Montgomery County runs the only complete county-owned liquor monopoly in the nation, and a lot of customers think it is an example of why the government should stay out of business.
The Department of Liquor Control, established after the Prohibition Era to prevent the construction of a saloon on every corner, is the single source of every can of beer, bottle of wine, and fifth of liquor sold in Mont-Gomery.
The department turned a $5.6 million profit last year and that's the main reason that it has survived as other counties and states abandoned their liquor monopolies in favor of free enterprise.
A recent spate of complaints about Liquor Control, however, has led Montgomery County Executive Charles W. Gilchrist to give top priority to deciding its future.
The complaints center around the cost, alleged inefficiency, inflexiblity, and unreliability of the county's liquor system.
Matt Prothos, owner of the James III Restaurant in Bethesda, said the chronic shortages in the county's warehouses prevent him from stocking popular brands and the customer "only concludes that I'm not running a quality restaurant."
"A customer came in for dinner and ordered an aperitif wine. We didn't have it. He wanted some Chivas Regal. We were out of it. He ordered a bottle of dinner wine. We didn't have it. After dinner, he asked for some Kahlua. We were out."
Prothos' complaint is echoed and even embellished by dozens of restaurant operators, retail wine and beer dealers, and consumers in Montgomery County.
Last month, a scathing "loss control" report by county government auditors cited "appalling" warehouse conditions -- including hazardous fork-lift operations and "very poor" security reflected by "casual" checking of stock, infrequent locking of entry and exist gates and trucks standing unlocked overnight while loaded with $30,000 or more in merchandise.
A county official who toured the warehouse last year before the security buzzer gates were installed for the first time last July said he saw "some guys walk out with a package to their car. I don't know... it could have been their lunch."
Liquor Control outlets are staffed by 300 civil servants, entitled to all the benefits and protections of other Montgomery County merit system employes. The average county-employed clerk is paid about 20 to 30 percent more for the same job than a clerk in Virginia is state-owned liquor stores or in the private stores in the District, according to a county government report.
Although Liquor Control claims a 10 per cent profit on its $56 million annual sales, this figure is about half as high as the profit made by the Virginia Alcoholic Beverage Control system, when compared to sales, according to the recent county government audit.
"As a resident of Montgomery County," said Jerry Winter, proprietor of Chevy Chase Wine and Liquors in the District, "I'm disappointed that they don't make more money so that our taxes could be lowered. We pay among the highest taxes in the country, you know that, don't you?"
But Alex Wernick, the most recent Liquor Control Department director, defends his record by saying that profits have gone up 18 per cent between 1977 -- when he arrived -- and 1978.
"The present administration has to decide: Are we going to be here for business or for service or for control? That's a policy decision that has never been made," Wernick said.
A former private liquor distributor, Wernick said he has run the department "like a business."
Many of his customers, however dispute its efficiency, Prothos, the restaurateur, said that his orders from the warehouse are often 25 to 30 per cent short. Bill Hardy, manager of a county liquor sales outlet in Rockville, said he is forced to stock his shelves with items that don't sell -- because the monopoly operation insists on uniformity in all stores.
"They say that's because it's a monopoly system. I say it's bad business," Hardy said.
"They stock way too many items -- 2,100 -- and probably 1,000 or 1,200 of them you don't need in great quantities. I'm out of Jim Beam (bourbon) now for the second week in a row. You're talking about the biggest seller (bourbon) in the country," said Hardy. "Instead, I can bet up at the warehouse there is a pallet of some odd-ball junk that you can't sell taking up the space."
In Bethesda, Peter Frank of Talbert Ice and Beverage Service, who must buy his beer and wine from the county warehouse, said he has "innumberable" problems getting his merchandise.
He is "constantly" out of the fast-selling Almaden wines, and often out of Colony, Inglenook and Paul Masson varieties."Besides, the county itself is our biggest competitor. They not only sell to us but they sell in their (retail) stores the same goods at prices we retailers cannot afford. We have to mark our products up 25 to 30 percent," said Frank.
The price of liquor in county-operated retail stores in Montgomery differs only slightly from the cost of the same brands in Prince George's County, where liquor sales have been decontrolled, and the District, where private industry reigns supreme.
Gilchrist, who took office only a month ago on a platform of making government more efficient, is getting conflicting advice from his constituents.
"The county has grown up," said William Thompson, a member of the county's Economic Development Advisory Board, which is urging Gilchrist to turn the monopoly over to private enterprise. It's ridiculous to create a cadre of civil servants to punch cash registers and stock liquor shelves.
"We may need to get out of beer, but I don't think the people would allow getting out of wine or liquor," said Charles Buscher, a former liquor distributor who heads a Montgomery County Chamber of Commerce Liquor Study Commission established by the County Council.
"There's still a very strong anticonsumption feeling out there," he said.
"We don't claim to be perfect," said Wernick, the director of the department, "because it is a government operation, the normal mistakes you would make in private industry are no good. Government is supposed to be God and everything else." CAPTION:
Picturel, The College Plaza liquor store in Rockville, operated by Montgomery County. By Margaret Thomas, The Washington Post; Picture 2, Alex Wernick, director of Department of Liquor Control, in warehouse. By Margaret Thomas, The Washington Post.