Proponents of reforming Maryland’s beverage alcohol laws are optimistic that next year the Free State will join the majority of the country in granting grocery stores and chain stores the freedom to sell beer, wine and maybe even liquor.
Forty-seven states and D.C. allow grocery stores to sell beer, and 40 and D.C. allow them to sell wine, according to the Maryland Retailers Association. Maryland’s alcohol distribution is governed by a 1978 law that explicitly denies alcohol licenses to chain and discount stores, poorly defined, and limits licenses to Maryland residents, who can only hold one license. Some stores were grandfathered in the 1978 law, which is why the Giant grocery in White Oak, in Montgomery County, sells beer and wine but other Giant outlets don’t. And Maryland gives considerable leeway to counties and cities in regulating alcohol sales, so you will see a few stores with the same or similar names, but you won’t see that they have different family members listed on the licenses.
It’s a messy hodgepodge that does not serve Maryland consumers well. The law was designed to protect the mom-and-pop beer and wine shops that dominate the retail landscape but are beholden to large wholesalers in the national three-tier system established after the repeal of Prohibition. A smattering of independent, quality-minded retailers have chipped away at the margins, especially in cities such as Annapolis, Baltimore and Frederick — and, more recently in Montgomery County. But Marylanders lag behind the rest of the country in their freedom to purchase beverage alcohol.
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“Ninety-eight percent of Americans can go to a grocery store and buy beer. Eighty-five percent can buy wine,” says Adam Borden, of Marylanders for Better Beer and Wine Laws, which has been advocating for chain store sales since 2012. MBBWL helped change the state’s laws a few years ago to allow Maryland residents to purchase wine directly from wineries. The group released a new survey in July that said 67 percent of Maryland consumers favored allowing chain stores to sell alcoholic beverages.
“We’re one of the last states left restricting the free market for alcohol sales,” says Cailey Locklair, president of the Maryland Retailers Association, the Maryland Association of Chain Drug Stores, the Tri-State Jewelers Association and the Maryland Food Industry Council. “I can’t think of any other retail sector where we allow fiefdoms to control the market and we protect them. Do we or do we not want a free market? Consumers do.”
Borden and Locklair cite similar reasons for hope that the legislature in Annapolis, which has staunchly resisted change, might be receptive to their pleas in the 2021 session. About a third of legislators are new after the 2018 elections, and the leadership of both houses has changed.
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And last year, the U.S. Supreme Court struck down a Tennessee law with a key provision similar to Maryland’s, ruling that a state residency requirement to hold an alcohol license violated the Constitution’s Commerce Clause. That lawsuit was brought by Total Wine & More, the Bethesda, Md. -based chain with more than 100 stores nationwide. (Total has two stores in Maryland, with different individuals on the licenses.)
The Maryland Retailers Association has launched a new website, mdalcoholchoice.com, to educate consumers and help them contact their legislators in Annapolis. Locklair said the group will soon release a survey showing widespread support and a projection of how much the state could earn from the sale of alcohol licenses.
Share this articleShareBorden estimated that the state would gain a windfall of about $200 million dollars from the initial sale of licenses and $50 million to $70 million a year after that. Fees could be tiered, with convenience stores paying $35,000 for a license, a drugstore such as CVS or Walgreens $50,000, grocery stores $250,000 and club stores such as Costco or Sam’s Club $500,000, he said.
“We track about 2,000 stores in the state, and we estimate about two-thirds would apply for a license in the first year,” Borden said, citing the experience of Tennessee and Colorado, which liberalized their licensing laws in recent years. The record from those states also demonstrates that the beer and wine stores protected by the current law would likely not suffer or go out of business, he said.
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Change will not come easy. The Wine and Spirits Wholesalers of America, a national lobbying group, has not taken a stance on the issue in Maryland, but the state’s wholesalers would seem to have an interest in the status quo. They would have to sell to many more retailers and face the price pressure from the buying power of large stores such as Costco.
Perhaps more tellingly, the Maryland Retailers Association and MBBWL are not working together, despite seeking the same goal and using nearly identical arguments. Borden and Locklair would not tell me why, but it is apparent there is distrust between the two groups.
And the difficult multiyear effort to change the direct shipping laws demonstrated how difficult it is to move Annapolis on issues involving the sale and distribution of alcohol. Tom Wark, head of the National Association of Wine Retailers, a group that lobbies for freedom of interstate shipping, said his group would sit out this fight. But he added a caution.
“Where alcohol is concerned, your state politicians are corrupt,” he said.
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