Public Spirits | Page 3 of 3

Public Spirits

Should Montgomery County be in the business of distributing and selling alcohol? Plenty of people say it most definitely should not.

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His subcommittee is part of the powerful House Economic Matters Committee, about half of whose membership will turn over in the wake of the 2014 elections. Barkley thinks that may open the way in 2015 to loosening statewide restrictions on where alcohol is sold.

Since Maryland has vested virtually all powers to change liquor laws with the General Assembly, any request from county officials to change the Montgomery County control structure would come to Barkley.  

“I’ve heard from consumers saying they’d like something different,” Barkley says with a chuckle. “I’ve also heard it from the wholesalers and distributors. Of course, they would like to get into the county, so it doesn’t surprise me to hear from them.”

But he hasn’t heard from Montgomery County officials. “If the county came and said they’d like to go in a different direction, I think most people [in the legislature] would probably be supportive,” Barkley says. “I think the biggest concern would be: OK, what happens to those county employees? And, if you went in a different direction, could you guarantee them equivalent jobs with the same benefits?”

At this point, none of the three Democratic contenders for county executive appears likely to call Barkley with such a request.

“I think the system is working reasonably well,” Andrews says, “and I’m not supporting scrapping it.”

Duncan, whose plan to privatize county retail stores nearly 20 years ago was the last major effort to alter the system, says he’s willing to take another look. But he stops short of advocating change. “Clearly we need to look at how to provide better customer service,” he says. “Does that mean privatizing some of it? [Or] does that mean changes within the current department?”

Leggett, who initially backed Duncan’s plan to privatize the retail stores in the 1990s, is also open to a discussion. But he notes that when a task force looked at Duncan’s plan two decades ago, it raised doubts about the economic benefit to the county.

The one person Barkley might hear from is James Shalleck, in the unlikely event he’s elected county executive. The Republican candidate has vowed that one of his first priorities “would be a study of the whole [liquor control] department and the feasibility of privatizing it.”

“I would say that a key ingredient that is missing is an organized and vocal advocacy effort in favor of reforming the situation,” says one member of the county’s legislative delegation who requested anonymity due to the political sensitivity of the issue. “The restaurant association is not pushing this. The chambers of commerce are not pushing this. And the [wine aficionados] of Montgomery County are not an organized, potent political force. …If they were, it would be much more likely that someone would put this out there, put it on the table and force folks to start taking a position.”  

Even as he declares that getting rid of the current Montgomery County liquor control system will be a “major focus” if he wins a third term as expected this November, Franchot concedes it can’t be done overnight.

“There is no question there are issues like employment of the current workforce and [revenues] that go to the county…that are significant,” he says during an interview in his high-ceilinged office at the state Treasury Building in Annapolis. “That’s why I think it needs to be studied and phased in.

“But does it have to happen? Yes. Will it happen? Eventually it will—because government in Montgomery County is doing something that it shouldn’t do and which it’s not good at, which is selling liquor.”

Franchot believes “there will be a lot more tax revenue going to the county from increased economic activity once we get rid of [the Department of Liquor Control], because it’s a considerable wet blanket over the county right now as far as restaurants and other retail establishments are concerned.”

Private industry has argued much the same in recent years, as it has pushed to privatize liquor control systems in several states.

In 2011, voters approved a referendum privatizing the liquor industry in Washington state. Seattle-based Costco, one of the nation’s largest retailers of alcoholic beverages, pumped in more than $20 million to get the referendum passed.

According to state officials there, Washington will realize about $50 million more in revenue in the fiscal year that ends this June 30 than it did in the final year of state-controlled liquor sales and distribution. But there also have been complaints that the fees imposed on wholesalers to make up for revenue have driven up prices for consumers.

Trone, whose company owns nine stores in Washington state, says that’s not the case. “With our stores, and with others like us—such as Costco—prices went down,” he says. It was only at the small, mom-and-pop stores, he says, that prices increased.

“What it gave us was a diversity of price,” he says, “and that’s the way the free market should work. You can go to Giant and pay a certain price, or you can go to 7-11 and pay more. It’s your choice. And that’s the fair way to do it: Allow the consumer to choose.”

Louis Peck has covered politics extensively at the local, state and national levels for four decades, and covers politics for Bethesda Beat, the daily local news service on BethesdaMagazine.com. He lives in Bethesda and is on the faculty of Boston University’s Washington, D.C., Journalism Program. To comment on this story, email comments@bethesdamagazine.com.

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