2015 | News

New Special Order System Preferred By Local Beer and Wine Store Owners

Some local beer and wine store owners have had bad experiences with Montgomery County’s alcohol distribution system.

On Friday, a few of them will speak up in favor of a new approach. It would allow licensees to buy specialty wines and craft beers from private wholesalers instead of the county’s Department of Liquor Control (DLC).
“I am wholly frustrated by the shortcomings of a dysfunctional, unnecessarily cumbersome system which does not need to exist,” wrote Capital Beer and Wine owner Justin McInerny in an email to Councilmember Hans Riemer.
Riemer, who’s chairing an ad-hoc Council committee on the county’s unique alcohol control system, is pushing for the partial privatization model that would allow private distributors to fill so-called “special orders.”

Council President George Leventhal said problems with the county’s special order system are among the main complaints he hears from licensees who operate beer and wine stores or restaurants.
“Many items listed as special order are not available,” McInerny wrote about the DLC’s inventory. “The fact that a product is listed in the [DLC’s] system only means that the product was at one point available. Many products come and go quickly with the season, market demand, production limits and other factors.”
McInerny, whose store at 7903 Norfolk Avenue specializes in specialty products, is one of four licensees scheduled to take part in the ad-hoc Council committee’s hearing on Friday morning.

Another, Mike Hill of Adega Wine Cellars & Cafe in Silver Spring, told Riemer that he’s experienced consistent errors and “a lack of communication” when it comes to DLC delivering special order products, which make up 85 percent-90 percent of his store.
“The inability for the DLC to deliver items that our loyal customers wait weeks upon weeks for greatly affects our top line,” Hill wrote. “The inconsistencies (3 cases of XYZ wine ordered. 7 cases delivered; 5 cases of 123 wine ordered, 11 bottles delivered!!!) are a major issue. I had a much easier time as a buyer for a DC restaurant. I even had a much easier time as a buyer in the heart of the bible belt in Atlanta, GA, where I lived for 6 years!!!”
The Friday hearing will also include representatives from the distribution and manufacturer side of the industry, many who are on the other side of the coin from licensees.
“Montgomery County distributes wines physically and accepts payments. In essence, for special order wines, the DLC acts somewhat like a contracted delivery service,” wrote Patricia Stevens, president of a small distributor called Global Wines Maryland.
Stevens did write that the DLC’s new Oracle system for tracking orders and inventory needs fixes. But she also said the system — which debuted in February — is an improvement over how the DLC used to track special orders.
“There were mysterious occurrences when wine simply disappeared,” Stevens wrote.
On Valentine’s Day 2014, Stevens said a restaurant had planned a special menu around two special order wines that never showed up, meaning the restaurant’s marketing was a waste.
“Please note that this was a loss to the County as well,” Stevens wrote. “We were paid for the wine as we delivered it, but the County never received payment because the wine was never delivered.”
Vicky McDowell, CEO of a trade group that represents small- and mid-sized liquor companies, will tell the committee her group is also in favor of maintaining DLC and the county’s control model.
“Smaller suppliers feel they have a level playing field in the control states because all companies who want to get listed in the states must follow the same criteria and everyone knows that all companies (small, mid-size and large) are following the same rules,” McDowell wrote in pre-submitted testimony.
Only the DLC is allowed to sell liquor for off-premises consumption in Montgomery County, which they do through 25 retail liquor stores. County Executive Isiah Leggett has proposed adding three stores to the operation in next year’s operating budget.
Kelly Spillane, from liquor wholesaler Castle Brands, took the distributors’ argument one step further, claiming prices will not decrease with privatization because of new state taxes. The higher cost of certain alcohol products has been one reason given by proponents of changing DLC.
“Retaining state revenues while adding a fourth tier run by two distributors do not make prices go down,” Spillane wrote to the committee. “As we all have seen in the state of [Washington], the only losers have been consumers, who now pay much higher prices for brands they have long been loyal to and private citizens who bid for licenses only to find out the law as it was written does not leave them with any possibility of surviving.”