Source: Missoulian 

By TYLER CHRISTENSEN of the Missoulian

Montana’s liquor licensing system is a mess that unfairly encumbers some businesses while handing others a near-monopoly market, says a new group forming to educate the public about the state’s liquor laws and push for reform.

“The situation in Montana is tough,” said Greg Carter, owner of the Broadway Wine Co. in Missoula and vice president of Fair Liquor Laws Inc.

Carter’s small retail business is just one of many hampered by the state’s inequitable - and expensive - liquor licensing system, he said.

Business owners and consumers alike are baffled by a licensing process they believe is unduly restrictive and confusing, he said. Broadway Wine Co., for example, must buy an on-premise consumption license in order to hold wine tastings.

Carter would like for people to know why the current system is set up the way it is, and he’d like even more for them to change it. That’s why he’s helping form Fair Liquor Laws, a new nonprofit group whose intent is to inform Montanans of the current liquor licensing situation and encourage them to contact their representatives.

The fledgling group, which filed for 501(c)(4) status at the end of August, counts only a handful of members so far. However, it will be ready to begin fighting for reform through the Legislature in January, Carter said.

The group has already been in contact with several legislators around the state and is ironing out a plan to bring to the next legislative session. Specifically, the group would like to start by killing the current quota method of allocating certain liquor licenses, Carter said.

According to the state Liquor Control Division, Montana uses a quota system for licensing based on population numbers. In Missoula, for instance, one new all-beverage license is granted for every 1,500 residents.

However, Missoula has more all-beverage licenses than its quota allows because 26 licenses were grandfathered in when the system was adopted in the 1970s. The city’s population would have to increase by an additional 39,000 residents before a single new all-beverage license could be issued.

Restricting the number of liquor licenses artificially inflates their value and leads to big differences in price from one location to another, Carter said. The last all-beverage license sold in Missoula, he said, went for $750,000.

The low availability and high cost of liquor licenses discourage new restaurateurs from going into business and chase away chains that bring jobs to our local economy, Carter said. Small restaurants that want to serve beer and wine may have to wait for years for a license to become available, then when one does, they usually can’t afford it.

It’s a telltale sign when corporations like Olive Garden, which have all the necessary resources, opt not to open new locations in Missoula because they can’t secure a liquor license, added John Powers. He became involved with Fair Liquor Laws after trying to buy wine online from an out-of-state provider some 18 months ago.

He discovered that, in order to ship wine into Montana, even for personal use, he needed to buy a “connoisseur’s license.” So he did. But he still thinks Montana’s laws are behind the times, considering how much the Internet has changed consumers’ buying habits.

And why is it, he wonders, that Montanans can purchase guns and prescription medications online and have them sent into the state, but not beer or wine? Why single out liquor?

“It’s a big, confusing problem with all these other tentacles tied to it,” Powers said. “But it’s as simple as the people losing out.”

It comes down to what Montana residents want for their state, Carter said.

“If they would like more choice, if they would like to have a glass of wine or a mug of beer in their favorite little restaurant in Hamilton or Polson or Kalispell or wherever, then they should be informed why they cannot,” said Carter, who started out on the wholesale side of the liquor business more than 25 years ago. “People are tired of these archaic liquor laws that encumber businesses.”

Some fed-up business owners have already complained to state representatives such as Sen. Dan Weinberg, D-Whitefish, who is not affiliated with Carter’s group but who supports similar changes in Montana’s liquor laws.

“We have the most restrictive liquor laws in the country, I believe,” Weinberg said. “I’d like to make the system fair and I’d like to promote commerce.”

Weinberg said he’s been meeting a lot of people who’d like to see the liquor laws changed. Specifically, they’re complaining that the quota system is tough on small restaurant owners who need to serve alcohol in order to compete with other restaurants, he said.

It is difficult for “dry” restaurants to compete with “wet” ones, said Peter Lambros, who runs Caffe Dolce in Southgate Mall.

If just one person in a group of diners wants a cold beer or a glass of wine with his meal, the entire group will go to a restaurant that serves alcohol, Lambros said. Even restaurants that don’t actually sell large quantities of liquor have a competitive advantage because customers will keep them in mind, he said.

Lambros is pursuing a cabaret license for a new Caffe Dolce to be built on the corner of Brooks and Beckwith streets, “but there are none available and I have had no success getting one,” he said.

Weinberg is considering carrying new legislation that would do away with the quota system while at the same time protecting those who have already invested money in a license, he said.

“I found that those who have liquor licenses are very protective of them, and they’re very protective of their investment,” Weinberg said.

After all, if the quota system is repealed, prices would deflate and quickly diminish the value of current licenses.

The Fair Liquor Laws group understands the interests of current license-holders and will be discussing ways to make sure any changes to Montana’s liquor laws are fair to them, Carter said. One possibility is to put money from future license sales into a general fund that could be used to pay back those who bought their licenses at inflated prices.

Fair Liquor Laws anticipates some opposition in the Legislature from the Montana Tavern Association, which, Carter said, is a powerful lobbying entity largely responsible for the current licensing system.

The association has an interest in holding down the number of liquor licenses to protect its members from competition, he said. But this gives tavern owners an “unfair competitive edge, a near-monopoly,” Carter said. “Competition is good, but you have to have a level playing field.”

Diana Koon, executive director of the Montana Tavern Association in Helena, referred questions from the Missoulian to the association’s legal counsel and lobbyist Mark Staples, who did not return repeated phone messages.

At this point, it’s important just to note that something is being done about the situation, Carter said.

“The restaurant laws need to be revisited, and short of a complete liquor law reformat, put before the Legislature,” Carter said. “All we’re asking for is a fair, level playing field.”

Reporter Tyler Christensen can be reached at 523-5215 or at tyler.christensen@lee.net

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