Dine and Whine

By Beacon Staff

This is part two on the subject of beverage licensing in the state of Montana – “The Politics of Drink” was last week’s subject – but this week my intent is to deal with the non-political and practical issues.

First, let me acknowledge and thank those of you who wrote to express your opinions about the issue. Unfortunately, many were off the mark and took the opportunity to impart their own rants on socialism and other non-germane topics. Some, however, got the point.

The point is: If I want to open and run a food service establishment and my menu leans toward “fine dining,” why can’t my patrons, in fact, order a glass or a bottle of wine that complements their meal? Why does the state of Montana take the paternalistic stance on beverage licenses that limits free enterprise and personal choice?

This is not about DUI laws, socialism, addiction or anything other than an individual business owner being able to conduct business in a responsible way. One reader’s response cited the absence of the Olive Garden chain restaurant, and they are correct: We do not have Olive Garden, Red Lobster and a number of other national chain restaurants because they cannot get beverage licenses. The ability to sell a bottle of wine or a glass of beer is a key part of their business plans. But Montana does not care. I’ve seen our elected leaders moving their lips and uttering the phrases about creating jobs, but their words do not match their actions.

Mind you, Olive Garden would not be my first choice for Italian food, but they run a good business and enjoy a good reputation. The same is true for Red Lobster. And what about me? What about the two different businesses that I could not create because the allocation of beverage licenses was “at capacity?” Why is there a capacity? What about my friend who was forced out of the wine retailing business because he couldn’t let his customers taste wines they were considering for purchase?

A reader also challenged me on the prices I quoted to buy existing licenses, but I have the paperwork to back up the numbers. That’s what’s been going on – the dirty little secret that the beverage license cabal has going for itself.

You see, the state’s system of license allocation is based on an arcane method of number of licenses per thousand people in a geographic area. But it also incorporates local municipal zoning laws. And allocations in urbanized areas are completely different from areas not incorporated as cities or towns. In other words the allocation formula in the cities of Kalispell and Missoula differs from the formula used for areas that could be adjacent – like right across the street – if those areas happen to be outside the city limits.

The dirty little secret also includes this little – or big – number: For a number of years an ordinary beverage license purchased from the state cost $5,000. That’s high compared to most other states, but still it’s a number that a restaurant owner can reasonably expect to recoup after the business opens. But since the number of licenses is so severely limited, those $5,000 licenses have increased in “value” by factors of 20 to greater than 50. You want to buy an existing license? It’s nearly impossible for a small business to recoup the amount, especially given the low profit margins in the food business.

You should also take a look at the application form for beverage licenses. It’s more than 15 pages. The state wants to conduct an investigation into your personal background as if you were applying for clearance to a top secret Pentagon or CIA post.

Your finances from more than 25 years ago are part of the application process. Like FBI investigations, they want to know the names of persons you’ve known for most of your life. Obscure facts and figures from years past.

What does any of this have to do with running a responsible food and drink establishment? Getting a mortgage today is easier by comparison. I’d happily submit to the same scrutiny that banks and mortgage lenders use today to qualify borrowers.

But the state of Montana, in its ridiculous and anachronistic paternalism, wants more. And I, for one, have given up. Adios, job creation. Adios, taxes and fees to the General Fund.

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