A liquor shelf at a store in Florida Credit: Photo by Jeff Greenberg/Education Images/Universal Images Group via Getty Images

When voters head to the polls for the June 28 Democratic primary, they could be voting for the future of how alcohol is sold and distributed in Montgomery County.

The four Democratic candidates running for county executive – incumbent Marc Elrich and challengers Hans Riemer, David Blair and Tom Hucker — differ in their thinking about how involved, if at all, the county should be in the liquor business.

No Republicans had filed for the race as of Wednesday. The filing deadline is March 22.

Since Prohibition ended in the 1930s, the county has had exclusive control over the sale and distribution of beer, wine and spirits throughout the county.

The county Alcohol Beverage Services Department (ABS) operates a warehouse that handles wholesale distribution. The department also operates 26 retail stores.

The question of whether to maintain the current system has been debated for many years, with proponents often citing the $30 million or so in annual net profit that the department takes in. Critics often point to a lack of competition in the private sector, as well as frustration that business owners have had with getting products.

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Marc Elrich. Photo by Joseph Tran

Elrich said in a recent interview that the net profit shows that the system is working well.

“If the government’s gonna be involved in an enterprise, we have to make money on that enterprise. And we’ve been able to successfully make money on this,” he said. “Right now, that money is going to pay off bonds that the county issued for a road project. When we’re finished paying off the bonds for the road project, we can turn that same profit and use it to provide a steady stream to fund school construction or fund transportation projects. It’s a really important stream of money in terms of being able to do things in the county ….”

Elrich added that ABS has many other positive components, such as its education outreach efforts in preventing underage alcohol sales.

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“Nobody here has any incentive to sell to children. There’s no profit motive involved for anyone who works in the store,” he said. “So, I feel like we do a good job of not overadvertising, and not overpromoting alcohol …. I think we’ve been responsible in how we promote it, and we’re responsible in how we sell it.”

Elrich said many county-run stores have undergone aesthetic improvements and the department is getting better leases from landlords.

He said getting the county out of the alcohol business wouldn’t make the market more competitive.

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“People think there’s gonna be competition, and they don’t understand in the state of Maryland, prices are controlled by the state, and everybody has to sell the same thing for the same price,” he said.

Elrich said there are seven major alcohol distributors in Maryland, along with some smaller ones. He said the distributors all sell different products, and they don’t compete on profit or price.

“You have seven different distributors. Each is given a share of the market,” he said. “Each has to play by the rules where they can’t compete on price, because the state sets the price. It is a regulated system. It’s just a regulated monopoly with seven people instead of one person.”

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Hans Riemer. Photo by Joseph Tran

Riemer

Riemer, a term-limited County Council member who has been critical of ABS in the past, told Bethesda Beat in an interview that it’s time for the county to get out of the alcohol business.

Riemer said he understands the argument about $30 million a year benefiting the county, but he doesn’t think it outweighs the costs to the business community.

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“It’s generated by making it hard for restaurants and retailers to do business. It’s generated by county residents having to take multiple trips to get consumer products that they want. That’s where that money comes from. And people are tired of it,” he said.

Ultimately, privatizing the alcohol market in the county would require the state legislature to sign off, Riemer said.

“I think we would have to sit down with the state and figure out the path. I’m not gonna really condition that with any specific approach,” he said.

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Riemer said that about seven years ago, he proposed partial privatization of the county’s warehouse, which would give restaurants and stores the ability to buy products from private sellers or distributors if a product wasn’t carried in the warehouse.

“So that was legislation that we got drafted and worked through in Annapolis. We got close, but it didn’t get all the way through, and learned a lot of lessons from it,” he said.

David Blair. Photo by Joseph Tran

Blair

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Blair favors allowing ABS to continue operating, but opening up the market for private distribution. His proposal grew out of several conversations he had with restaurant owners in the past year.

“There’s no universal consensus that we should abolish ABS,” he said in an interview. “Many restaurant owners think it’s a very efficient system and we don’t need to get rid of it, while other restaurant owners have particular brands that they wouldn’t have access to otherwise, and they’d prefer to have a direct relationship with the private seller. And so, I think you can do both.”

Blair, a businessman who ran for county executive four years ago, said his plan is simply about giving consumers more choices.

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“Today, the county owns parking garages and there’s private parking garages. It works,” he said. “This isn’t overly complicated. It just gives restaurants options. And at this point I think we should be doing everything we can to spur new business development in supporting our restaurants, and this seems like a sensible solution.”

Elrich rebutted Blair’s analogy.

“You can’t compare alcohol and parking, number one. But a store can order any wine they want or any beer they want. If the county doesn’t have it… the county will order you the wine,” he said.

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Blair said he wants to keep the positive momentum of ABS going, but make life easier for business owners.

“We need to start creating an environment where restaurateurs want to start opening new restaurants here. These are the types of solutions that we need to put in place,” he said.

Riemer criticized Blair’s proposal, saying it takes away revenue from ABS while “creating chaos with county operations.”

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“It’s kind of the worst of both worlds. It creates huge fiscal problems for the county and has limited value, versus just getting out of the alcohol business,” he said.

Tom Hucker. Photo by Joseph Tran

Hucker

Hucker, a two-term council member, told Bethesda Beat that he thinks many previous problems that restaurant owners had in getting deliveries were improved under the oversight of former ABS Director Bob Dorfman, who left the job at the end of 2020.

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“Many of those problems have been addressed … but that said, it needs more reforms to make it more customer friendly and give better selections for the residents,” he said.

Hucker said he would like to see the department promote locally produced beer and wine more often, continue to make the stores more attractive and expand the number of products offered.

Asked about the proposal to do away with the monopoly, Hucker said it would be difficult because the revenue generated from ABS would not be easily replaced.

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“That’s hard since most of our budget goes to personnel … and other human services. It’s a challenge,” he said.

Hucker said he is grateful to ABS workers for putting their health and safety at risk during the COVID-19 pandemic for the last two years, and to the department for allowing businesses to sell alcoholic beverages for carryout and delivery at the beginning of the pandemic.

“I’m really grateful for them for keeping the economy running over the last two years,” he said.

Dan Schere can be reached at daniel.schere@bethesdamagazine.com