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Probably the most egregious government encroachment on America's drinking habits is the controlled state. In 18 states, plus Montgomery County, Md., sales of wine and spirits are controlled by a state-run monopoly. The largest of these states is Pennsylvania. Over the years Pennsylvania governors have sworn to rid the state of this uncompetitive relic. None have been able to overcome the unions of the Pennsylvania Liquor Control Board's employees.
The new law retains Montgomery's quirky status as the nation's only county that owns and operates its own liquor stores, but it limits some aspects of the local government's monopoly. The new law prohibits county-owned liquor stores from selling nonalcoholic beverages, mixers, soft drinks or foods.
The Montgomery County Department of Liquor Control functions as a department of the County government and exercises monopoly control over the sale and distribution of alcoholic beverages in the County. In this sense it shares the rights and privileges the "control" states, having been granted the authority to purchase all wines and liquors directly from the manufacturers by the Maryland Courts in 1955. The Liquor Control Board was established in December 1933, following the end of nationwide Prohibition and a fifty-three year period of prohibition in the County.
Montgomery is the only county in the nation that retains a monopoly on sales of wine to restaurants and liquor stores. Civil servants are in charge. The county charges a 35-percent markup, which means that prices that Montgomery restaurants pay for wine may be higher than the retail price in DC. It is illegal for restaurants to purchase wine from anyone other than the county, so not only are the wines more expensive, but restaurants cannot purchase good wines or allow customers to bring in their own wine. All this expensive and often poor-quality wine so that politicians in Montgomery County can run a patronage system.
The Washington Post (p. B2, March 3) reports that Howard Cook, Director of the Montgomery County Liquor Control Department, is on an indefinite leave of absence after the county’s Chief Administrative Officer found irregularities in his expense accounts. The report says that Cook had charged personal expenses to his county credit card, which he has since repaid. Cook also repaid travel expenses for which he had billed the county, but which were also paid by an industry group. Cook, a consultant before being appointed to the $111,518-a-year job, had contributed to County Executive David Duncan’s 1998 political campaign and is linked to supporters of Duncan’s possible run for governor in 2002, the Post said.
Montgomery County’s continuing drama surrounding their Department of Liquor Control took another strange twist last month. According to the Washington Post (April 24, p. B7) Former DLC Director Howard Cook had been accused of misusing Department funds for personal use. The charges were forwarded to the state’s attorney, but no formal charges have been filed or adjudicated. Cook was fired by County Executive Douglas Duncan. Duncan had previously awarded a no-bid, $60,000 contract in 1996 to Cook to study privatization of Montgomery County’s unique monopoly on alcohol wholesale and retail sales. Cook became, according to the Post, a leading contributor to Duncan’s reelection campaign. When the privatization effort failed, Duncan appointed Cook to the $111,518 DLC Director’s job in 1997. The Post says that Cook promoted Duncan’s sister-in-law, a long-time DLC employee, from a $50,340 job to the $72,268 post of administrative service coordinator reporting directly to Cook.
Montgomery County, Md., one of the richest, best educated, most powerful suburbs in the world, has a stale beer problem, stemming from the county's admiration for Soviet-style central planning. In Montgomery County, beer wholesalers do not pull product from the shelves when it is older than its pull date. Budweiser, Coors, and other major brewers all have what Bud advertises as "born-on" dates to assure consumers that the beer is fresh. But the county has a complete monopoly on the wholesale beer market, which brings in some $45.5 million annually. And the county says it is not going to swap old beer for new. The county also has a wholesale and retail monopoly over liquor.
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