Is The End Near for Montgomery County’s Liquor Monopoly?

Montgomery County, our home jurisdiction, is the only county in the state of Maryland that exerts complete control over the distribution of alcoholic beverages.  With few exceptions, every pint of beer, glass of wine, and drop of spirits consumed in the county passes through the hands of the County government on its way from producer to customer.  This system has been in place since the repeal of Prohibition in 1933 left the regulation of the sale and distribution of alcohol to the states, and Maryland in turn essentially allowed counties themselves to determine how booze would been sold.  Up until last year, Montgomery County was accompanied by Worcester County in being such a “control jurisdiction,” but Worcester’s liquor monopoly ended last year.

Now, Montgomery’s system of liquor distribution is facing its own existential threat and, for the first time in a generation (or maybe ever), it seems like the forces seeking to end its monopoly may actually be in a position to do so.

Most prominently, Maryland’s Comptroller, Peter Franchot, has firmly expressed his desire to end the County’s liquor distribution monopoly and has announced his intention to work with state legislators from Montgomery County to introduce legislation to do so in the 2016 session.  (Note:  While such laws are county-specific, they must be passed by the entire Maryland General Assembly).  The Comptroller has forcefully stated that the County’s monopoly “eliminates competition, charges higher prices, offers fewer product choices and increases burdens on small businesses.”  Franchot’s position on this topic is particularly compelling because the Comptroller’s office is the top alcohol regulator in the state.

At the same time, a key group of Montgomery County legislators, led by Bethesda’s Bill Frick, has announced its own plan to put forth a bill in the 2016 session that would allow the County’s voters to weigh in via a referendum on whether the government liquor monopoly should continue.  This bill, like Franchot’s proposal, would not put the County out of the liquor business altogether, but rather require it to compete with private distributors.  That is precisely what occurred in Worcester County.

Under either proposal, even if they were to pass, the County’s control over liquor licensing, enforcement, and the like would not be effected or diminished at all (and, to be clear, our County’s regulators are among the best and most responsive in the State).  The proponents of proposals argue, however, argue that it is those activities — and those activities alone — that the County should be engaged in; and that commercial activities such as the sale and distribution of alcohol should be left to private industry.

This firm represents many bars and restaurants in Bethesda, Rockville, Silver Spring and other Montgomery County communities and I can scarcely think of any who would not welcome the opportunity to buy their products directly from private distributors who have the business incentive to provide a wide variety of products, at a competitive price, and in a timely fashion.  If you are a bar or restaurant owner — or simply a consumer — and have any thoughts on this matter, I invite you to contact me.  Due to the nature of my practice, I am often contacted by county and state officials on this matter and I would be pleased to pass along your thoughts.