Delegate Proposes Bill To Allow County to Sell Alcohol in Grocery Stores

Local store owner says move may put small beer and wine stores out of business


Published:

Del. Eric Luedtke

Maryland General Assembly website

Del. Eric Luedtke announced Monday he’s planning to introduce a bill in the General Assembly next year to allow county-run alcohol stores to operate inside grocery stores in Montgomery County.

He’s also planning to introduce a second bill that would let county-run stores sell cold beer, wine, soft drinks and growlers—something the 27 stores operated by the Department of Liquor Control (DLC) are currently not permitted to do.

Luedtke (D-Burtonsville) said in an interview Monday he’s recommending the change in state law to give consumers in the county more options to buy alcohol. The current state law generally prohibits alcohol sales at grocery stores in Maryland, with a few exceptions.

“The biggest complaint I hear from constituents is they want to buy beer and wine at a grocery store,” Luedtke said.

Luedtke intends to introduce the proposals as local bills, meaning they only would apply to Montgomery County. In order for them to move forward, a majority of the county’s state legislative delegation would have to support it.

State residents for years have expressed dissatisfaction with the law that prevents grocery stores from being able to sell alcohol, but small privately owned alcohol stores, primarily through their trade association, the Maryland State Licensed Beverage Association, have lobbied state lawmakers to prevent any changes. The store owners have fought to protect the law due to fears that alcohol sales at grocery stores would hurt their businesses.

In Montgomery County, the DLC controls the wholesale distribution of alcohol and the retail sale of liquor.

Hard alcohols such as vodka, whiskey and rum are only sold in a retail setting at the county’s 27 stores. Those stores, however, don’t offer cold beer or chilled wine. DLC officials have said that arrangement is in place to help private beer and wine stores compete with county stores.

In return, the county benefits through its wholesale arrangement with the privately owned stores—the county sells them all of the alcohol at markup, then the privately owned stores sell the beer and wine to customers. Through the retail and wholesale arrangement, the DLC nets about $30 million in profit each year that is used to pay off infrastructure bonds and is transferred to the county’s general fund.

Justin McInerny, the operator of Capital Beer & Wine in Bethesda and the county’s representative in the Maryland State Licensed Beverage Association, said Luedtke never consulted with local store owners before publicizing the bills Monday.

“This is a major concern,” McInerny said Monday when hearing about the bills from Bethesda Beat. “I’m disappointed they’re trying to do something like this without consulting with the people whose livelihoods are on the line.”

He said many families started their local alcohol stores with the assumption that state law would remain consistent. He said the true intention of the legislation is to increase the county’s revenue stream.

“If this were to happen, it’s a safe assumption that you’re going to push a lot of middle-class business owners into bankruptcy and foreclosure,” McInerny said.

He added that the licensed beverage association likely will fight the legislation in Annapolis, if it moves forward.

A bill Luedtke dubbed the “Montgomery County Alcohol Modernization Act of 2018” would allow cold beer and wine sales at county liquor stores and repeal restrictions he described as dated. Those include striking a provision that prevented a bowling alley, billiard hall or pharmacy from obtaining a Class B beer license and changing state law to enable alcohol store employees 18 and older to deliver alcohol off-site on their own. Currently employees that are between the ages of 18 and 21 must be accompanied by supervisor who is at least 21 to deliver alcohol.

The grocery store bill would allow a separate, county-run alcohol store to open inside a grocery store that’s at least 10,000 square feet. Luedtke described the proposal as a “store-within-a-store model.”

He defended the bills against potential criticism from privately owned stores by saying he believes they can compete with county-run stores by offering good customer service and a broad selection of products.

“There are counties where grocery store sales are completely legal and local mom-and-pop stores still exist,” Luedtke said. “The argument that every beer and wine store is going to be put out of business is untrue.”

He said he might be open to altering the grocery store bill to allow privately owned stores to open their own stores within a grocery store, rather than only allowing county stores to open.

McInerny said Luedtke was being “intellectually dishonest” by calling one of the bills an “alcohol modernization act.”

“How is it modern for a government to put in a government-operated alcohol store in a grocery store?” McInerny asked.

He suggested that if Montgomery County really wanted to modernize its alcohol laws, it would remove the government’s monopoly over alcohol distribution and retail liquor sales and enable private distributors to sell directly to privately owned alcohol stores.

The Montgomery County delegation will hold public hearings on the bills in December, according to Luedtke.

Earlier this year, the General Assembly approved legislation to allow the county to license privately-owned beer and wine stores to sell liquor, a so-called "agency store model," although the county has yet to license any privately-owned stores.

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