Montgomery Co.'s liquor monopoly under fire Business, legislators seek privatization

March 04, 1997|By Candus Thomson | Candus Thomson,SUN STAFF

Of the 3,142 counties in America, only one holds a monopoly on the distribution and sale of booze: Montgomery County.

Now a growing number of business leaders and state lawmakers are pressing for last call for the government-owned stores.

"The county should not be in the business of liquor sales," said Del. John A. Hurson, a Bethesda Democrat. "It's morally bankrupt. The County Council continues to be blinded by how much money it is making."

Critics of the operation -- and there are many -- say Montgomery has it all: crummy hours, limited locations, lousy stock. It wasn't until last year that the stores began accepting credit cards.

And, they say, while the government collects nearly $3.5 million a year from its 21 stores, it loses a large number of customers who border hop to Prince George's County or the District of Columbia.

Over the years, those who want the county to retain control over liquor sales have been able to defeat challenges to the system. But last month, opponents scored their first victory, albeit a minor one.

By a vote of 15-8, Montgomery delegates in the General Assembly endorsed a freshman lawmaker's bill to phase out the county stores and sent it on to their Senate colleagues, who spiked it. Supporters were buoyed by their progress.

"A lot of Cherry Herrings were thrown up in our paths," joked the bill's sponsor, Del. Adrienne A. Mandel, a Silver Spring Democrat. "But we're building a consensus. It's an educational process."

It also is a process that will have to cut through 60-plus years of tradition.

When Prohibition ended, Maryland counties were permitted to choose their liquor destiny: dry, open or government-controlled. Montgomery and a handful of others chose local control, but only Montgomery retains its hold over the wholesale distribution of hard liquor, wine and beer and retail sales of hard liquor.

About 280 merchants are authorized by the county to sell beer and wine.

Eighteen states still control the sale and distribution of alcohol, but the governor of one of them -- Pennsylvania -- is trying to privatize that state's 600 stores, which bring in $240 million annually.

Montgomery County Executive Douglas M. Duncan, who also wants to extract the county from the retail liquor business, asked 17 residents last year to develop a plan. The task force recommended selling retail franchises to prospective stores owners, but also urged Duncan to keep his hand in the wholesale business by requiring stores to buy exclusively from the county warehouse in Rockville.

The retail-wholesale question is one that divides the supporters of privatization. But most, like Mandel and Hurson, are willing to concentrate on the stores.

"It's just wrong for government to be doing something the private sector does," Hurson said. "Why don't they go into the video store business? Why don't they set up a pharmacy?"

Opponents of privatization fear if the county loses control, liquor stores will proliferate, endangering children and tarnishing Montgomery's image. Indeed, Duncan rejected a task force recommendation to raise the number of stores from 21 (one for every 38,000 residents) to more than 50 (one for every 15,000 residents). By contrast, Baltimore County has 178 package stores (one for every 4,000 residents); Prince George's, 140 (one for every 5,500); and Anne Arundel, 78 (one for every 5,900 residents). All three jurisdictions have other classifications of licenses that permit some restaurants and taverns to sell off-premises as well.

The Coalition for Sensible Alcohol Policies, a group of social service and civic activists, has called for a moratorium on efforts to privatize until a study can determine its impact on health and families.

Backers of the status quo also worry about the loss of revenue and employment for the 300 county workers, and believe opponents are not driven by the desire for better service or selection. The bottom line, they say, is the bottom line.

"The private sector would love to get its hands on this," said Frank C. Orifici, acting director of the Department of Liquor Control. Orifici dismissed the criticism of his operation, pointing to studies that show no more than 6 percent of the population shops outside the county. "The people who do, work in the district and want a wine from the Wine Spectator" [magazine], he said.

Instead, he said, the numbers show that 10 percent of a Bethesda store's business comes from Washington. As to complaints that the state's most populous county ranks only fifth in the state in per capita consumption of hard liquor and beer, Orifici said the problem is that Montgomery does not have the types of facilities that boost those numbers: sports facilities, banquet halls and convention centers.

Mandel said she will introduce her bill again next year with the changes suggested by her colleagues and Duncan, who would like to see the county issue franchises for a fee, plus a percentage of revenue from retail sales.

"There is sentiment for privatization," said Duncan spokesman David S. Weaver. "But there are as many ways to achieve this as there are liquor stores in the county."

Pub Date: 3/04/97

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