{"id":10840,"date":"2018-06-14T07:00:59","date_gmt":"2018-06-14T11:00:59","guid":{"rendered":"https:\/\/www.theseventhstate.com\/?p=10840"},"modified":"2018-06-12T17:09:57","modified_gmt":"2018-06-12T21:09:57","slug":"is-the-liquor-monopoly-improving","status":"publish","type":"post","link":"https:\/\/www.theseventhstate.com\/?p=10840","title":{"rendered":"Is the Liquor Monopoly Improving?"},"content":{"rendered":"

By Adam Pagnucco.<\/em><\/p>\n

Once again, Montgomery County\u2019s liquor monopoly is a hot issue in local politics.\u00a0 As far as we know, MoCo is the only county in the nation in which the county government has a monopoly on the distribution of beer, wine and spirits and also a monopoly on retail sales of spirits.\u00a0 Candidates for office disagree on<\/a> whether it is needed<\/a>.\u00a0 In a response to David Lublin\u2019s recent post on the subject<\/a>, Department of Liquor Control (DLC) Director Bob Dorfman claims it has improved<\/a>.<\/p>\n

Has it?<\/p>\n

We will give the monopoly credit for one thing: it did not see system-wide distribution failures in the critical week between Christmas and New Year\u2019s last year as it did in 2015<\/a> and 2016<\/a>.\u00a0 That has not stopped two anti-monopoly groups from forming in the last few months, one representing licensees<\/a> and another representing consumers<\/a>.\u00a0 But what\u2019s really going on?\u00a0 Let\u2019s look at the data.<\/p>\n

According to Gallup<\/a> and the U.S. Department of Health and Human Services<\/a>, alcohol consumption tends to be correlated with education and income.\u00a0 That makes sense \u2013 people with college and graduate degrees tend to make more money, and people with more disposable income have more money available for alcohol purchases.\u00a0 MoCo has lots of highly educated and wealthy people so we should be one of the leaders in alcohol spending in Maryland.<\/p>\n

The Comptroller of Maryland, who collects alcohol taxes, posts annual reports<\/a> of alcohol sales per capita for each of Maryland\u2019s twenty-four jurisdictions on his website.\u00a0 We collected the last ten fiscal years of that data and present it below.\u00a0 Let\u2019s remember when recent changes at the DLC occurred.\u00a0 After many revelations of bad performance in 2014, DLC launched an \u201cAction Plan\u201d<\/a> to improve performance in June 2015.\u00a0 George Griffin, the former DLC Director who was blamed for the first New Year\u2019s Eve meltdown, left in January 2016<\/a>, about halfway through Fiscal Year 2016 (which ended on June 30).\u00a0 Bob Dorfman, the new DLC Director, started in December 2016<\/a>, about halfway through Fiscal Year 2017.\u00a0 If these events were associated with genuine operational improvements, we would expect to see significant increases in both per capita sales and rank among jurisdictions over the last three years.<\/p>\n

That has not happened.<\/p>\n

Below is data on per capita sales of spirits, wine and beer in Montgomery County over the last ten fiscal years.<\/p>\n

\"\"<\/a><\/p>\n

Spirits sales per capita have increased over the last decade, although they have barely changed since 2013.\u00a0 Wine is stagnant.\u00a0 Both wine and spirits fell in FY17, the first year of the new Director.\u00a0 Beer sales per capita are down over the last decade and rose slightly in FY17.\u00a0 But here\u2019s the thing: MoCo\u2019s new craft breweries are exempted from the liquor monopoly<\/a> and, as a result, are doing really well.\u00a0 The tiny gain in beer could be due to FREEDOM from the monopoly, not better operations at the monopoly.<\/p>\n

Now let\u2019s compare MoCo\u2019s rank in per capita sales to the 23 other local jurisdictions in Maryland.<\/p>\n

\"\"<\/a><\/p>\n

Because of its education and wealth, MoCo should be one of the leading counties in per capita alcohol sales.\u00a0 It\u2019s not.\u00a0 In terms of spirits, the only county that\u2019s worse is Somerset, which perhaps not coincidentally has its own monopoly on spirits sales<\/a>.\u00a0 In terms of beer, MoCo is dead last.\u00a0 In terms of wine, MoCo has slid from ninth in the state to fourteenth, moving down a spot in FY17.\u00a0 Jurisdictions in which residents bought more wine per capita than MoCo in FY17<\/a> included Anne Arundel, Baltimore City, Baltimore County, Calvert, Carroll, Cecil, Frederick, Garrett, Harford, Howard, Kent, Talbot and Worcester.\u00a0 Does anyone believe that residents of counties with two-thirds of MoCo\u2019s household income<\/a> (or less) drink more wine than we do?<\/p>\n

What\u2019s happening is that consumers leave the county to buy alcohol.\u00a0 That\u2019s why numerous D.C. liquor stores are located within blocks of the MoCo border<\/a>.\u00a0 That\u2019s why a fifth to a quarter of customers at Total Wine stores in McLean and Laurel come from MoCo<\/a>. \u00a0The state\u2019s Bureau of Revenue Estimates found that if MoCo customers were to return to the county to shop for alcohol in the absence of the liquor monopoly, the county would see a surge of almost $200 million in new economic activity,<\/a>\u00a0enabling a path forward for the county to replace every cent of lost revenue<\/a>.<\/p>\n

Dorfman is a better manager than his predecessor and we believe he is genuinely trying to improve DLC.\u00a0 But Dorfman won\u2019t be there forever and DLC has a long history<\/a> of problems<\/a>.\u00a0 The monopoly also has a long history of promising improvement<\/a>, mostly resulting in fleeting or ineffective fixes with quick relapses.\u00a0 Even modest liberalization passed by the General Assembly to allow some private retail sales of spirits has been blocked<\/a>.\u00a0 What the above data on per capita alcohol sales shows is that, despite claims to the contrary, not much has changed.\u00a0 And unless MoCo starts behaving like a normal county and allows private sector competition, true change may never come.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Adam Pagnucco. Once again, Montgomery County\u2019s liquor monopoly is a hot issue in local politics.\u00a0 As far as we know, MoCo is the only county in the nation in which the county government has a monopoly on the distribution of beer, wine and spirits and also a monopoly on retail sales of spirits.\u00a0 Candidates … Continue reading Is the Liquor Monopoly Improving?<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[151,119,1449],"tags":[1545,1445,1439,1779,1724],"class_list":["post-10840","post","type-post","status-publish","format-standard","hentry","category-adam-pagnucco","category-alcohol","category-department-of-liquor-control","tag-adam-pagnucco","tag-alcohol","tag-department-of-liquor-control","tag-liquor-control","tag-liquor-monopoly"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p4mKJE-2OQ","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/10840","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10840"}],"version-history":[{"count":6,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/10840\/revisions"}],"predecessor-version":[{"id":10844,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/10840\/revisions\/10844"}],"wp:attachment":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10840"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10840"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10840"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}