In Massachusetts, we have been following the ongoing debate in New Jersey to expand the number of liquor licenses that one entity can own. For decades, supermarkets and other entities in both states have been unnecessarily and unfairly limited under outdated laws that stymie business growth and customer convenience.
Massachusetts had endured these onerous restrictions until lawmakers and business came together on a compromise that benefits everyone, taken from an idle legislative proposal that has been sitting in New Jersey Legislature.
Like New Jersey’s two-license limit, businesses in our state were only permitted to own up to three liquor licenses. That changed in 2012, with a phased-in law that will ultimately allow one entity to own up to nine liquor licenses by next year.
The result has been tremendous for the state’s economy. An independent, non-partisan evaluation by the Massachusetts Alcoholic Beverages Control Commission showed that the law protected small retailers, created convenience for consumers, generated state revenue and promoted business growth.
The immediate benefit was evident. Just with an increase from three to five licenses, Massachusetts saw $16.9 million in increased economic activity and 150 new jobs, according to that study.
Moreover, alcohol excise-tax revenues increased from $76.3 million to $84.4 million over the initial four fiscal years. The state commission reaffirmed what we’ve known for a very long time in Massachusetts: Supermarkets can sell liquor without negatively affecting liquor stores.
Debate over expanding the number of liquor licenses one entity can hold had festered in Massachusetts since 2006, when it was first proposed. We heard all this talk of Armageddon from the liquor lobby, which tried to convince our lawmakers that allowing more businesses to sell alcohol would chase out the mom-and-pop liquor stores and kill the sector.
What a fallacy. First, the Massachusetts study, in its analysis, found absolutely no evidence that smaller retailers are being “overrun” by supermarket chains in our state. In fact, what we have ultimately learned, is the value of liquor licenses has grown here.
For those liquor store owners who opt to sell their licenses to supermarkets, they are finding a tremendous return on their initial investment. If they chose to remain in business, as most have, they have not lost revenue.
Meanwhile, the claims from the liquor store lobby that supermarkets would be unable to regulate the sale of liquor to minors are also unfounded. We have not seen an uptick in violations, as supermarket owners have ensured they have properly trained employees in ensuring purchases are being made by those of legal age.
The net result of this legislation has allowed the food industry to grow and further thrive.
As state lawmakers in New Jersey consider this legislation, it is my hope that they consider Massachusetts as a proven, objective model. In the past few years, we have swiftly removed restrictions that have helped no one, ended all the misdirected fear and created the type of economic engine that shows Massachusetts is on the right track.
Thank you, New Jersey. Hopefully, your state lawmakers will ultimately recognize the economic boon and customer convenience from modernized liquor laws.
Chris Flynn is the President of the Massachusetts Food Association.