New Slogan? We Don’t Care. We Don’t Have To. We’re the DLC.
Last week, we reported that Department of Liquor Control stores completely fouled up deliveries in the week before New Year’s. Now, DLC Director George Griffin did issue an apology. But that doesn’t restore any of the lost income or makeup for the stress caused by this total snafu.
Councilmember Roger Berliner thinks that this is yet more evidence that it is time for the DLC to go the way of the dinosaur:
Leventhal Attacks Berliner on Facebook
Councilmember George Leventhal came out swinging in comments on his colleague’s Facebook posts:
Restaurants are a major industry in Montgomery County. Beyond his misguided self-serving beliefs, saying that liquor reform is only of interest to restaurateurs is like saying that education is only of interests to parents so people should really quit their complaining. I’m sure restaurant owners appreciate George’s relegation of their repeat problems to illegitimate concerns.
BTW, restaurants are not flourishing as much as we might hope. Elm St. in Bethesda Row is one of the hottest blocks in the county with high pedestrian traffic. Right now, there are three empty restaurant spots on the block with one more store ready to close. In Silver Spring, Jackie’s is calling it a day and Jackie Greenbaum says she’d never open another restaurant in MoCo–it’s just too difficult.
The Starbucks Defense
But hey, George has the Starbucks defense:
Of course, the difference is that, if you have a problem at Starbucks, you’re likely to get a good response to a complaint. They want you as a customer. If not, you have the option to shop elsewhere. But the DLC Monopoly forces consumers and businesses alike to deal with them. Eerily reminiscent of the legendary Lily Tomlin SNL skit posted at the top regarding the phone company monopoly: “We Don’t Care. We Don’t Have To. We’re the Phone Company.”
George’s blithe dismissal of major problems at the DLC–even those affecting major customers who were buying a lot more than a latte and whose livelihoods depend on it–shows an alarming lack of concern for constituents or willingness to listen. In George’s view, mediocrity in a monopoly government service is acceptable–a level of contempt that his constituents should not.
One of the dimensions to the current debate about Montgomery County’s Department of Liquor Control (DLC) that has not been empirically explored is its impact on the county’s restaurant industry. Restaurant owners have many complaints about DLC and some have said that entrepreneurs will not open new establishments here because of it. However, several urban districts in the county have lots of restaurants that seem to be doing just fine. So what’s going on?
One of the many programs run by the U.S. Census Bureau is the Economic Census, a very detailed look at industries by geography that is updated every five years. Among the statistics collected by the Economic Census are the number of establishments, the sales of those establishments, and the number of employees. Below are the combined totals of two industry segments – drinking places (industry code 7224) and full-service restaurants (industry code 722511) – for 22 jurisdictions in the Washington-Baltimore region in 2012. This data does not include limited service restaurants (like fast food places) that often do not sell alcohol. Data on drinking places for Fauquier and Stafford Counties and the Cities of Fairfax, Falls Church and Fredericksburg is not available because it does not meet the reporting thresholds established by Census.
MoCo is a significant player in the region’s restaurant industry. It has 11% of the region’s bars and restaurants, 10% of sales and 10% of employees. But it also has 13% of the region’s population. MoCo matters because of its sheer size. What happens when the restaurant industry’s statistics are presented on a per capita basis? Using Census population data for the five-year period of 2009-2013, here’s what that looks like.
In terms of establishments per thousand residents, MoCo (at 0.65) is not terribly different from the regional average (0.73). MoCo’s figure is also close to the two jurisdictions which most resemble it in education and income levels, Fairfax (0.66) and Howard (0.61). But on the next two measures, MoCo falls short. MoCo’s restaurant sales per resident ($789) are 20% below the regional average ($989). They are also below Fairfax ($900), Howard ($930) and Loudoun ($826). MoCo’s restaurant employment is just as bad. MoCo’s figure (14.2 restaurant employees per thousand residents) is 23% below the regional average (18.4) and lags most other places in the region, large and small.
Why could this be happening? It’s not because of low income levels – MoCo does just fine on that measure as do many jurisdictions in the region. It’s not because of comparative tax burden. The District of Columbia’s Chief Financial Officer finds that MoCo’s tax burden is not out of line with its neighbors. Do MoCo residents simply not like going out to eat? Are we a county of shut-ins?
Frank Shull, the Chief Operating Officer of RW Restaurant Group, which owns several county restaurants, explained why the industry is lagging when he appeared before the County Council last spring. According to Bethesda Magazine:
A partner in the Robert Wiedmaier Restaurant Group testified Friday that Montgomery County’s Department of Liquor Control (DLC) is “an evil empire to most people in the business.”
In testimony before the County Council’s Ad Hoc Committee on Liquor Control, Frank Shull said poor selection, bad service and high prices keep Washington, D.C., restaurateurs from opening restaurants in the county.
“A majority of good operators in D.C. will not come into the county,” Shull said. “We have this discussion all the time. Restaurants don’t want to because they don’t want to deal with the DLC.”
Jackie Greenbaum, owner of Jackie’s Restaurant and the Quarry House Tavern in Silver Spring, detailed the challenges of dealing with DLC when she signed our petition to End the Monopoly:
I own 2 restaurants in Montgomery County, both well known for the breadth of their beer, wine and liquor lists. The difficulty in creating and maintaining these lists because of the county controlled system is extraordinary. It adds hours of unnecessary labor to my payroll costs, diminishes the quality of my beverage programs through the inconsistency of stock, unavailability of products and errors in delivery, and drives up the cost of the products we sell–which must either be absorbed by us (therefore diminishing our profits) or passed on to the consumer resulting in higher menu prices. This system causes all but the most intrepid restaurant owners to dumb down their offerings because it’s far far easier and ensures Montgomery County will never compete with DC in terms of the quality and creativity of its restaurants.
What would happen if MoCo’s restaurant industry were average in size relative to its population? In other words, how big would the industry be if it had 0.73 establishments per thousand residents, $989 in sales per resident and 18.4 employees per thousand residents, which are the averages for the Washington-Baltimore region? Extrapolating from the data above, the county would have 82 more restaurants, $198 million more in sales and 4,184 more employees. All of this would create more tax revenue for both the county and the state.
How do we get there? Let’s be honest and acknowledge that there could be many factors governing the size of the county’s restaurant industry and DLC is just one of them. But in the opinion of the folks who actually run restaurants, DLC is an important impediment to their doing business. The County Council has proposed reform, but in the opinion of the two largest alcohol distributors in the state, it won’t work and they won’t participate.
Restaurants are not just businesses. They are critical cultural assets. People decide where to live in part because of the abundance and quality of food options. This industry is a large part of our quality of life. By unleashing its spirit of entrepreneurship, we enrich all of society. So how do we do that?
Del. Bill Frick Proposes to Allow Voters to Decide
The movement to end the Montgomery County liquor monopoly is gaining momentum. Six legislators plan to introduce legislation to allow voters to decide the question. Comptroller Franchot penned an opinion piece last week arguing for its end. But I suspect that it’s the political potency of the issue with voters that will give it continued forward momentum.
The following is by Adam Pagnucco:
As of this writing, over 900 people have signed the petition asking Montgomery County’s State Senators and Delegates to end the county’s archaic liquor monopoly. Here are a few comments from petition signers that truly say it all.
First of all, I appreciate Roger Berliner’s and the other County leaders’ embrace of this cause. Montgomery County, Maryland’s liquor laws are an embarrassing and harmful anachronism. County sales of alcohol do not serve any public purpose but they do perpetuate an expensive and useless bureaucracy. The County should not be a seller of alcohol but rather should serve as a responsible regulator of private restaurants and stores selling alcohol.
Retaining the current system discourages the entry of businesses into the County and results in a conflict of interest for the County as both a regulator and a vendor selling to and competing with private businesses. Getting the County out of the liquor business would allow private enterprise to offer consumers more choices and more reasonable prices. At the same time, it would allow the County to focus on its regulatory role, while gaining additional tax revenue from businesses to lower individual taxes.
I have lived in this County for more than sixty years. This useless charade cannot be ended too soon. Kenneth Markison, Chevy Chase, MD
I own 2 restaurants in Montgomery County, both well known for the breadth of their beer, wine and liquor lists. The difficulty in creating and maintaining these lists because of the county controlled system is extraordinary. It adds hours of unnecessary labor to my payroll costs, diminishes the quality of my beverage programs through the inconsistency of stock, unavailability of products and errors in delivery, and drives up the cost of the products we sell – which must either be absorbed by us (therefore diminishing our profits) or passed on to the consumer resulting in higher menu prices. This system causes all but the most intrepid restaurant owners to dumb down their offerings because it’s far far easier and ensures Montgomery County will never compete with DC in terms of the quality and creativity of its restaurants. Jackie Greenbaum, Washington, DC
I’m signing because this is 2015, not 1925. Debra Van Alstyne, Potomac, MD
Ridiculous that this is still in place. Way past time to do away with it. Deborah Grossman, Takoma Park, MD
I’m signing because I’m sick of being forced to drive out of MoCo to get the wines I want. It causes MoCo restaurants time, money, and frustration. It discourages new restaurants from considering moving to MoCo. The current system is cumbersome, useless, embarrassing, archaic, and typically paternalistic. I don’t need this County to make my buying decisions for me, thank you. Lezlie Crosswhite, North Potomac, MD
I’m tired of having to go to DC or VA to have a wide choice of wines plus the prices are so much better. Sandra Satterfield, Rockville, MD
I am an economist, retired from the FTC after over 30 years. I worked exclusively on anti-trust cases. Monopolies hurt consumers. Russ Parker, Bethesda, MD
According to the Maryland Declaration of Rights “monopolies are odious”. If monopolies are so odious then why does Montgomery County have a monopoly on the sale of alcoholic beverages in Montgomery County? Justin McInerny, Chevy Chase, MD
… because the monopoly is outdated, stifling, and ridiculous. And annoying. Diana Conway, Potomac, MD
It has been proven to be a flawed system that restricts the store owner’s ability to maximize sales and be self-reliant on their success. The internal inventory controls have been called into question as of late as well. Time to open it up to the free market! John Hodges, Rockville, MD
I am tired of County stores with poor quality and customer service. I have to shop with a cart that has a pole on it so I can be tracked through the store, then I have to stand behind a piece of blue tape on the floor to be helped by someone who doesn’t want to be there. The selection is poor and I find myself shopping elsewhere. It’s time to get rid of soviet era liquor stores. Richard Neimand, Silver Spring, MD
We’re tired of driving to Total Wine in Laurel and Calvert-Woodley in D.C. to find good selections of beer and wine at reasonable prices. We want to spend our money here, but not at the premium we have to pay because of this ridiculous set up. Also, we want to see more restaurants locate here and they need access to good selections of fine wines, craft liquors, etc. Mike Diegel, Silver Spring, MD
This system no longer (if it ever did) makes sense. Michael Webb, Germantown, MD
It is time for the free market to work its magic and for the county to cure its addiction to alcohol (revenues). A remarkably inefficient, and at times corrupt, system should not be tolerated by consumers and businesses directly affected by its protection. Let voters decide what happens. Allen Perper, Silver Spring, MD
I spend money out of county in an effort to avoid the ridiculous monopoly in Montgomery County. It is insulting to my intelligence. Stephen Sugg, Rockville, MD
Business is for the private sector, governing is for the government.| Yovav Sever, Rockville, MD
I buy much of my alcohol outside MoCo. I want a wider selection and to not have to drive! Laurie Wilner, Potomac, MD
The county should NOT be selling alcohol at all! I always thought that was stupid. The county has anti-drink programs and yet sells the stuff…let’s teach our kids hypocrisy, shall we? Pat Burton, Gaithersburg, MD
I’m signing because I do purchase all of my beer and wine in Washington, D.C. Michael Reust, Takoma Park, MD
I live in MoCo and have to go to Frederick County (or Virginia) to get a couple of things that the county won’t allow to be sold. The current system is a total joke. Victoria Cross, Gaithersburg, MD
I’m signing because I resent the county’s imposing a monopoly on its citizens. We’re grownups. Let us decide who to buy our alcohol from, and what to buy. I love Mo Co except this liquor business is an embarrassment. David Austin, Bethesda, MD
I don’t believe the county should have a monopoly on the liquor we buy or the choices restaurants have in what they provide customers. Currently, and for MANY years, I’ve purchased all my liquor in DC. Too bad for Maryland and time to smarten up. Anne Claysmith, Bethesda, MD
I hate having to drive to neighboring counties to find liquor stores with a decent variety to choose from. Mark Eakin, Silver Spring, MD
I worked at a bar in Silver Spring for 4 years, and during that time we were frequently unable to keep regular beers, liquors, and supplies we relied on in stock due to the County’s apathy towards customer interests Jennifer Burrell, Laurel, MD
The county should not be allowed to continue its monopoly on alcohol sales to our businesses. I fully support allowing private sellers to compete with DLC in Montgomery County and putting this issue to a referendum so that it is clear how many county citizens desire a private competition approach. Michael Fetchko, Bethesda, MD