Business Notes: State Alcohol Industry Reps Strongly Oppose Proposal to Sell Beer and Wine at Wheaton Costco
Plus: Rockville exercise startup nets investment from billionaire Mark Cuban on Shark Tank
Strong opposition greets proposed bill to allow bulk beer and wine sales at Wheaton Costco
Del. Ben Kramer finishes speaking to a panel opposing a bill that would allow the Wheaton Costco to sell bulk amounts of beer and wine. Screenshot via Maryland House website.
By the end of a public hearing in Annapolis Monday afternoon, audience and panel members were laughing as state legislators, including Montgomery County Del. Ben Kramer (D-Wheaton), and alcohol industry representatives assailed a bill proposed by Del. Al Carr (D-Kensington) that would allow bulk amounts of beer and wine to be sold at a local warehouse store.
The exchange, which was streamed on the General Assembly’s website, showed how embedded small businesses are in the alcohol economy in Maryland and how the industry is committed to protecting the state’s prohibition on providing alcohol licenses to chain stores, which has been in effect for more than four decades.
Carr attempted to make a case for the bill by saying it would help recapture alcohol sales—and the taxes that come with them—from the Costco just across the Maryland border in Washington, D.C. The bill is tailored to allow only the Costco store at Westfield Wheaton mall to sell bulk amounts of wine and beer.
However, lobbyists including Steve Wise, who represents the Maryland State Licensed Beverage Association, and distributors such as Betty Buck, a past chairman of the National Beer Wholesalers Association, testified against the legislation, saying it would irreparably damage the hundreds of small businesses that sell alcohol in the state.
“Don’t open the door for one store in Montgomery County, because you’re going to be doing it for all your counties,” Wise told the legislators.
Also on hand was Kirti Patel, who owns Choice Wine & Beer next to the Wheaton Costco. Patel, who described himself as “just a little guy,” said allowing Costco to sell bulk beer and wine would put him out of business. He said he poured all of his family’s money into the store in 2013 and losing it would mean he couldn’t put his children through college or support his mother.
“I would not have any chance but to go bankrupt,” Patel said.
Kramer, who is a member of the House Economic Matters Committee that is reviewing the legislation, gave a lengthy speech about how the bill would decimate small business owners and force them to leave their communities as big box stores slashed away at their sales.
“I can guarantee within a year you wouldn’t see a single one of them,” Kramer said. “The perfect example of that, there was a time in Wheaton, in the Central Business District, there were four hardware stores, mom and pop. When Home Depot opened in Aspen Hill two miles up the road, within a five-year period all four of those hardware stores went out of business, so wouldn’t you agree?”
Kramer’s last second framing of the comment into the form of a question caused members of the panel opposing the bill to start laughing. Buck responded that she agreed 100 percent.
Rockville exercise startup receives investment from Mark Cuban on Shark Tank
Nexercise Inc. struck it big on ABC’s Shark Tank last week, securing a $1.5 million investment from billionaire Mark Cuban, owner of the Dallas Mavericks, in a deal the Rockville company said was the largest tech deal in the show’s history. In exchange for the funds, Nexercise gave Cuban 10 percent of the business and $1.5 million worth of unsold ad inventory, Washington Business Journal reported.
The Rockville-based tech company earns most of its revenue from a video-based exercise instruction app called Sworkit, which makes money through advertising as well as subscriptions. The company appeared on the show to secure financing to turn their popular app into a well-known brand. Shark Tank features budding entrepreneurs pitching products to established businesspeople, the “sharks,” in the hope of landing an investment.