1973]                   OF THE HOUSE OF DELEGATES                       17

Annapolis, Maryland, June 1,1973.

Honorable Thomas Hunter Lowe
Speaker of the House of Delegates
State House
Annapolis, Maryland

Dear Mr. Speaker:

In accordance with Article II, Section 17, of the Maryland Constitution,
I have today vetoed House Bill 678.

House Bill 678 would have the effect of establishing minimum prices
for all alcoholic beverages sold at retail in this State by prohibiting their
sale for less than the cost to the retailer plus a specific markup to cover
the "cost of doing business". In the absence of proof that the cost of
doing business is less, the bill would require that the markup be no less than
12% of the cost of the alcoholic beverage to the retailer. The stated legisla-
tive intent of House Bill 678 is to eliminate price wars which unduly
stimulate tire sale and consumption of beer, wine and liquor, to bring
about the orderly sale and distribution thereof, and to foster and promote
temperance. The bill exempts from its coverage alcoholic beverages sold by
or purchased from a Liquor Control Board which buys directly from a
manufacturer.

House Bill 678 represents the third attempt in recent years to establish
minimum markups for alcoholic beverages sold in this State. Governor
Tawes vetoed the two prior measures on the basis that the establishment of
minimum prices for alcoholic beverages had no relation to the stated legis-
lative objectives. Governor Tawes also questioned the propriety of legisla-
tion which would promote the interest of the small liquor dealer at the ex-
pense of the vast majority of citizens.

I share the same concerns expressed by Governor Tawes. The legislative
objectives of House Bill 678 are all laudable and I support them; however,
there is no credible evidence to demonstrate that the substantive provi-
sions of this bill will lead to the attainment of those objectives.

The liquor industry is a competitive one, particularly for the small
retailer, but there is no evidence that the industry has been subjected to
ruinous price wars or that this bill will lead to the orderly sale and distri-
bution of alcoholic beverages. Moreover, there is no evidence that price
wars, in any event, serve to stimulate the consumption of liquor or that
higher prices foster and promote temperance. The New York State More-
land Commission on the Alcoholic Beverage Control Law, after an ex-
haustive study of the effects of a minimum price law in New York,
found that artifically maintained prices enforced by the State "had no
significant effect upon the consumption of alcoholic beverages, upon tem-
perance or upon the incidence of social problems related to alcohol."

Additionally, I question the propriety of requiring consumers to pay
higher prices in order to regulate the retail liquor industry. Such a procedure
is particularly inappropriate in light of the present economic situation.
Given the recent dramatic increases in consumer prices, there is little justi-
fication for governmental action which would result in even higher prices.

I am also concerned about the uneven application of House Bill 678.
The bill exempts from its coverage "beer, liquor and wine sold by or
purchased from a Liquor Control Board that buys directly from a manu-
facturer." As a practical matter, this exemption applies only to one county