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Is Ike Leggett Blinking on the County’s Liquor Monopoly? Tells Business Leaders He’ll Negotiate Ending It

Posted: February 7, 2016 at 9:41 pm   /   by   /   comments (0)

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By Mark Uncapher

County Executive Ike Leggett in recent days has made two significant changes, suggesting he is shifting his position on the county’s liquor monopoly.

As of the end of January, the county announced that George Griffin is no longer the director of Department of Liquor Control (DLC).  When asked if Griffin’s departure had to do with the problems at the department that have been detailed during County Council committee meetings and news reports over the past year, the county’s chief administrative officer did not bother to try to sugarcoat the change: “It is what it is.”

Over the holiday season, the DLC provided a compelling demonstration of why the county government‘s liquor monopoly should be ended.  The county agency acknowledged a delivery system breakdown “due to human error,” resulting in many customers not having their orders filled.  The failure left many of the DLC’s harshest critics fuming because of missed deliveries and specialty items ordered for holiday events unavailable for customers.

The very same day that Griffin’s departure was announced, County Executive Leggett wrote the presidents of four local Chambers of Commerce, saying that while he would not support any move to end the DLC’s current monopoly structure in this year’s General Assembly, he was willing to work with state legislators and the business community to come up with a unified proposal for next year.

“When I met with you and the BCC Chamber members on January 20, 2016, I was quite clear that I have no philosophical objection to privatization,” Leggett wrote. “However, I was also clear that privatization could not be accomplished within the current legislative session, and that I would support an expedited Task Force to develop options for privatization and proposals for possible legislation prior to the 2017 General Assembly session.”

“This is too important, in my opinion, to leave to chance,” Leggett said. “I have no problem with privatization per se, but we need to make sure the county’s residents and taxpayers are protected on the financial issue.”

Leggett had previously vocally defended the county government liquor monopoly because of the potential loss of up to $35 million in liquor profits going to county coffers.   However Leggett’s claims had been undercut by a report of the county’s own Office of Legislative Oversight.  According to their analysis, if DLC retained its retail stores, but not its wholesale monopoly, it would still generate $10 million annually in retail store profits alone.  Under another scenario, a 1-cent per ounce excise tax on alcohol would further close the revenue gap of $30 million a year.

Over the holidays, at the very same it was failing its wholesale customers, the county government liquor monopoly produced and distributed flyers to its retail customers defending the current system as a way of raising revenue funding county programs that “stays in the county working for us, not in the pockets of out-of-state liquor interests.”  County Executive Ike Leggett‘s spokesman defended the 10,000 flyers at the time as only costing “a few thousand dollars,” and as “helping people to understand the benefits of the county’s control of liquor distribution.”

The flyers were the latest salvo in Leggett’s campaign against legislation sponsored by State Delegate Bill Frick (D-16) that would authorize a referendum in 2016, letting voters decide whether to allow alcohol establishments to buy directly from private distributors.  Frick’s proposal would not require the county to exit the alcohol business altogether, allowing it to continue to distribute alcohol to licensees and operate its 25 retail stores.  However, the DLC would have to compete, with privately-owned beer and wine stores and restaurants free to purchase from private distributors if they chose to.

In December 2015, the Montgomery County Republican Central Committee came out in support of the referendum proposal.  In announcing the party position, Republican Chairman Michael Higgs put it succinctly: “It is time for Montgomery County voters to decide whether to free our restaurants and catering industry from having to purchase liquor only from a government bureaucracy. Let’s join the rest of the country and allow private distributors.”

And in 2014, Republican County Executive Candidate Jim Shalleck had made ending the monopoly a center piece of his campaign.