Council backs historic liquor reforms

Since the end of prohibition in 1933, Montgomery County government has barred private restaurants and stores from purchasing alcohol from private distributors, requiring them to buy exclusively from the Department of Liquor Control warehouse.

As a result, Montgomery County has become known as a very difficult place to run great restaurants or beer and wine stores and a place where consumers cannot get the choices that are available in other communities.

This policy is the aspect of liquor control that I feel most needs to change, and I am pleased to share that today the County Council backed a resolution that will ask our state lawmakers to move forward with an historic reform: to liberate our 1,000 restaurants and stores to buy craft beer and fine wines directly from private distributors.

Throughout 2015, the County Council’s Ad-Hoc Committee on Liquor Control, which I chair and which also includes Council President George Leventhal and Councilmember Marc Elrich, has taken a deep look into the County’s liquor regulations and how they affect our community.

What we have found has been disheartening. Our restaurants and our beer and wine stores are having tremendous problems ordering from the DLC — all too often they are stuck with empty shelves and empty taps because their orders never arrive.

Problems at the DLC have become more significant partly because the consumer environment today is radically different from 80 years ago when our system was established, or even 20 years ago when the modern craft beer movement began. Today, to prosper, our restaurants and stores need an ever-expanding list of choices of specialty beer and wine — because that is what our residents want and can get elsewhere in the region.

Sales data, unfortunately shows that county residents are spending their money outside of the county — our per person in-county sales are about 1/3 less here than in Howard, Frederick and Prince George’s counties. What a loss of economic impact for our restaurants and stores and the families that depend on jobs in those industries.

The Council Committee’s solution is to allow restaurants and stores to buy “special order” products directly from private distributors. The DLC maintains a list of about 29,000 products that can be bought by restaurants and stores. About 4,500 are stocked in the warehouse for delivery, while about 24,500, largely craft beer and wine, are special order.

For restaurants and stores that want to showcase variety and choice with craft beer and wine, and the consumers who love those products, the committee’s proposed reforms are a game changer. Some restaurants and stores today have as high as 90% or even 100% of their beer/wine lists as special order.

The fiscal and employment impact on the county is manageable, particularly if the county does a better job running the department more profitably. Towards that goal, the committee has recommended expanding the number of county liquor stores. Montgomery County is the only retailer of spirits in the county, and operates 25 stores. Thanks to committee progress already embraced by the County Council and the DLC, the county will open 3 more stores in FY16 and more in subsequent years as part of a “retail modernization” plan. Each store averages about $750,000 in profits to the county while employing about 8 county workers. These new stores can absorb any workers who might be displaced by the change in distribution policy.

A second reform recommended by the committee is for the state to establish a small fee on distributors for the rights to sell into the county — a clean and simple way for the county to change how it claims revenue from alcohol sales.

The full Council’s actions today constitute a recommendation to the Montgomery County delegation in the state legislature, which has jurisdiction over liquor laws. We hope to advance legislation in the Spring 2016 session to take effect later in 2016.

Next Steps in DLC Reform

The full Montgomery County Council is now considering recommendations to reform the Montgomery County Department of Liquor Control by allowing restaurants and retail beer/wine stores to deal directly with private distributors for “special order” products. The Department of Liquor Control maintains a list of about 29,000 products that can be bought by restaurants and stores; about 24,500 are special order.

On July 21 at 7:30pm in Rockville, the County Council will conduct a public hearing about a resolution supporting this change, which the Ad-hoc Committee has introduced to the County Council.

The Council is scheduled to vote on July 28. The resolution is a request to our state delegation to draft and support legislation that will enable the county to implement this change.

This proposal represents achievable and meaningful reform, but we need to hear from you. Can you make it? Please request to testify by calling 240.777.7803 before 10am, July 21.

You can view the resolution here; please let me know if you have any questions by emailing me at Councilmember.Riemer@montgomerycountymd.gov or calling me at 240-777-7964.

Liquor Control Committee Set to Begin

As you may have heard, the Montgomery County Council recently created an Ad Hoc Committee on Liquor Control, and I am honored to be chairing that committee.

The Committee has been tasked with reviewing, evaluating, and making recommendations about alternate service delivery models and alcohol regulations and policies. In other words, the Committee will be making recommendations on how the County should control alcohol. This is such an important debate because it closely affects our restaurant and entertainment sectors, quality of life, and ultimately our local economy.

As Chair, I look forward to objectively reviewing all the evidence and community feedback on this crucial issue. To do this, we have scheduled four Committee Worksessions for this Winter/Spring.

February 27 – Overview

  • OLO Report 2015-6: Review of Alcohol Control (read the report here)
  • Discussion with Executive Branch

March 6 – DLC Management and Operations

  • OLO review of legal environment/current DLC operations
  • Presentation from IG on Preliminary Inquiry Memorandum and update on ongoing investigation
  • Discussion with DLC and MCGEO

March 20 – Economic Competitiveness

  • OLO review of DLC/private sector pricing, survey results
  • Discussion with Licensees, Distributors and Manufacturers

March 27 – Public Health and Safety

  • OLO review of research on impact of Liquor Control on public health
  • Discussion with public health and public safety officials

The Committee will resume its work after the County’s budget cycle finishes in June. We will hold a public hearing and additional worksessions with the goal of making recommendations to the full County Council for action.

But to make sure that we find a solution that works, we need your expertise. As a first step, please reach out to me with your thoughts by emailing councilmember.riemer@montgomerycountymd.gov or calling my office at 240-777-7964. You can also share your thoughts with the whole council by going to the Committee’s Website.

We hope that you will stay engaged with us throughout the entire process, and be on the lookout for updates from me after each worksession. I hope you are as excited as am I to tackle this important issue.