Alcohol License Fight Returns To Legislature, For Now

Consumers In Middle Of Battle Over Convenience, Retail $$$

Alison Kuznitz5/15/23 5:21 PM

STATE HOUSE, BOSTON, MAY 15, 2023.....Legislation that would establish a new class of alcohol licenses for convenience stores, supermarkets and other businesses may lead to another statewide ballot question, an opponent of the proposal testified Monday.

Cumberland Farms and Market Basket, for example, could be eligible for an unlimited number of so-called food store licenses for wine and malt beverages under the Rep. Daniel Cahill bill (H 253) -- unlike package stores and other retailers subject to stricter alcohol license caps under existing state law, warned Robert Mellion, executive director and general counsel at the Massachusetts Package Stores Association.

"H 253 is a blueprint for a ballot question. Here we go again," Mellion told members of the Joint Committee on Consumer Protection and Professional Licensure on Monday afternoon.

Package stores can have only nine licenses, but Cumberland Farms could theoretically control 206 licenses at all of its Massachusetts locations, he said.

"I don't think that's essentially fair," said Mellion, who helped write Question 3, which voters defeated last November. It would have gradually increased the number of total alcohol licenses that retailers could own or control from nine to 18, while also decreasing the limit on "all-alcohol" licenses.

About 45 percent of voters supported Question 3, with 55 percent voting to reject it.

Local licensing authorities would decide how many food store licenses are issued, under Cahill's bill. Nearby retailers that face heightened competition from businesses with food stores licenses would be eligible for small business support grants, according to the bill, which was sent to study last session.

Matthew Durand, senior counsel at Cumberland Farms, said the legislation reflects changing customer demands and can provide a financial lifeline for small food retailers operating on "razor-thin margins." Cumberland Farms had pushed for a ballot question to remove the state's license cap but then dropped its plan during the COVID-19 pandemic.

"It allows us to evolve and remain competitive by selling the beer and wine that our customers clearly want to buy from us, and that they can often purchase from competitors already," Durand testified. "We have to keep adapting to the future, as we should have to in a competitive market."

The market won't be flooded with new licenses, Durand said, as he highlighted guardrails in the bill that would slowly ramp up the number of available food store licenses in relation to existing licenses for package stores.

Wine and malt beverage displays could not exceed 35 percent of selling area space at businesses with food stores licenses. The bill also requires licensees to adopt an age verification and employee training policy to ensure alcohol isn't sold to minors.

Durand, responding to a question from Sen. Walter Timilty, couldn't immediately pinpoint the economic impact of creating the new licenses.

"It would be a very case-by-case assessment," Durand said, signaling he'll follow up with more information. "But it would be important. It's a traffic driver for people who want to pick up a loaf of bread and a six-pack, or some burgers and a bottle of wine."

The bill is "controversial" -- and this category of legislation is a "minefield," said Peter Brennan, executive director of the New England Convenience Store and Energy Marketers Association. But Brennan argued it's also "commonsense legislation" that will allow stores to diversify their product offerings and tackle the scarcity of liquor licenses in Massachusetts.

"We're not trying to compete with liquor stores with this new license. People go to a convenience store for certain products; we aim to satisfy every need the customer has at that moment," said Brennan. He noted people who are hosting parties will still go to their neighborhood package stores -- not to convenience stores -- for "massive" quantities of beer and wine, among other spirits.

Yet the bill could spark monopoly-like conditions, Mellion also testified. Food store licensees could garner enough buying power to coerce wholesalers into giving them cheaper prices, he said.

"It literally will change the dynamics in the state, turning us into a chainstore-state," Mellion told the News Service.

-END-
05/15/2023

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‘Drinks to go’ debate is back at the State House, and as contentious as ever

 

As restaurants push to sell booze to go for another year, the liquor store lobby is pushing back.

 

By Jon Chesto Globe Staff,Updated March 8, 2023

 

 

Bartenders at the Tasty restaurant on Court Street in Plymouth prepare cocktails to go in 2021. The state eased alcohol rules during COVID to allow restaurants to sell to-go drinks with takeout orders. A measure extending the policy is up for debate on Beacon.

 

Lobbyists for restaurants and package stores are facing off against each other at the State House over the future of “cocktails to go.”

So are, apparently, the leaderships of the House and Senate.

 

Last week, the House of Representatives passed a supplemental budget bill that would, among other things, continue a number of measures taken to help the state weather the pandemic. Among them: “cocktails-to-go” — a rule originally intended to be temporary that allows Massachusetts restaurants to sell limited amounts of booze with takeout meals. That measure will remain in place until March 31, unless the Legislature acts quickly. The House bill would extend cocktails-to-go for another year.

 

Then on Monday, the Senate’s ways and means committee released its version of the supplemental budget, with cocktails-to-go nowhere to be found, although the Senate did include another restaurant industry priority: extending streamlined outdoor dining for another year. The Massachusetts Restaurant Association is pushing for an amendment that would add cocktails-to-go, also known as drinks-to-go, to the budget during the floor debate on the bill on Thursday. If it is left out of the Senate bill after that, there won’t be much time for the House and Senate to work out their differences on the issue, with the expiration date just weeks away.

 

The state Legislature initially allowed cocktails-to-go in the early days of the COVID-19 pandemic to help shuttered restaurants get more takeout revenue and empty their unused inventories of alcohol. Orders were capped at 64 ounces of spirits, 192 ounces of beer, or two bottles of wine (1.5 liters). Once then-governor Charlie Baker rescinded his state-of-emergency declaration in 2021, the policy was still considered valuable because many restaurants were struggling to recover from the pandemic at the time. Lawmakers extended it in 2021, and again in 2022, along with outdoor dining and several other pandemic-era provisions.

 

Restaurant association president Steve Clark said cocktails-to-go has proven to be a service that customers appreciate. And it can be helpful to augment revenue at a number of restaurants. If the Legislature eventually makes it permanent, Clark said, that might encourage more restaurants to invest in to-go options.

“Admittedly, it’s a small amount of money,” Clark said. “[But] this is such a low-margin industry. Any type of revenue is still good.”

 

Liquor store owners see it differently. The Massachusetts Package Store Association has fought fiercely against the drinks-to-go extensions, to no avail so far. But the third time might be the charm for MassPack, if the Senate ways and means language wins out. Executive director Rob Mellion has been trying to make the case that “drinks to go” translates to “drinks for kids,” saying meal delivery services are ripe for abuse by underage drinkers.

 

Mellion concedes that the high markups for restaurant cocktails probably won’t keep too many customers from the lower prices offered at liquor stores. But he also worries that cocktails-to-go is part of a broader push to deregulate alcohol sales on the part of multistate retailers and liquor industry lobbyists. Alcohol delivery needs more regulation in Massachusetts, he said, but a simple extension won’t accomplish that. Mellion sent an email on Wednesday morning to senators saying the current hard-to-police nature of alcohol delivery is a good reason to put an end to cocktails-to-go.

 

“This was done very hastily three years ago because the intent was we were going to do this and extinguish it fairly quickly,” Mellion said in an interview. “The real concern always has been that this was going to be a tool for direct-to-consumer shipping of alcohol, which is exactly what Big Alcohol is intending to do.”

 

Mellion has an important ally in this fight, the Massachusetts Addiction Prevention Alliance. The nonprofit blanketed the Senate with emails last week opposing the cocktails-to-go extension, echoing several of Mellion’s concerns. “It’s softening alcohol regulation that we’ve had in place to prevent underage drinking for years, for decades,” said Heidi Heilman, the group’s president.

 

And like Mellion, Heilman argues that this drinks-to-go push in Massachusetts is part of a broader national strategy by alcohol suppliers and multistate sellers to break down the industry’s strict regulations. “If you want to protect small businesses, you have to pay attention to this type of regulation and how it impacts the whole market,” she said.

 

But Representative Tackey Chan, the House’s point person on alcohol regulation, said he simply doesn’t have enough data yet to decide whether the practice should be stopped for good. That’s why Chan said he supports allowing cocktails-to-go for another year, to gather more information.

 

“It was a great tool in the middle of the lockdown to address a whole litany of issues,” Chan said. “There has been a recovery of the business sector slowly in many places, but not all places. Another extension of the current process will give us more time to do more evaluation about what the next steps should be as we continue to move through the new economy we’re all living in.”

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