Md. Comptroller Pledges Detailed Report On LCB

OCEAN CITY — Maryland
State Comptroller Peter Franchot has assured the people of Worcester County
that he is going to get to the bottom of Liquor Control Board controversy
that’s been raging all summer long.

Franchot called his
office’s investigation of the Worcester County Liquor Control Board (LCB) “one
of the most intensive and thorough probes that this office has ever done”, and
said his office would not be lenient on the quasi-governmental monopoly if the
investigation found any sort of wrongdoing.

“Our first priority is
to protect consumers and help small businesses,” said Franchot. “We’ve heard a
lot of troubling allegations about price discrimination and we’ve got a
complete top to bottom, soup to nuts audit and investigation going on. If our
investigation says that there is an explanation for all these allegations, we
will most certainly report on that, but if it comes back and shows that there
was wrongdoing, we will not be bashful in any way.”

Franchot said that he
expects the investigation to be completed in the next few weeks, but it will
take a few months for the information that his office’s field officers have
been compiling since March to be released.

“We expect to have the
final report sometime in December,” said Franchot, “and the findings of the
audit, which is separate but also nearing an end, should be done around the
same time.”

Franchot noted that
although the findings of the audit will not be made public, he said that the
findings of the investigation would be made available to the public.

Countless instances of
finger pointing, name calling and politicking have occurred this summer between
the county’s 187 liquor licensees, the LCB and even some of the state’s wholesale
companies, as allegations of price discrimination and unfair, unethical and
even illegal business practices by the LCB have continued to surface.

In March, Franchot said
his office was notified of a Stoli promotion where several licensees were allegedly
offered the same bottle for different prices on the same day, which is a
blatant violation of Article 2B of Maryland state law.

He said that as his
field officers started to look into the matter, more allegations and leads came
forward, which caused the investigation to stretch much longer than it was
originally expected.

“This investigation is
impartial and subjective, but this is a big, big issue, because visitors to
this great resort don’t need to feel like they are being taken advantage of,”
said Franchot. “We are going to follow the facts and get to the bottom of the
allegations about price discrimination, and that report will be made public so
the citizens know. We don’t want anyone being gouged, or treated unfairly, and
we certainly don’t want consumers in Ocean City feeling like they are being
ripped off by artificially high liquor prices.”

Worcester County License
Beverage Association President Doug Buxbaum said this week that licensees are
feeling the sting of another round of random price hikes from the LCB, which he
says is putting a huge dent in people’s bottom lines as the summer comes to a

“We just don’t know what
to expect in this case, but what we do know is that our prices are going to
keep going up and it’s hurting a lot of people, and now, it seems that things
are out of our hands and in the hands of the politicians to decide what’s going
to happen,” Buxbaum said. “This has been going on for years, and it’s time for
the dispensary to go away and for private enterprise to take over.”

LCB officials said that
their profits, which they must turn over to the county and have decreased by
more than $600,000 in the last three years while still maintaining static gross
sales of more than $14 million, are due to the economy and the fact that they
lowered their markup prices to help see the licensees of Worcester County
through the tough economic climate.

“It certainly wouldn’t
be advantageous to us for a licensee to go out of business, because we would
lose their business,” said LCB Executive Director Brian Sturgeon. “We lost four
licensees last year due to the economy, so we lowered our prices to help them.”

LCB officials said that
when they realized that their contribution to Worcester County would be a mere
$110,000 this year, they quickly instituted a 4% price hike to their mark ups
in June and since then, licensees claim that the prices have gone up even

“They are going to keep
raising the prices to try and get their revenues back up and make it look like
all is well down there,” said Buxbaum, “but there is no reason that government
should be in the liquor business in Worcester County anymore.”

Franchot steered clear
of commenting on his feeling towards the dispensary’s role in Worcester County
in 2010, noting that it should be decided by the legislators and the County

“I’m a huge believer in
the genius of the private sector, and that is the engine that provides
employment and prosperity for us, but my views on the dispensary system are not
relevant to the discussion because my responsibility is to uphold the laws of
this state,” Franchot said. “Ocean City is a gem, and recession resistant, and
in most cases a contrast to almost anywhere else, but I assure the people of
this county that we are going to make sure everything is on the up and up and
if it isn’t, we are going to take action.”