The convoluted and complicated process of liquor licensing

September 30, 2013 

Communities Split Over Recent Push To Lift Quotas On Bar Permits 

TARYN PLUMB
Special to the Worcester Business Journal

The 80-year-old laws that dictate liquor license allotments in Massachusetts can tend to be convoluted and complicated. And, some say, they're outdated, as they don't always fulfill today's demand — a contention that has prompted one Boston city councilor to file a home-rule petition that would lift the cap on licenses in her city.
Boston Mayor Thomas Menino, as well as the mayors of Somerville and Salem, are also pushing to change the way liquor licenses are doled out; that is, at the local level rather than by the state.
But communities in Central Massachusetts are split over whether such a change to the status quo would be a boon or a detriment.
"If there are more (licenses) allowed, it's going to dilute the amount of business that existing stores get," said John Saad, chair of the board of selectmen in Oxford. "I don't think we should, in effect, try to hurt those that are already in business."
On the other hand, Marlborough licensing board chair Walter Bonin, noted, "anytime additional flexibility is given to communities, it makes sense."
Licenses are allotted based on a city or town's population — as of the 2010 federal census — in several categories for package stores and establishments such as bars, restaurants, hotels and clubs (the latter known as "pouring" or "on-premise" licenses). Each community receives a quota of licenses it can give out, a process overseen by the state's Alcoholic Beverages Control Commission (ABCC), although it can petition the Legislature for more licenses.
However, cities and towns can also opt out of the quota system for on-premise licenses. Since the original law was enacted in 1933 with the end of Prohibition, 25 communities have done so, including Worcester, Marlborough and Sturbridge, according to the ABCC. Yet, all three communities still have quotas for package store licenses.
"Not having a license limitation for on-premises consumption is part of a generalized economic development," said Joel Fontane Jr., director of planning and regulatory services in Worcester. "It's important to having a healthy restaurant sector."
More than 200 on-premise licenses are in use in Worcester, with a population of more than 181,000. Meanwhile, the city is allotted 74 package store licenses — 37 all-alcohol and 37 malt and wine. It has issued all 37 of the former, and 17 of the latter, Fontane said.
Demand for on-premise licenses has been "airly consistent, he said, "which is a good thing, because it means that we've got an industry that is weathering the recession."
The much smaller town of Sturbridge — with a population of around 10,000 — has also enjoyed similar economic impacts by having no on-premise quota. Town Administrator Shaun Suhoski said the town has been well-served by the system overall.
"The prompt availability of liquor licenses has been a clear impetus to retaining and attracting a large number of diverse eating establishments — approaching 50 — that can offer liquor to their clientele," Suhoski said in an email. "The lack of a quota has had a favorable economic impact by increasing the number of viable eating establishments, thus increasing employment opportunities, and generating increased meals tax revenue for the community."
Marlborough, meanwhile, with a population close to 40,000, has 39 on-premise licenses right now, according to Bonin. Although it rejected the state-imposed quota, the city observes its own informal quota based on population, Bonin said. But exceptions are made for large developments, such as new hotels and restaurants, he added.
"The flexibility that we have, we think other communities should also have," he said. "We think that should be extended to package stores, as well." 

Hurting Small Businesses?
But in other communities, any change would either have little effect, or a negative one, according to officials.
"In a small community, you don't want to put small businesses out of business," said Saad, of Oxford. Particularly in the case of on-premise licenses, he said, "I would not be in favor of lifting the quota unless there were some restrictions."
The town of roughly 14,000 is allotted 14 all-alcohol pouring licenses; five wine and malt pouring licenses; three full package store licenses; and five wine and malt package store licenses. The package store licenses have all been granted, he said, while some pouring licenses in both categories remain available.
"We're in a good spot," said Saad.
The situation is similar in Auburn.
The town of 16,000 has 21 all-alcohol pouring licenses (15 being utilized); five wine and malt pouring licenses (four being utilized); four all-alcohol package store licenses (all four in use); and five wine and malt package store licenses (with all five in use), according to Town Manager Julie Jacobson.
"We do still have the capacity to bring in new restaurants, and from an economic development standpoint, that's a good thing," she said.
But she noted, "There would be very little impact on the town if the legislation changed."
In any case, it's an issue that – just like alcohol itself – should be handled in moderation.
"The environment now is fairly competitive," said Bonin, of Marlborough. "We certainly don't want to stifle that, but ... you don't want to open up the door to so many that you're unable to manage their activity."

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