County’s liquor licensee prices competitive

County’s liquor licensee prices competitive

(May 2, 2014) When an Ocean City bar received its delivery of 107 bottles of spirits Tuesday from the Worcester County Department of Liquor Control, its tab was $2,025.08. If the owner had bought the liquor from wholesalers, the tab would have been $2,073.85.

“So it’s beneficial for them to continue to do business with the county,” said Robert “Bobby” Cowger, executive director of the Department of Liquor Control, last Friday.

The perception of some people is that the county’s prices are 20 percent to 25 percent higher than the wholesalers’ prices, but that is simply untrue, Cowger said. In addition, this particular bar owner would have had to get four deliveries from wholesalers for the 107 bottles of liquor, but the county took care of it all with just one delivery.

Starting July 1, licensees may purchase wine or liquor from wholesalers or continue to purchase it from the Department of Liquor Control or they may purchase wine and liquor from both.

County ownership of the former Liquor Control Board went into effect July 1, 2011. Many licensees who were members of the Worcester County Licensed Beverage Association pushed for the end of the Liquor Control Board because they were dissatisfied, primarily with its pricing, which they believed was too high.

In most Maryland counties, liquor licensees purchase liquor from wholesalers that buy it from manufacturers. In Worcester County, however, retailers had to purchase liquor from the Liquor Control Board.

At the urging of the Worcester County Licensed Beverage Association, Delegates Mike McDermott and Norman Conway and Sen. Jim Mathias introduced bills to terminate the Liquor Control Board. The General Assembly passed the bill, paving the way for the county to take over its operations and to create the new county Department of Liquor Control.

Retailers still buy liquor exclusively from the Department of Liquor Control, but the legislation included a sunset clause enabling retailers to buy directly from wholesalers.

As written in that original legislation, the change was slated to start May 1, 2016, but the date was changed to July 1, 2014. Beginning on that day, licensees may purchase wine or liquor from wholesalers or from the Department of Liquor Control or they may purchase wine and liquor from both.

Licensees are required by law to provide written notice of their intent to the Department of Liquor Control at least 60 days before their purchasing activity is to start. The department then issues a letter of confirmation that the licensee meets certain requirements and the licensee must display that letter, along with their alcoholic beverage license, on the licensed premises.

One of those written notices of intent to purchase liquor from both the Department of Liquor Control and wholesalers came from Charlene Carr of The Purple Moose, one of the primary proponents of the change in the law.

Cowger responded, after consultation with the Worcester County Commissioners, by sending a letter stating that the board elected not to service that account any longer.

“I’m just giving her what she asked for,” Cowger said Tuesday. “I’m giving her exactly what she wanted. She had said for years that she wanted to get rid of us. So all I did was give her what she asked for.”

Carr was the only person to get such a letter, Cowger said.

As of last Friday, the department had received written notice from approximately 90 licensees. Since the annual Ocean City Hotel-Motel-Restaurant Association Trade Expo in March, Cowger has met with approximately 136 of 200 licensees to discuss the county’s new position in competing with wholesalers after July 1.

The business owners must now subscribe to the Maryland Beverage Journal and so they must learn where the products come from, which takes a considerable amount of time, Cowger said.

To make purchasing easier, he and his staff compiled a wholesale price list, which they broke down by categories. The data shows that the county’s volume discounts available to purchasers are competitive with wholesalers. Additionally, the county’s prices are good through September, but wholesalers can change price monthly.

Approximately 80 percent of products being sold to licensees were purchased at a quantity discount, which enables the county to stay competitive with wholesalers.

The county is able to have lower prices, Cowger said, “because the county commissioners are really committed to this department so they provided us with funding to buy the inventor in large quantities. That enables us to be competitive with wholesale pricing.”

The county also has no minimum number of items needed to make a delivery, not does it have an “upcharge” for selling less than a case of bottles. On-line ordering makes the buying easy.

Cowger expects the department to do about $1.8 million in business from its Northern Worcester Shore Spirits retail store and wholesale outlet on Route 50 east of Stephen Decatur High School. Licensees may also purchase wine and liquor wholesale from the department’s new store on 16th Street and Philadelphia Avenue. The newly renovated 3,000-square-foot retail liquor store includes a generous selection of local and other wines. Adjoining the new retail store is the new 1,500-square-foot wholesale operations center, which makes it easy for Ocean City licensees to make liquor purchases.

“This enables licensees in the Ocean City area to be able to pick up product seven days a week. So far, bars are really pleased with it,” Cowger said.

Cowger believes the Department of Liquor Control has the best business relationship with the licensees since the repeal of Prohibition in 1933.

“Since the county takeover of the Department of Liquor Control in 2011, the department has worked effectively to improve the relationships and customer service to the point it ‘s unmatchable by the open market wholesalers,” Cowger said. “We have strived to make the licensees’ pricing and service our No.1 priority. The Department of Liquor Control is still and will always be the only one-stop opportunity for the licensees’ product needs

1 Comment on this Post

  1. Mr Doubtful

    With all of this great pricing that is being offered to the retailers how can the County produce any profit given the fact that they stil have too high of a payroll & continue to increase Capital Expenses with ALL of the location changes? Will us Taxpayers EVER see any benefit? Where is the money going?

    Mr Doubtful, Bishopville

    Reply

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