It’s About Time
An article in the Maryland Daily Record entitled It’s About Time that discusses the bill recently passed invalidating a previous law that banned wholesalers from giving large retailers a volume discount.
By Daily Record Staff
Published: May 27th, 2010
It only took 11 years.
The state Board of Public Works’ recent approval of a settlement in the long-running fight over Maryland’s liquor
laws should be just the first step toward a much-needed modernization of the state’s antiquated regulatory system
of the alcoholic beverage industry.
The board voted unanimously last week not to appeal to the Supreme Court a 2009 ruling by the 4th U.S. Circuit
Court of Appeals invalidating a key Maryland liquor law that banned volume discounts for retailers.
TFWS Inc., which operates Beltway Fine Wine and Spirits in Towson, challenged the volume discount ban in a 1999
lawsuit. The law prohibited liquor wholesalers from giving large retailers a better price. The law’s so-called
post-and-hold provision required the wholesales to report their prices monthly to the state comptroller and then to
maintain those prices for the following month.
TFWS won at the circuit court level in 2004, but the state appealed. The case went to the 4th Circuit no less than
four times as the court weighed the 21st Amendment, which repealed Prohibition and gave states the authority to
regulate the sale and distribution of alcohol, against the Sherman Antitrust Act. Finally, last July a 4th Circuit panel
held that Maryland’s law violated the Sherman Act.
This settlement will clear the way for increased competition in the Maryland liquor industry, which should be a boon
for consumers. Large-volume dealers will finally be able to use their purchasing power to leverage better prices
from wholesalers, which should translate to lower retail prices.
Small liquor stores without high-volume sales will be at a competitive disadvantage, but what else is new? Small
operations battle the big guys every day in other sectors of the retail industry, so why should the alcoholic beverage
sector be any different?
Now that the courts have forced this long-overdue step on Maryland, the General Assembly should come back to
work next January determined to update other provisions of state liquor laws. For one, Maryland consumers should
have the right to have wine shipped directly to their homes from wineries, either in-state or out-of-state. Thirty-six
states and the District of Columbia already have such laws.
Despite the support of a majority of members in the House of Delegates and the state Senate last session, directshipping
legislation was scuttled in the face of opposition from powerful alcohol wholesalers, distributors and
The legislation was shunted off to summer study, but it should return in 2011 and it should be passed.
It’s also time to revisit Maryland’s alcohol tax rates. Taxes on beer and wine were last raised in 1972 and those on
hard liquor in 1955.
State leaders wanted no part of an alcoholic beverage tax increase in 2010 in an election year during a recession,
but such an increase should be part of an overall plan to address the state’s fiscal health in the 2011 legislative