County Liquor Exec Fires Back at Group’s Call To Exit Alcohol Business
Monopoly on distribution and sales has been debated for decades
The leader of Montgomery County’s Department of Liquor Control says the department received an unfair evaluation by a pro-business advocacy group that argued the county should end its wholesale and retail liquor monopoly.
Robert Dorfman, who was appointed to the job in late 2016, objects to the use of the label “monopoly.” He said 17 states have total control of liquor businesses.
“People talk about Montgomery County, because it’s the only county in the country with a monopoly,” he said. “One-third of the United States operates like we do.”
A report last week from Empower Montgomery on the overall county business climate suggested the liquor operation could be run more efficiently if it was in private hands, a position that has been debated for decades.
The department generates about $30 million in net profit each year, according to Dorfman.
Sales revenue, he said, typically totals around $300 million, with most of that money being used for operating expenses and products.
Between fiscal 2007 and 2017, operating expenses rose from $180.2 million to $273.8 million, the Empower Montgomery report noted. In each year, the report noted that the department expenses represented the largest share among all “business-type activities,” or those that generate revenue.
“As an example, available data regarding per capita alcohol deliveries indicate levels much lower in Montgomery County than the statewide average or in neighboring counties. Because many Montgomery County residents commute for work, it is reasonable to assume that residents often purchase alcohol in neighboring Maryland jurisdictions or in the District of Columbia instead of inside the county,” the Empower Montgomery report noted.
But Dorfman said the report left out a key fact that sales have also increased concurrently with expenses. Sales revenue totaled $201.7 million in fiscal 2007, compared to $296.2 million in fiscal 2017, according to the county’s comprehensive annual financial reports.
Maryland Comptroller Peter Franchot too has long been an advocate to dissolve the department, saying in an interview last month that the agency was a “colossal anchor weighing down the county’s restaurants and small businesses.”
Franchot’s office in 2015 issued a report that stated decoupling Montgomery County from the liquor businesses would have created 1,364 new jobs and $52.6 million in new wages, along with $193.7 million in new economic activity by 2020.
The report also found that Montgomery County’s per capita deliveries of beer, wine and distilled spirits was lower than the state average and the neighboring jurisdictions of Howard, Prince George’s, Anne Arundel, Frederick and Baltimore counties and Baltimore City.
“It’s a shame, because whatever the county budget is…. It’s just a drop in the water as far as the profit they get from this monopoly control they get from distilled products,” he said.
But Dorfman noted that liquor department profits help prevent the need to raise taxes — a goal of County Executive Marc Elrich.
The director also insists that the goodwill work that the DLC does, such as partnering with Mothers Against Drunk Driving, helping to advocate at the state level for an ignition interlock program for drivers and holding information sessions throughout the community on the liquor license application process is key.
Privatization, he said, wouldn’t yield the same results.
“Because their [private companies’] responsibility to their shareholders is different than our responsibility to Montgomery County’s residents and what their expectations are,” he said.
Dorfman said he is open to hearing an alternative plan for how the county should operate the liquor industry, but thinks the only way to create more revenue and more jobs is to add a liquor store on every corner, against the public’s wishes.
“Can you add more jobs? Sure you can add more jobs. You just need to add more stores,” he said.
The County Council has opposed the privatization of alcohol sales in the county, as has Elrich and former County Executive Isiah Leggett, who argued that the revenue was needed to help prevent taxes from rising.
Former County Executive Doug Duncan pushed unsuccessfully for liquor privatization in the mid-1990s.
Dan Schere can be reached at Daniel.firstname.lastname@example.org