Updated at 5 p.m. – The Montgomery County Council Tuesday approved a resolution that could lead to partial-privatization of the county’s Department of Liquor Control (DLC), especially when it comes to the distribution of specialty craft beer and fine wines.
But while some council members cautioned against further changes to the department that could hurt the county’s bottom line, Council member Roger Berliner said the changes with so-called special orders should be the first part of a “phased exit strategy” out of the liquor business.
“For nine years I have asked myself why our County is the only county in the country to have a monopoly in the liquor business,” Berliner said in a prepared statement. “The answer, it seems, is simple: revenue and county employee jobs. I don’t find that answer satisfying, even on a day when we are adopting a significant budget savings plan.”
The council’s Ad Hoc Committee on Liquor Control spent months examining the department, its distribution practices, prices and how the county’s unique control model for alcohol compares to others.
Hans Riemer, chairman of the committee, said the privatization of special orders – which will require changes in state law during the 2016 General Assembly – is a substantial first step toward reforming the department and addressing concerns of business and restaurant owners who have complained about the DLC.
“For restaurants and stores that want to showcase variety and choice with craft beer and wine, and the customers who love those products, the committee’s proposed reforms are a game changer,” said Riemer, who pointed to restaurants and stores with inventories that are almost exclusively what the DLC classifies as special order products.
Council member Marc Elrich, a member of the committee, again said the DLC can make common-sense changes to improve its delivery services that will allow the county to continue collecting close to $30 million annually that goes into the county’s general fund.
Part of the committee’s recommendation would establish a small fee on distributors for the rights to sell directly to county alcohol license holders, what Riemer called “a clean and simple way for the county to change how it claims revenue from alcohol sales.”
But Berliner said the revenue the county gets from distributing alcohol shouldn’t be a factor in the long-term.
“Based on answers I got when I sat in on the Ad Hoc Committee meetings, we don’t even pretend to think like a business,” Berliner said. “Other jurisdictions are delivering on 24-hour cycles, while our county businesses wait up to a week or more to get an order corrected. The testimony that was submitted to the Ad Hoc committee over these last few months was overwhelming, and carried an unmistakable theme throughout: our DLC is unresponsive and inefficient.”
Berliner said the DLC’s problems force county residents to go to Virginia and D.C. to buy alcohol.
“Total Wine in McLean estimates that one third of its business comes from Montgomery County. They love us there,” Berliner said. “We are the District of Columbia’s best friend when it comes to liquor, because our residents shop for their liquor there. If we were to repatriate the dollars that flee our county, we would plug a good portion of the revenue we are concerned about.”