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.”
Fritz Hirst, a Chevy Chase resident and member of the advisory board who is supporting the bill to end the county’s alcohol monopoly, told Griffin, “The grocery store thing is a nice way to sort of distract the entire issue.”
Hirst and Griffin went back and forth on just how unique the county’s alcohol control model is compared to other jurisdictions around the country.
Griffin said 25 percent of Americans live in control counties or states and that studies have shown “the community is healthier and safer when it controls alcohol.”
When Hirst mentioned that Montgomery County is the only alcohol control system in the country that controls all wholesale alcohol and liquor retail sales, Griffin responded that news reports stating that as a fact are “wrong all the time.”
Hirst asked for an explanation and Griffin relented, admitting the county “is the only county in the country that operates or is set up exactly as we are,” because the county is the only control jurisdiction in which the government also controls all beer distribution.
The advisory board later voted to send a letter to County Executive Ike Leggett and council members advising them that seven members voted to support the bill to end the county’s alcohol monopoly, three members opposed it and four members abstained.
Leggett has long said he’s opposed to opening up the county to competition from private alcohol wholesalers or retailers, citing the potential loss in revenue as a major factor.
“I’m under no pretense that the County Council or county executive would change their opinion based on our letter,” Hirst said.
