Voters Will Decide If Massachusetts Retailers Can Carry Beer and Wine at More Locations, and Not Everyone Is Happy

Cumberland Farms just inched one step closer to eviscerating current regulations that determine the number of retail alcohol licenses a single company can hold in Massachusetts. To the consternation of the Massachusetts Package Stores Association (MPSA) — a non-profit trade organization that represents thousands of independent liquor stores in the state — the Supreme Judicial Court for Suffolk County just ruled that voters will be able to vote on a ballot question in November that could grant Cumberland Farms, as well as countless other national and international retailers, access to unlimited retail beer and wine licenses in Massachusetts.

As it stands, no company is allowed to own more than seven retail alcohol licenses in Massachusetts, though that number is meant to increase to nine in 2020. That includes food stores like Cumberland Farms and Market Basket, for example. But if Massachusetts voters pass the ballot question — which was initially determined by state Attorney General Maura Healey to be in compliance with the Massachusetts constitution — caps on retail alcohol licenses for food stores will be eliminated.

The ballot question was proposed by Cumberland Farms, which was founded in the 1940s as a Rhode Island dairy farm, evolved into a convenience store in Massachusetts in the 1950s, and is now an East Coast chain of over 500 stores owned by the Blackburn, England-based retail giant EG Group.

The ballot question also proposes the mandatory use of computerized ID scanners — which are not currently mandated by the state’s Alcoholic Beverages Controls Commission (ABCC) — as well as the creation of a fund for the ABCC to hire one investigator for every 250 new licenses issued to enforce the new rules.

The MPSA filed a suit with the Supreme Judicial Court, alleging that the ballot question contained too many unrelated questions and that it would violate a clause in the state’s constitution that prohibits voters from specifically appropriating funds. The Supreme Judicial Court’s decision effectively stymied the MPSA’s efforts. (See the full ruling here.)

The MPSA outlined its position in a press release in December 2019:

Under the current law, no business in Massachusetts has a monopoly on liquor licenses because state law mandates that every Section 15 licensee may hold at most seven alcohol retail licenses in 2019, and nine licenses beginning in 2020. Cumberland Farms currently has 7 licenses, which is the same amount that all other chains are allowed. Cumberland Farms introduced its ballot question to circumvent the legislative process by confusing voters into giving this single company unprecedented control of the retail alcohol marketplace with a potential 200-store network.

The MPSA believes that, if passed, the ballot question will allow large corporations like Cumberland Farms, Walmart, Target, and others to create a monopoly on retail alcohol sales in Massachusetts, which will eventually drive independent, mom-and-pop package stores out of business.

“The intent of the ballot question is to deregulate the retail tier for off-premise alcohol sales and to dismantle the licensing scheme that was put in place 80 years ago to prevent marketplace control,” says Robert Mellion, the executive director of the MPSA. “It is a blatant, brazen attempt at marketplace takeover by super corporations. I’ve honestly never seen anything like this.”

Matt Durand, who is the chairman of the ballot committee supporting the initiative and the head of public policy at Cumberland Farms, thinks the MPSA’s anxieties are “ridiculous.”

“Massachusetts has some of the strongest laws in the country when it comes to unfair trade practices, and our experience in other states shows that retailers large and small can sell alcohol in a safe, fair market environment,” Durand told Eater via email. “The closer thing to a monopoly is the system that exists today — the system we’re trying to reform. The package stores have cornered the market, and now that they have their licenses, they don’t want competition from any other channel of trade. That may be good for the liquor store lobby, but it isn’t good for the Commonwealth overall.”

Durand and Cumberland Farms reason that the ballot question simply offers consumers more choice, while also strengthening age verification rules. (Mellion told Eater that the MPSA opposes the use of computerized ID scanners because they are relatively easy to trick with a cheap fake ID, and they create a convenient defense for retail alcohol sellers in the instance they sell to a minor.) Durand also says that the ballot question would allow the state more funding to better enforce the laws.

“I’d call that a pretty fair win for everyone — not some devastating loss for the package stores,” said Durand. “They’d still have their niche as the only stores selling hard liquor, and they’re always going to offer the best variety when it comes to beer and wine.”

According to Durand, food stores like Cumberland Farms aren’t trying to put independently-owned package stores out of business. He told Eater that food stores don’t have the shelf space or the demand to support the level of beer and wine inventory that package stores currently provide.

“Food stores want to offer a convenient option for that last-minute bottle of wine with dinner or that six-pack of beer you forgot to buy before the big game,” said Durand. “In our view, it’s fundamentally two different shopping occasions, and we’ll coexist as we do in so many other states already.”

Mellion and the MPSA don’t buy the coexistence fantasy.

“Unlimited licenses will ... force wholesalers to give [food stores] a better price,” said Mellion. “The gap in pricing will become so great that independent package stores won’t be able to compete.” And everyone knows what happens to stores that can’t compete on pricing.

It’s impossible to think about the implications of the ballot question without thinking about them in the context of the COVID-19 pandemic. Three months ago, consumers might not have thought twice about making two separate stops — one at the grocery store, another at the package store — while running errands. That calculus has certainly changed, and the allure of convenience — which convenience may offer less exposure to a highly contagious and potentially deadly virus — could prove overwhelming for voters. It could also prove catastrophic for independent package store operators.

Even if the ballot question is passed in November, and the state adopts measures to ensure corporate food stores can’t manipulate pricing, Mellion isn’t convinced the outcome will be any better for independent package stores.

“It’s naive to think [food stores] won’t litigate or become their own wholesaler,” said Mellion.

Cumberland Farms has hundreds of locations in Massachusetts; Walmart has more than 30; Target has 20 within 20 miles of Boston; Market Basket is ubiquitous; Whole Foods is ubiquitous, too. Durand and Cumberland Farms can proselytize about coexistence as much as they’d like, but if the ballot question is passed it’s hard to picture a scenario in which independent package stores aren’t hurt in a meaningful way.

“For mom and pops, this all they have — they’re literally fighting for all they’ve got,” said Mellion. “These folks are scared out of their minds that this is the end.”

• Cumbies Bests Packies in Bid for Ballot Question that Would Let Every Market Get a License to Sell Beer and Wine [UH]
• Health Officials Oppose Expanded Booze Sales [CNHIN]