County Forced To Raise Booze Prices To Stay Profitable

SNOW HILL – Wine and alcohol prices are expected to increase at county-owned stores this week as Worcester County struggles to keep its Department of Liquor Control out of the red.

Immediate price increases approved Tuesday by the Worcester County Commissioners include a $1 per bottle jump in the cost of all 1.75-liter products and a 50-cent increase per bottle of wine.

“We’re still going to stay competitive,” said Bobby Cowger, director of the Department of Liquor Control.

In addition to the immediate hikes, the prices on all products above 50 milliliters will increase 50 cents on Jan. 1. The split case charge, which is currently 50 cents a bottle, will increase to 75 cents a bottle Jan 1.

Cowger said that without the price increases his department would finish the year at a loss. Following the July law change that allowed the county’s alcoholic beverage licensees to deal directly with wholesalers, he said he knew revenue would drop. He tried to be proactive by cutting department costs as much as he could, even laying off seven people.

Cutting costs wasn’t enough, though, and he said the only other option was generating additional revenue. He said the price increases approved by the commissioners would bring in an extra $130,000.

Commissioner Ted Elder questioned whether the county’s liquor prices would be competitive after the increases. Cowger assured him they would. He pointed out that even a 75-cent-per-bottle charge for split cases was significantly less than the $1.39 to $1.49 charged by other companies.

“They can’t buy the volume we can buy,” Cowger said.

Commissioner Chip Bertino asked how viable the liquor business would be for the county going forward.

Cowger responded that his department had been in existence for decades and that voters had supported keeping it open when they were asked in a 1998 referendum.

Cowger added that now that bar owners in Ocean City had the option of purchasing from wholesalers as well as Worcester County they were happy.

“We’re an asset to the bars now,” he said. “They’re buying from whoever’s cheapest.”

Rather than simply looking at net profit figures, Cowger maintained that the department had a $2 million payroll and owned several facilities throughout Worcester County.

“It’s not just the profit,” he said. “You need to look at all the additional income the county benefits from. We’re going to put a $2 million payroll on the street if they close up. I don’t think that was the county’s intention. If it gradually fades away, so be it but to just close it up would be a huge mistake.”

Commissioner Joe Mitrecic pointed out that in spite of the department’s $15 million budget it did just $41,000 in net business last year. He added that the 16th Street store in Ocean City, even with the price increases, was projected to lose $12,000 this fiscal year.

“This is an archaic, out-of-date system,” Mitrecic said.

Mitrecic added that many area residents travel to tax-free Delaware to purchase their liquor.

Cowger replied the Ocean City store’s trouble is there are too many people selling spirits in Ocean City.

“There’s no question Ocean City is pricing themselves out of the resort business,” he said.

Commissioner Jim Bunting interrupted the heated debate by acknowledging that the future of the Department of Liquor Control was in question.

“We’re certainly looking at it down the road,” he said. “We all appreciate the job you’re trying to do, but it’s an issue looming up in the future.”

The commissioners approved the proposed price increases with a vote of 6-1 with Mitrecic opposed.

 

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