StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions
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DA TELINE Worcester County Department of Liquor Control [Because of press deadlines, we were unable to include comments from Worcester County, MD, in our Control States Executive Forum, published in our September/October issue. Here they are.] By Robert Cowger, Jr., Department Head B eginning July 1, 2011, oversight for the sale and distribution of liquor in Worcester County was transferred from the autonomous Liquor Control Board (LCB) to Worcester County Government under the auspices of the Department of Liquor Control (DLC). This change was initiated following a seven-month inquiry conducted by Maryland State Comptroller Peter Franchot, in which law enforcement agents compiled sig- nificant evidence of price discrimina- tion, below cost sales, illegal purchas- ing, and the illegal provision of items of value to some retailers. While the LCB was never charged with criminal wrong- doing, the Worcester County Alliance for Fair Markets, a not-for-profit corporation formed by 182 alcoholic beverage retailers in Worcester County supported House Bill 267/Senate Bill 906. This legislation abolished the LCB and replaced it with the Worcester County DLC. A sunset provision was included in the bill that will allow interested licensees to purchase products direct from whole- salers beginning in 2016. However, the DLC will continue to provide services to the mom and pop stores that cannot afford to buy in bulk and will ben- efit from these services. the preservation of as many local jobs as possible, guar- antees service to small businesses, as well as the large establishments, and preserves liquor revenues to the county and towns that are critical in these uncertain eco- nomic times. The DLC manages six retail dispensaries located in Ocean City (2 locations), West Ocean City, Berlin, Snow Hill and Pocomoke; and acts as a monopoly regarding the sale of liquor (distilled spirits) to any liquor license holder in Worcester County. Robert L. Cowger, Jr. Since news of the anticipated County takeover of liquor distribution became public, the LCB distribution to our County increased by $81,375. And following the takeover, the retail and wholesale vol- umes have remained consistent, with file offs and discounts passed through to licensees. The DLC anticipates fixed operating costs of roughly $2.95 million in FY12, including depreciation and interest, and we anticipate the annual distribution of liquor profits to be $250,000 to County and $250,000 to the four municipalities therein. In early 2011, prior to the transfer of A healthy restaurant and bar business contributes significantly to the overall economic fortunes of the county. We anticipate that approximately 50% of the licensees in Worcester County would benefit from the ability to make independent wholesale purchases, while the remaining 50% would benefit from making smaller purchases directly from the DLC. Worcester County is one of only four jurisdictions in Maryland (Montgomery, Somerset, Wicomico and Worcester Counties) that requires licensees to purchase alcohol from the DLC. County oversight of wholesale and retail liquor operations achieves three significant purposes. It ensures 10 responsibility for liquor sales, the Worcester County Commissioners hired Robert L. Cowger, Jr. as a consult- ant and appointed a management team to help assure a smooth transition from the independent LCB to the County owned services that exist today. Mr. Cowger's input proved to be invaluable during that period, and shortly thereafter he was invited to spearhead the new department. Mr. Cowger has experience both as the former Director of the Worcester County Liquor Control Board (LCB) from 2001 through 2005 and an independent Liquor Consultant for Worcester County. While the Commissioners harbor no desire to be involved in the liquor business or to compete with pri- vate industry, we took on this responsibility to protect jobs, maintain revenues, assure retail and wholesale cus- tomers are treated fairly and offer a wide range of prod- ucts at reasonable prices, while maintaining transparen- cy, accountability and compliance with federal, state and local regulatory requirements. Though our county is likely to make some mistakes, as we move forward in this new endeavor, our ultimate goal is to improve LCD operations and relations with the licensees, thus moving to assure sustainability. StateWays www.stateways.com November/December 2011