Liquor Licensees Look To Expose LCB’s “Big Lie”

OCEAN CITY — After weeks of sitting back and watching the Liquor Control Board for Worcester County (LCB) go on the defensive, the county’s licensees threw a counter punch on Wednesday by revealing that they aren’t the only ones who have been paying too much for their liquor.

At a press conference at the Buxy’s Salty Dog Saloon in Ocean City, Worcester County License Beverage Association (WCLBA) President Doug Buxbaum tried to poke holes in what he called “the big lie the LCB has always loved to tell”, concerning the LCB’s prices to not only the licensees but also the people of Worcester County.

“[The LCB] has taken advantage of their power for too long as they have been gouging the residents and the licensees all along when they have claimed to be trying to help us,” said Buxbaum. “We are trying to once and for all dispute and put an end to the spew of misinformation.”

Buxbaum presented figures and a handful of examples that showed that the residents and the licensees of Worcester County have been paying heftier prices at both the retail and the wholesale level than those in neighboring Wicomico County. He also showed that despite the LCB’s claim that it has been losing hundreds of thousands of dollars because of the poor economy, added costs, and lower prices, its gross profits have risen each year since 2006.

“For a bottle of Don Julio tequila for instance, the Maryland Beverage Journal price is $29.99,” said Buxbaum. “If you were to buy it in a retail store, off the shelf in Worcester County, you would pay $52.99 for it, or a $23 or 77% markup.  In Wicomico County, you would pay $48.99 for the same bottle.”

Further price comparisons between the two counties showed that Worcester has in some cases, as much as 28% higher prices than that of Wicomico County, even though the Maryland State Law requires suppliers or wholesalers to sell liquor to the state’s four county dispensaries (Worcester and Wicomico, as well as Somerset and Montgomery) at the exact same price.

Last week, LCB Executive Director Brian Sturgeon said publicly that the dwindling revenues that the quasi governmental monopoly has returned to Worcester County was largely based on an across the board drop in pricing structure last year, as per a request from the County Commissioners, and an increase in the LCB’s operational costs.

“We lowered our prices to help the licensees and when we finally saw the numbers that came in for our contribution to the county for this year, we thought, damn, we have to do something to fix this, because we made a huge mistake and lowered the prices too much,” said Sturgeon.

The $110,000 that the LCB reportedly returned to Worcester County is the lowest total in well over a decade and is just a mere fraction of the almost $900,000 that was returned to the county in 2003 and far short of the approximated $777,000 given back just two years ago.

“Everyone knows that you can’t continue to run a business the way they have been,” said Buxbaum. “If I lost that much money, I would be on the street, and so would all of you in this audience. We feel that the pricing is causing people to go to Delaware or to other places in the state to buy their liquor, and we want to keep the business in this county to help the people who live here. It’s just another glaring reason why Worcester County needs to get out of the liquor business.”

Buxbaum said that the relationship between the LCB and the local licensees started to sour last year, when he says, the board arbitrarily elected to raise markup prices from 18% to 22%, but he noted that things really got heated last March when the LCB ran a $5 special promotion for bottles of Stolichnaya vodka, but didn’t offer the deal to everyone.

“We, as licensees, have to be prepared for continued price increases,” said Buxbaum. “We are considering a class action suit against the LCB for unfair pricing schemes and for not offering the deal to all the licensees as they are required to by law. They say that they did, but the fact is that they didn’t. In all the cases where they say that they were trying to help us, they have showed no proof. It’s just been words, and at best, half truths.”

If abolished, the licensees of Worcester County would see about 25% coming back to their proverbial bottom lines, but according to some licensees in attendance on Wednesday, the biggest impact could be on both the revenue returned to the county.

“Their six stores don’t pay taxes on inventory or personal property tax,” said Buxbaum. “So that alone, if those stores became private enterprise, would recoup more than six figures to the county.”

In addition, the WCLBA will be pitching the merits of having an economic impact study done by the Worcester County Commissioners in hopes of having a plan in place to replace the revenue given back to the county annually.  According to those on the licensee side of the debate, the way to replace the revenue seems to be the lone subject where they aren’t quite yet in a seemingly unified voice.

During Wednesday’s press conference, Buxbaum also took umbrage with LCB Chairman Don Hastings’ claim that only “six or seven licensees out of 187 were the ones trying to get them abolished”.

“We are more than 100 members strong at the WCLBA, and we are all together in our belief that the train is on the track and it’s time for the LCB to go, once and for all,” said Buxbaum.

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