale operations, including the county’s fleet of delivery trucks.
The operations of the agency, which traces its history to the 1930s and the end of Prohibition, are convoluted, but the DLC makes room for some private businesses to sell alcohol by allowing convenience stores, such as Talbert’s, to sell wine and cold beer. While county stores are the only stores that sell spirits, beer, and wine, the beer is sold warm.
At the government-run stores, the DLC has sought to streamline inventory and boost sales.
“We changed not only our pricing strategy but our product strategy as well,” said Dorfman. Far fewer wines are being put on sale, but the sale prices are more significant than the broadly discounted prices of the past.
Private sellers complain that the DLC price strategies are unfair, with county stores selling some wine brands close to the cost of what private sellers are paying wholesale.
“The government-run stores, which are called dispensaries, are unfair competition to us — the beer and wine retail stores,” said Frank, who added that the unfairness lies in the county-run stores’ ability to set wholesale and retail prices. MORE
Liquor Control Director George Griffin defends Soviet-style Montgomery liquor monopoly
FROM BETHESDA MAGAZINE:
George Griffin, the director of Montgomery County’s Department of Liquor Control (DLC), has been on the hot seat often over the last year.
Monday night, he was there again, but this time not in front of a County Council committee or a TV news camera.
At a meeting of 14 local residents and business representatives who make up the Western Montgomery County Citizens Advisory Board, Griffin on Monday made his pitch for why residents shouldn’t support a recently introduced bill from state legislators that would open the county up to private alcohol wholesalers and retailers, ending the DLC’s monopoly on those services.
He started by pointing out the roughly $30 million a year the DLC makes for the county through wholesaling alcohol to all stores and restaurants and being the only retailer to sell liquor in the county.
“[The DLC] is an enterprise that generates about $30 million in net profit and the agency has total revenues of about $270 million a year,” Griffin said, noting the county would get nothing and lose $30 million with the “privatization” of alcohol sales. “In the real world, if you owned an enterprise that had $270 million in revenue and you were making $30 million in net profit, you wouldn’t give away [$30 million] for free and get nothing in return. That would happen with the private sector. We’d get nothing for it, which is the prospect we’re facing with privatization.”
Griffin often used the word “privatization” to describe the proposed state legislation that would end the monopoly. When an advisory board member pointed out the bill wouldn’t privatize the DLC, but merely open it up to competition from private wholesalers and retailers, Griffin backed off that description.
He did talk about the county’s $114 million in outstanding liquor bonds, an issue that eight of nine County Council members opposed to ending the monopoly also have mentioned.
The bonds were issued to pay for capital projects unrelated to the DLC, but backed by the department’s ability to generate revenue. If that revenue-making ability is threatened by private competition, Griffin told the advisory board, the bonds would likely have to be shifted back to other county funding sources, which he said would threaten $114 million in much-needed school construction projects.
He also said the No. 1 complaint he hears about alcohol sales in Montgomery County isn’t about the DLC’s service, liquor store prices or the county’s product selection, but about the fact that grocery stores can’t stock beer and wine.
“That’s people’s No. 1 complaint, but one doesn’t have anything to do with the other,” Griffin said. “That’s a statewide law. You could privatize, but you still couldn’t buy beer or wine in the grocery store.” MORE
COMMENTS ON THIS ARTICLE IN BETHESDA MAGAZINE:
- “In the real world, if you owned an enterprise that had $270 million in
revenue and you were making $30 million in net profit, you wouldn’t give
away [$30 million] for free and get nothing in return.”
When you become a competitive business in the real world you would be right but not until then.
- And in some instances in the real world, profit is returned to shareholders in the form of dividends (tax relief). But has the County Council EVER discussed returning profit to shareholders (taxpayers) in the form of dividends (tax rebates)? I doubt it. They just want to take money and spend like drunken sailors with impunity.
- If the monopoly is solely to provide off-balance sheet financing for the county pet projects its high time for it go. For one thing, the quality and scale of merchandise are pathetic, I go to DC or VA just to avoid this monopoly.
- Because there is no profit after medical and pension expenses.