The kerfuffle over the proposed wine store in Wegmans' newest location in Columbia heralds the next looming battle in consumers' fight to modernize Maryland's alcohol policy. The recent Howard County liquor board hearing demonstrated the intensity of both sides' arguments. The local retailers, backed by the alcohol distributors, fear increased competition — while consumer groups clamor for greater convenience and selection, and lower prices.
The alcohol industry in Maryland has traditionally dictated its own regulations. Two companies distribute 90 percent of the wine and spirits sold in Maryland, according to industry testimony before the General Assembly last year. These distributors work very closely with packaged goods stores to maintain the status quo because it is in their best interests. The distributors oppose allowing grocery or chain stores to sell alcohol — even though they would actually sell more by volume — because of their fear of the chains' purchasing power. Under the current system, with only one liquor license allowed per Maryland applicant, the distributors have little to fear from one problematic account. Were the state to allow Giant to sell beer and wine in all 98 of its Maryland stores, however, Giant would have significant say in when, what and how much it was willing to buy.
The enactment of direct wine shipping legislation in 2011, followed this year by the legalization of corkage, has been the dawn of Maryland consumers' understanding that the state actually determines what we drink and how much we pay for it. Most consumers want the convenience of purchasing groceries and a bottle of wine or craft beer in the same location — a right enjoyed by millions of Americans in most other states. In fact, there are already a number of chain store licenses issued within Maryland and even entire jurisdictions on the Eastern Shore that permit chain store sales. It's no wonder Marylanders are confused as a result of this county-by-county inconsistency. The root cause of this patchwork approach is the authority granted the liquor boards in the state's 24 political jurisdictions.
During the most recent General Assembly session, the Prince George's County delegation considered a bill that would have allowed a chain store liquor license in a Bowie mall that had seen better days. The legislation ultimately died because so many others wanted chain store sales and tried to pile onto the original bill.
The Food Marketing Institute, the national trade association for food retailers and wholesalers, came out with a report at the end of last year entitled "FMI WINE STUDY: The Economic Impact of Allowing Shoppers to Purchase Wine in Food Stores." The study made some interesting findings:
•Open states that allow widespread supermarket sales have about four times as many retail wine outlets per average adult population as closed states.
•Legalizing chain store wine sales nationwide is projected to increase federal and state taxes collected by more than $5 billion and increase employment by 168,000, resulting in a total economic impact of $14.3 billion.
•Package goods stores remain relatively unaffected, continuing to maintain healthy counts in states where wine chain store sales are legal. Allowing sales at chain stores has only marginal impact on existing stores.
The report notes that "[w]hile adapting to a changing economic environment is often difficult, states that have made the change have found their fears preceding the change were unjustified."
The current system, set up in 1933, has started to show its age. Maryland consumers want to be able to visit wineries and have wine shipped to their doors. They want to be able to take a bottle of wine for a special occasion to a restaurant and enjoy it with a meal. And they want to be able to do one-stop shopping at a grocery store. Maryland consumers have won the first two of those battles. It remains to be seen whether our legislators have the political will to advocate on behalf of consumers and win this one as well.
Adam Borden is the president of Marylanders for Better Beer & Wine Laws. His email is email@example.com.