By Adam Pagnucco.

The Daily Record has reported that a House of Delegates subcommittee has effectively killed Delegate Lily Qi’s bill allowing some grocery stores to sell beer and wine.

Passing this legislation was always going to be an uphill battle even though more than 70% of Marylanders support grocery store sales of beer and wine and the Maryland Retailers Association was making a big push for it. The Daily Record quoted Eastern Shore Republican Delegate Steven Arentz making the classic argument against the bill:

Most of our package stores are family-owned… We have three major grocery stores in Queen Anne’s County, and each one of them has a liquor store within 100 yards of them… this will put them out of business.

But Delegate Qi correctly noted that six MoCo grocery stores allowed to sell beer and wine had smaller beer and wine stores nearby, as we reported on Seventh State. The notion that grocery store alcohol sales will wipe out package stores is a myth and we proved it. But this myth is hard to kill because many people, including elected officials, repeat it endlessly despite evidence to the contrary.

The map above shows the Giant on New Hampshire Avenue in Silver Spring, which is allowed to sell beer and wine, and the White Oak Convenience Store, a beer and wine shop, directly behind it. Both appear in purple ovals.

The bill is still technically alive in the Senate as it was introduced there by Baltimore City Senator Cory McCray. But the vote by the Alcoholic Beverages Subcommittee of the House Economic Matters Committee against Qi’s version of the bill prompted her to say that she is withdrawing it.

Delegate Qi told me that she believes the vote in the Alcoholic Beverages Subcommittee against her bill was unanimous. The members of the subcommittee are:

Talmadge Branch, Chair (Democrat – Baltimore City)
Jay Walker, Vice Chair (Democrat – Prince George’s)
Steven Arentz (Republican – Eastern Shore)
Benjamin Brooks (Democrat – Baltimore County)
Ned Carey (Democrat – Anne Arundel)
Seth Howard (Republican – Anne Arundel)
Kriselda Valderrama (Democrat – Prince George’s)

By Adam Pagnucco.

For many years, most grocery stores in Montgomery County have not been allowed to sell beer and wine, a prohibition designed to protect package stores. Most other counties in Maryland have similar rules, all set down in state law. Delegate Lily Qi has introduced a state bill loosening such restrictions, one of many efforts over the years to allow grocery stores to sell beer and wine. When the county council met to consider whether to support Qi’s bill, some council members expressed concern that it would harm small beer and wine stores. After all, if consumers could purchase beer and wine at a grocery store along with food, how could package stores compete with that?

In fact, the allegation that grocery stores would put package stores out of business if they could sell alcohol is a myth. Why do I say that?

Because there are a few grocery stores in MoCo that are allowed to sell beer and wine and package stores operate near them.

Consider the following six MoCo grocery stores that have off premise liquor licenses. Look at the maps below to see how close they are to package stores. Both the grocery stores and the package stores appear in purple ovals.

Giant Supermarket, 11221 New Hampshire Ave, Silver Spring

White Oak Convenience Store, which has an off-premise liquor license, is directly behind the only Giant in the county that is allowed to sell liquor.

Safeway Supermarket, 3333 Spartan Rd, Olney

Young Gourmet Beer and Wine, which has an off-premise license, is just a few blocks away from the only Safeway in the county that is allowed to sell liquor. Brew Belly and Olney Beer and Wine, which can sell alcohol both on premise and off, are also nearby.

Bestway Supermarket, 8540 Piney Branch Rd, Silver Spring

Flower Deli, which has an off premise license, is right around the corner from Bestway. Long Branch Beer and Wine is just a few blocks to the east.

Sniders Super Foods, 1936 Seminary Rd, Silver Spring

Sniders is within walking distance of two package stores: Seminary Beer and Wine and Spring Beer and Wine.

Dawson’s Market, 225 N. Washington St, Rockville

Dawson’s is within walking distance of Tiger Beer, Wine and Deli, which has an off premise license.

Shalom Kosher, 1361 Lamberton Dr, Silver Spring

Shalom Kosher is within footsteps of Kemp Mill Beer, Wine and Deli. The Google photo below shows just how close the grocery store is to the beer and wine store.

The allegation that allowing grocery stores to sell beer and wine will put package stores out of business is a MYTH. And now this myth is BUSTED.

By Adam Pagnucco.

A new push to allow beer and wine sales in grocery stores, which is illegal in most of Maryland, is underway by the Maryland Retailers Association. And the retailers have posted a Mason-Dixon poll from 2018 on their website showing massive support for their initiative.

The poll of 625 registered Maryland voters in September 2018 shows that allowing grocery stores to sell beer and wine had 71% support overall. Support had significant majorities across every split on region, sex, age, race and party tested by Mason-Dixon.

A few elected officials in the state favor grocery sales of beer and wine, including Comptroller Peter Franchot and Montgomery County Council Members Hans Riemer and Andrew Friedson. But since this issue is a matter of state law, it’s the General Assembly that counts. The retailers are asking consumers to sign up through their website to get involved with their campaign. The prohibition on grocery store sales of beer and wine is ancient and the package store lobbyists are powerful. Consumer support is absolutely necessary to get this done.

By Adam Pagnucco.

Craft breweries have been growing rapidly in Maryland and elsewhere, forever changing the beer business.  Maryland scored a huge win a couple months ago when Diageo announced their intention to open a $50 million Guinness brewery in Baltimore County, creating a tourist attraction and dozens of jobs.  Best of all, unlike many employers, Diageo is not asking for one thin dime of public subsidy to come to the state.  But instead of welcoming the new facility with open arms, the House of Delegates reacted by making it harder for Diageo to do business here, as well as many other breweries in Maryland.

The debacle began when Diageo asked for a change in state law to allow them to sell 5,000 barrels of beer at a restaurant and tap room on the brewery site.  (Maryland’s current limit of 500 barrels is by far the lowest in the nation; the second-lowest state, North Carolina, has a limit of 25,000 barrels.)  Other brewers sought a limit of 4,000 barrels in on-site sales for their own operations and five different bills followed.  HB 1283 was the one that passed the House of Delegates and did three main things.

1. It increased the on-site sales limit to 2,000 barrels. Breweries could apply to the Comptroller for permission to sell another 1,000 barrels on-site, but they would have to go through a distributor to do so.  That means the brewery would have to brew its own beer, then turn it over to a distributor, then receive it back from that distributor and of course pay the distributor a fee for its service.  Guess who ultimately pays that fee?  That’s right, you the customer!

2. It established closing times for tap rooms of 9 PM during the week and 10 PM on weekends, down from local closing times ranging from midnight to 2 AM.

3. It limited tap room sales to beer brewed on-site only. This repeals a long-standing practice in which brewery tap rooms supplement their own products with contract beer brewed for them by other breweries.  Such contract beer sales are major sources of revenue for some craft brewers and make tap rooms more attractive to customers.

Brewers characterized the combination of changes as “one step forward and two steps back” and predicted layoffs and business losses.  Why would the House pass such a bill?

One of the biggest opponents of liberalizing rules on craft breweries is the Maryland State Licensed Beverage Association, which represents restaurants and small alcohol retailers.  The group is particularly influential in Annapolis as its PAC has contributed over $180,000 to state politicians since 2005.  The association sees craft brewers as competition for its members.  From a zero-sum perspective, every pint purchased in a brewery tap room is a pint not purchased in a restaurant or package store.  But that view doesn’t recognize the synergies between these types of establishments as well as their differences.  Diageo’s brewery has the potential to be a major tourist facility, bolstering the entire local economy.  And if a consumer purchases a new product at the Diageo site and likes it, he or she will be motivated to buy that same product at restaurants and stores.  That means more business for everyone.

Some brewers would prefer that HB 1283 simply die in the Senate because of the problems it would cause, but it’s not so simple.  If the bill dies, the state’s current on-site sales limit of 500 barrels would stay in place.  That could cause Diageo to cancel its project, costing Baltimore County a $50 million tourist attraction that other states would kill to get.  Think of the impact that would have on the industry’s perception of Maryland.  If we lose Diageo, what other major brewer would ever relocate here?

Maryland has a number of anti-competitive laws on alcohol, including the much-loathed prohibitions on sales in most grocery stores and Montgomery County’s dysfunctional liquor monopoly.  The last thing we need is even more of these laws, especially if it causes us to lose a major employer and gives us a national black eye.  HB 1283 must be fixed.  Cheers to the State Senate if they can get it done.