Liquor discounts on the way as BPW approves settlement

By Andy Rosen
Andy@MarylandReporter.com

A federal court decision to toss Maryland’s system of alcohol price regulation became final Wednesday, as the Board of Public Works agreed to pay $200,000 to put a decade-old dispute to rest.

The decision means liquor wholesalers will likely begin offering volume discounts to larger retailers, which some smaller stores believe will undercut their prices.

The three-member state spending panel also approved an up to $99 million extension of the contract with the company that runs information technology for the State Lottery Agency.

The BPW voted unanimously to accept a settlement between Comptroller Peter Franchot’s office and the company that owns Beltway Fine Wine and Spirits in Towson. The state has agreed not to continue its challenge of a 2004 decision to throw out laws that prevented liquor retailers from getting volume discounts.

The alcohol settlement sends $200,000 in legal fees to the company, which it will then donate to a charity involved in alcoholism treatment. The BPW, comprised of Franchot, Gov. Martin O’Malley and Treasurer Nancy Kopp, voted unanimously to pay the money, even though they weren’t required to. There was a provision in the settlement that said the company would accept whatever the BPW offered, even nothing.

The next step in Maryland’s appeal based on antitrust rules would have been to the U.S. Supreme Court.

Lottery officials say the extension of the information technology contract brings in about $1.6 billion in yearly revenue for the state. Robert Howells, the agency’s director of procurement, said this week that the deal includes all of the terminals that sell lottery tickets, the Keno system, the computers that track scratch tickets and the satellite dishes that allow different parts of the system to connect. It does not cover the slot machines the agency will purchasing.

The extension came on top of an $81 million agreement that’s set to expire next June. The contractor, Georgia-based Scientific Games International, has been working under that deal since 2005.