Ad Hoc Committee to Introduce Resolution on Liquor Control
The Montgomery County Council’s Ad Hoc Committee on Liquor Control will introduce a resolution at 9:40 a.m. on Tuesday, June 30, that asks Maryland lawmakers to change State law to permit the wholesale distribution of special order beer and wine products in Montgomery County by private wholesalers.
According to a news release, amending Maryland law in this area would enable the county to shift the sale and distribution of products already sold in the county by the Department of Liquor Control to private wholesalers. The changes requested in the resolution would expand customer choices, improve customer service and enable the Department of Liquor Control to focus on its core operations.
The Ad Hoc Committee is chaired by Councilmember Hans Riemer and includes Council President George Leventhal, chair of the Council’s Health and Human Services Committee, and Marc Elrich, chair of the Council’s Public Safety Committee. Since December 2014, committee members have been studying and reviewing issues related to the distribution and sale of alcoholic beverages in the County.
“One of the factors that makes creative communities thrive is a vibrant restaurant scene offering a wide array of small label beverages, such as craft beer or fine wine,” said Councilmember Hans Riemer. “As the consumer market for these products is exploding, Montgomery County must adapt with a new approach for the Department of Liquor Control. The approach recommended by our committee would allow the county’s nearly 1,000 restaurants and stores to go directly to private distributors and manufacturers for craft products, rather than ordering them 100 percent through the Department of Liquor Control. Without compromising public health, this new model for the Department of Liquor Control will have a huge impact on county businesses and our quality of life. ”
During the Ad Hoc Committee’s deliberations, one of the most significant recurring issues was the Department of Liquor Control’s process for the sale and distribution of special order products, particularly special order beer and wine. Restaurant owners and beer and wine shop owners attended committee meetings and consistently described their inability to obtain the alcoholic beverage products that they rely on to run their businesses. Committee members have determined that shifting special order beer and wine to wholesale distribution would help remedy the issues identified by businesses, expand consumer choice and improve customer service.
Council President George Leventhal said, “It’s clear to me that the Department of Liquor Control is working to improve its operations as a direct result of County Council oversight. Although the Council doesn’t have direct supervisory authority, our work is making a real difference.”
Many of the improvements that committee members are seeking require changes to State law. The resolution calls on Maryland lawmakers to amend current law to allow the County to improve the distribution system for special order beer and wine products and to expand choices for consumers. This resolution also recommends that the County be allowed to establish a fee on private wholesale distribution to replace the profits potentially lost by the Department of Liquor Control in this area.
These changes will help the Department of Liquor Control focus on its core operations and better serve its customers with minimal impact on profits or County jobs. Committee members also note that this change will make the County more competitive in the region when it comes to alcohol sales. These changes should also help to enhance the nighttime economy for residents, employees and visitors.
“After a thorough review of the Department of Liquor Control’s operations by the Ad Hoc Committee, I am pleased to see an action plan by the department to resolve customer complaints and improve operations,” said Councilmember Marc Elrich. “One issue that I have not seen a plan for that I believe will fix the problem is the speedy fulfillment of special orders. So I, along with my colleagues, recommended requesting a change in State law to allow wholesalers to distribute special orders directly to customers in the County, provided that we do not lose revenue. If the department can satisfactorily address the special orders problem before State law is changed, then I don’t see a need to implement an alternative direct distribution method.”
The Council meeting will be held in the Third Floor Hearing Room of the Council Office Building at 100 Maryland Avenue in Rockville and will be televised live by County Cable Montgomery (CCM—Cable Channel 6 on Comcast and RCN, Channel 30 on Verizon). The broadcast also will be streamed at: http://tinyurl.com/khktggw.
Currently, the County’s alcohol distribution system is a “control” model where the Department of Liquor Control manages the wholesale distribution of all alcoholic beverage products and controls the retail sale of all packaged liquor products sold in the County. All other Maryland counties are “license” jurisdictions, where private sector businesses manage wholesale and retail sales of beer, wine and liquor.
Each year, the Department of Liquor Control provides an average of $25.7 million to the County’s General Fund from the sale of alcohol. The Council’s Office of Legislative Oversight (OLO) estimates that privatizing special orders could result in a loss of up to $5-7 million in gross profit annually. The Ad Hoc Committee’s resolution recommends mitigating these losses by expanding the Department of Liquor Control’s retail operations through opening new locations and improving customer service and/or establishing a fee for private distributors.
Much of the committee’s review has been guided by a report from OLO titled “A Review of Alcohol Control in Montgomery County.” The OLO report was released on Feb. 10. The entire report can be viewed at: http://tinyurl.com/od82zd8.
The full text of the resolution can be found on the Council’s website at http://montgomerycountymd.granicus.com/MetaViewer.php?view_id=6&event_id=1729&meta_id=86028. A public hearing on this resolution is tentatively scheduled for July 21 at 7:30 p.m. Individuals who wish to speak may sign up to testify by calling 240.777.7803.
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