Day 16: End Liquor License Larceny

According to the Santa Fe Reporter:

Currently, there are a set number of liquor licenses available in New Mexico, based on the principle of one license per 2,000 people. That restriction dates back to post-Prohibition times. Beer and wine licenses for restaurants are separate, and there are different prices for bars than for retailers selling packaged alcohol.

Because of the limited number of licenses, they commonly go for $500,000 a pop or more-a prohibitively large sum for would-be new business owners.1

The article goes on to note that:

According to the Texas Alcoholic Beverage Commission website, a two-year packaged liquor retailer in Texas pays $1,500. By contrast, a recent packaged liquor license sold in New Mexico cost $750,000, according to the New Mexico Alcohol and Gaming Division. Retailers and bars pass that price on to consumers.2

All New Mexicans understand that the state has had and continues to have serious problems with alcoholism and drunk driving. On the other hand, our current licensing laws are extremely arbitrary and are not designed to address the real issue of problem drinking.

The current environment creates artificial scarcity and limits the ability of those of modest means to involve themselves in the business of serving liquor. In other words, it creates a cartel run by those who can afford to invest outrageous sums in liquor licenses. Current law, therefore, penalizes small businesspeople and their potential employees.

Rather than limiting liquor licenses based on an arbitrary population number in a way that has caused tremendous price inflation, New Mexico legislators should consider regulatory changes designed so the number of licenses enables their price to reach a market price similar to that of one or more surrounding states.


1Wren Abbott, “License to Sell,” Santa Fe Reporter, March 14, 2012, http://www.sfreporter.com/santafe/article-6618-license-to-sell.html

2Ibid.


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10 Replies to “Day 16: End Liquor License Larceny”

  1. Paul:

    This is an outstanding series. It really provides an agenda or guide for lawmakers to follow to minimize unnecessary or harmful regulations on businesses in New Mexico. I hope that it gains some traction.

    At some point, I hope that we can also pursue an agenda for the elimination of duplicative or unnecessary governmental agencies!

    Cheers!

  2. Paul
    I will soon introduce a bill that addresses this issue. It has quite a few moving parts because the issue is pretty complex. Please watch for it.
    Ron Griggs
    NM State Senator
    District 34

  3. This continues to be a major problem prohibiting New Mexicans from competing for tourist dollars with our surrounding states. It also prohibits New Mexicans from enjoying congenial social interactions with each other since it is too expensive for business owners to provide enticing entertainment establishments for the general populace outside of urban centers where mega chains like Wild Wings and others can capture all the licenses. As one of the poorest states in the nation, our antiquated liquor laws hurt most of those living here and only benefit a few.

  4. OK. We made it into the union. There is a star on the flag, so the temperance lobby can no longer prohibit our entry into the USA. Oh wait, wasn’t prohibition repealed? Why is this archaic law still on the books?

    Needless to say it is still a major problem for those of us that are trying to grow our communities and are close to Texas, Arizona, or Colorado. Why even consider New Mexico vs. Texas when cost of a typical chain restaurant is increased from $3.5 million to $4.1 million for a small NM franchisee or local restaurant owner? In Texas their licenses go for $1,500. Colorado sells theirs for up to $2,500. By its goofy system, New Mexico artificially keeps their supply low by having both a set amount and unfair portability rules. This, like most of our woes here, is a self-inflicted gunshot wound that our Albuquerque-based legislators have no interest in changing.

    It’s not like it is a water right tied to a tangible resource and needing oversight. This rule makes no sense. We have this restrictive law, yet our alcohol and dui woes are greater per capita than many other states with more fair liquor laws.

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