Wegmans vs. the liquor lobby

Our view: The ban on grocery store sales of alcohol has one purpose -- preventing competition, to the benefit of liquor distributors and retailers and to the detriment of consumers

May 10, 2012

If local pharmacists could write the regulations, Marylanders probably wouldn't ever have been allowed to get their prescriptions filled at chain stores like Walgreens and Rite-Aid. Independent video stores probably would have liked to outlaw Blockbuster, just as small bookstore owners probably would have been just as happy if the state had a ban on Barnes & Noble. (For that matter, Blockbuster might like an injunction against Netflix and Barnes & Noble on Amazon.com.) And most of all, Main Street merchants everywhere would probably love a world where Walmart was illegal.

The idea of laws like those sounds absurd. If a new merchant provides consumers with a more attractive mix of price, selection and service, we call that progress. That competition forms the heart of capitalism, and although it may be painful for those who are forced to adapt or go out of business, we recognize that on the whole, it's a dynamic that serves the greater good.

Except, that is, when it comes to liquor stores. There's a huge fight brewing in Howard County where the popular and successful grocery chain Wegmans is setting up a new market and wants to rent a large space on second floor to a liquor store. This would be unremarkable in most states, with the only oddity being that the proposed liquor operation would be a separate business with separate cash registers rather than an aisle or two in the store itself. But in Maryland, where decades-old law generally prohibits grocery stores from selling alcohol, it has become the new focal point in an increasingly pitched battle between the liquor industry and consumers.

The Howard County Alcoholic Beverage Hearing Board was deluged with opposition when it considered the license for the Wegmans-connected store, most of it from local liquor store owners. They pointed to the proposed ownership of the new store — 90 percent would be controlled by the husband of Wegmans' president — and argued that the arrangement would effectively violate the ban on grocery stores selling alcohol. The objections seem to have resonated with the board, which has asked for more information and delayed its decision until June.

Liquor boards in different parts of the state have made widely divergent rulings on similar arrangements, and Howard County officials could go either way when they resume deliberations on this application. But the important issue here isn't whether this particular proposal conforms with the law. The real question is why Maryland has such a law in the first place.

The closest backers of the law come to finding a broader public purpose in it is to argue that small, local liquor store owners will be more responsive to the communities in which they work and live than would large chain stores. But grocery stores have just as much need (if not more) as small liquor stores to be sensitive to local concerns. After all, they would need to be concerned with maintaining good relations not just with those who buy beer, wine and spirits but also those who buy meat, bread and produce. Moreover, chain restaurants are already allowed to have liquor licenses in Maryland, and they have managed to operate without endangering the public welfare any more than mom and pop bars and restaurants do.

The real reason the liquor industry wants to maintain the status quo is that it prevents competition. Owners of liquor stores near the Columbia Wegmans site testified that they worry the new store would drive them out of business. That might be an exaggeration; they and their peers around the state seem more worried about a case like this setting a precedent that other grocery stores would follow. That would certainly change the competitive landscape for small liquor stores and would force them to adapt. But the lack of such restrictions in 33 other states has not led to the extinction of small operators; it has just meant that they have to offer something that the chain stores don't — a wider selection, more knowledgeable staff, better customer service.

It is not the place of the Howard County liquor board to decide the wisdom of the state law. The task before it is simply to decide whether the Wegmans proposal fits within it, and as has been the case with other liquor store-grocery store combinations that have cropped up, the details of ownership and management structure will be important in their deliberations. But it's time for the General Assembly to take up this issue. The legislature has taken small steps in recent years toward alcohol laws that benefit consumers, not the liquor lobby, such as a limited foray into allowing wineries to ship directly to customers in the state and a decision this year to allow the practice of corkage in restaurants that have liquor licenses. Rescinding the prohibition on grocery store sales of alcohol is the next logical step.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.