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County Government‘s Liquor Monopoly’s Holiday Breakdown – Let Voters Decide its Fate

Posted: January 10, 2016 at 4:13 pm   /   by   /   comments (0)

markUncaphernewBy Mark Uncapher

Over the holiday season, Montgomery County’s Department of Liquor Control (DLC) provided a compelling demonstration of why the county government‘s liquor monopoly should be ended.

The county agency acknowledged a delivery system breakdown “due to human error,” resulting in many customers not having their orders filled.  The failure left many of the DLC’s harshest critics fuming because of missed deliveries and specialty items ordered for holiday events unavailable for customers.  The admission was contained in a December 30th letter to its wholesale customers.

WTOP quoted Mike Jones at Bethesda’s American Tap Room as being unsatisfied with the apology letter because “It’s a broken record at this point.  We received no kegs for the week coming into those parties, and we were down on our supplies by at least 50%.  We were actually out of Guinness — one of our high premium holiday beverages.”

At the very same it was failing its wholesale customers, the county government liquor monopoly produced and distributed fliers to its retail customers defending the current system as a way of raising revenue funding county programs that “stays in the county working for us, not in the pockets of out-of-state liquor interests.”  County Executive Ike Leggett‘s spokesman defended the 10,000 fliers as only costing “a few thousand dollars” and as “helping people understand the benefits of the county’s control of liquor distribution.”

The fliers are the latest salvo in Leggett’s campaign against legislation sponsored by State Delegate Bill Frick (D-16) that would authorize a referendum in 2016 letting voters decide whether to allow alcohol establishments to buy directly from private distributors.  Frick’s proposal would not require the county to exit the alcohol business altogether, allowing it to continue to distribute alcohol to licensees and operate its 25 retail stores.  However, the DLC would have to compete, with privately-owned beer and wine stores and restaurants free to purchase from private distributors if they chose to.

Leggett has vocally defended the county government liquor monopoly because of the potential loss of up to $35 million in liquor profits going to county coffers.  However Leggett’s claims have been undercut by a report of the county’s own Office of Legislative Oversight.  According to their analysis, if DLC retained its retail stores, but not its wholesale monopoly, it would still generate $10 million annually in retail store profits alone.  Under another scenario, a 1-cent per ounce excise tax on alcohol would further close the revenue gap of $30 million a year.

However, the referendum legislation is facing fierce opposition from one of the county’s most powerful unions, the UFCW (United Food and Commercial Workers) Local 1994 MCGEO.  It is the county’s largest public employees union, representing about 8,000 county government employees, including about 350 DLC employees.  The union’s boss, Gino Renne, has attacked the ethics of monopoly opponents, suggesting they are motivated by “financial self-interest.”

The union response’s intensity reflects some telling admissions.  First, the union does not think DLC would be unable to survive if faced with competition.  Second, the primary reason for keeping the DLC’s monopoly is to preserve Local 1994 jobs, and the union’s dues.  And finally, the union understands that with public opinion so strongly against the monopoly, the DLC would likely lose a referendum.

Responding to the union’s campaign of personal attacks, a top aide to referendum supporter Maryland Comptroller Peter Franchot posted on social media an account of 2010 domestic violence charges — later dropped — against Local 1994 MCGEO president Gino Renne.  Renne had been charged with assault and reckless endangerment in May 2010 after his wife Joan Renne told Frederick County sheriff’s deputies that he assaulted her, pointed a gun at her and threatened to kill her. The charges were dropped in July 2010 after she declined to testify.

In all this ugly back and forth, the core principle of giving voters, and eventually customers, the opportunity to make their own choices ought not to be lost.

In December, the Montgomery County Republican Central Committee came out in support of the referendum proposal.  In announcing the party position, Republican Chairman Michael Higgs put it succinctly: “It is time for Montgomery County voters to decide whether to free our restaurants and catering industry from having to purchase liquor only from a government bureaucracy. Let’s join the rest of the country and allow private distributors.”