Alcohol License Fight Returns To Legislature, For Now

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

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.