A BEVERAGE BIZ Look Ahead at the 2014 LEGISLATIVE SESSION

The next General Assembly Session is scheduled to re-convene in January, marking the last year of the current four-year election cycle in Maryland.  That means all 188 legislative seats in the General Assembly -- along with the Offices of Governor, Lieutenant Governor, Comptroller, and Attorney General -- are up for election.  In addition, for the first time in the state's history, the primary election will be held in June just 60 days after the Session's conclusion.

For beverage industry interests, this politically charged time represents an opportunity to become even more actively engaged than they have in the past.  The Maryland State Licensed Beverage Association (MSLBA), in particular, has no plans to sit idly by.  MSLBA President David Marberger comments, "It's not really politics.  You're just talking facts.  You're saying, 'These are things that I experience.  These are things I face.  These are challenges that we have to overcome.'  And these are challenges that your local politician may not be aware of.  At some point in time, there has to be a give and take.  If you want your politicians to listen to you, you have to listen to him."

He continued, "It's no different than building a relationship with a different wholesaler or supplier.  When you meet them for the first time, it's the beginning of a relationship.  It's a give and take, a listening, an understanding, a take-some/give-some. Legislators are people just like you and I.  They put their pants on just like you and I, and they have a job to do.  Their job is to build a consensus for their constituents.  If you're not part of that conversation because you think it's dirty, nasty, ugly politics, then you will be left out and you'll be wishing that you hadn't been in the long run."

Chain store legislation is expected to be among the top concerns.  The previous Session of the General Assembly indeed saw the introduction of legislation that would allow grocery, big-box, and convenience stores to obtain off-premise beer and wine licenses.  Fortunately, the legislation's proponents filed the bill too late in the Session for it to have any real chance of advancing.  

MSLBA's leadership is preaching vigilance where this issue is concerned, having assembled economic and other data that refutes the contentions of the supporters.  In short, the association is ready to go with the facts!  MSLBA Legislative Chairman Jack Milani remarks, "I certainly think chain store [legislation] will be our most dominant issue.  The scary thing is it's not grocery-store specific.  It's basically take the prohibition away so that any chains can sell beer and wine  whether it be drug stores, convenience stores, and so forth." 

Other issues are also pressing.  This past summer, for instance, Maryland's highest court declined by a scant 4-3 margin to adopt so-called "dram shop" liability.  If adopted, this legal doctrine would have permitted vendors of alcohol to be sued by individuals who have suffered injury at the hands of a patron of that vendor.  Consequently, the owner of a tavern where a customer unwisely opts to drink and then drive hits another vehicle could be sued by the occupants of the other vehicle.

Lawyer and MSLBA lobbyist Steve Wise comments, "That was a decision that preserved the current law, which is that Maryland does not recognize dram shop liability.  We think that is the right position for the law to be in, but there may well be legislation in 2014 to change that."

Marberger, proprietor of Bay Ridge Wine and Spirits in Annapolis, urges, "If you are a bar owner or restaurant owner, you need to be part of that conversation.  Insurance premiums for the industry would just skyrocket.  It would change a whole lot of what people do in this state."

Wise, an attorney with the law firm of Schwartz, Metz, and Wise in Annapolis, also is concerned with the impact legislation has had on the economics of the business.  Like many others close to the process, he is still smarting from the recent increase in the state's alcohol tax.  "Ever since the tax was increased," he noted, "one of the side effects has been that whenever a customer purchases alcohol with a debit or credit card, their transaction fees are based on the total sale ... which, of course, includes the higher sales tax.  So, their transaction fees -- particularly among the larger packaged stores -- have gone up considerably.  There was no offset for that when the alcohol tax was raised.  So, we're trying to come up with a way to address that.  We have to be conscious of the fiscal impact of that.  The state has a continuing structural deficit.  We are working against that, but we're still going to try and address that for our members."

MSLBA officials also anticipate that efforts will be made in the 2014 Session to mandate that bars, eateries, and taverns recycle such products as aluminum cans and glass bottles.  Many of the association's members already recycle.  In fact, the MSLBA encourages the practice because it is both environmentally sound and ultimately economical.  However, a blanket requirement that all establishments recycle presumes that options for recycling are available to them.  This is not reality.

Wise comments, "What we're trying to do is show the industry that, through some better education of our members and working with the waste industry, that we can do as much or more to increase recycling on our own without a mandate or additional government regulation.  This is an issue that really does not fit well with a uniform statewide approach, because the economics of recycling for the waste haulers vary considerably depending on the jurisdiction.  One size doesn't fit all for every different retailer.  It depends on how big you are and how much space you have.  But we have found that our members may not be aware of the options that are out there, so we've had the waste industry come in and speak to our association.  We're working on a flyer that would be distributed out to every retailer in the state urging them to contact their waste hauler about the options."

Milani adds, "There is a lot of single-stream recycling that is available with the trash haulers now in the larger metropolitan areas.  But I think when you get to some of the more rural-type areas, it becomes a little cost-prohibitive.  Now is the time to educate, not mandate."

Whatever the issue, all three men stressed the importance of owners and operators getting involved in the process and letting their voices be heard.  Milani, who has co-owned Monaghan's Pub in Woodlawn since 1990, remarks, " When we get new people in, we try and first explain to them how things work.  We have a Lobby Day where we bring our membership in and they get to meet with their own delegates and senators to go over the issues that are important to them.  For some folks, it's intimidating the first time.  But once they realize that their elected officials really do want to hear their concerns, a lot of that intimidation goes away pretty quickly.  Even if it's an issue they don't agree on, most legislators do value conversations with people who are in their districts.  Some members have even noted that now the legislators are actually asking them questions about bills that may affect the industry."

Wise agreed.  "One of the great strengths of the industry is they're in every community," he added.  "Pretty much every member of the Legislature know the operator of a packaged goods store, a bar, restaurant, or tavern in their district.  That personal connection that either exists or could be developed through that network has always been the strength of the association.  But our members have to actively establish that relationship if they don't have it to keep that strength present in the years ahead."

Marberger, whose father-in-law Chuck Ferrar is a past MSLBA president, concluded, "I would love to see interest from our industry grow.  These are people who have invested their time, money, energy, and futures into the businesses that they own.  If they would invest just a little extra time and thought -- not even money -- to the legislative process, it would have dramatic positive effects on our industry."