Locally-owned restaurants are having a hard time competing with chain operations, some say because of the high price of liquor licenses.
The state Economic and Rural Development Committee met at New Mexico State University-Alamogordo’s Rohovec Theatre Tuesday where they discussed liquor licenses and sales in New Mexico.
“Restaurants are a large part of the economy of our state with over 5,000 eating establishments, restaurants contribute 11 percent towards the economy and employ over 100,000 people,” Owner and CEO of Home on The Range and DiGregory Brothers Inc. Matt DiGregory said.
DiGregory said that he owns multiple liquor licenses valuing close to $2 million with a debt service of $1.2 million DiGregory said. He would like to see licenses become more affordable.
“My beer and wine locations are all in direct competition with chain restaurants,” DiGregory said. “Those chain restaurants usually have corporate offices out of state.”
Another issue is customers wanted to drink while dining.
“I get people who are not inclined to eat at my establishment if we don’t serve liquor and it’s not just because that’s what they want to come in to do,” Russell Hernandez, owner of Salud! de Mesilla Restaurant and The Thyme of Your Life Inc. said. “They just want to come in and enjoy a martini or a margarita while they’re having their dining experience. Of course, we can’t offer that. We offer a wine-based spirit. But it doesn’t have what a lot of people are looking for.”
When Hernandez got a beer and wine license his sales started going up, he said.
The process took 120 days just to get started and cost $350,000 which was more than his start-up costs, Hernandez said.
A solution may be in the works at the state legislative level in January.
State Sen. Ron Griggs, R-Dist. 34, presented two bills at the meeting that he is planning to put before the legislature in January about the state’s liquor licenses.
These bills are discussion drafts that currently do not have assigned numbers.
One of them would add a new type of restaurant license that allows the sale of alcoholic beverages with food in restaurants and applicable fees for such a license and the other bill concerns sale options for a licensee should the licensee transfer out of a local option district.
The new type of liquor license for restaurants would be enacted by holding an election or by resolution adopted by the local option district’s governing body without holding an election.
A local option district is a county or incorporated municipality; a municipality within a county that has done so; or an incorporated municipality with a population of more than 5,000 that has independently approved the sale, serving or public consumption of alcoholic beverages.
Once the election or resolution are enacted, a type A restaurant license, which is currently available, shall permit the sale of beer and wine and the new license, type B, will permit the sale and service of alcoholic beverages.
The new license, type B, will cost $20,000 initially and $1,300 to renew.
If the legislature approves the bill, it will be enacted July 1, 2019. The legislative session begins Jan. 15. Legislation can be pre-filed starting on Dec. 17.