Change to New Mexico liquor law 'wildly successful' for businesses

·3 min read

Aug. 9—A little more than a year after a new law allowed New Mexico's small restaurants to buy liquor licenses to boost business, the head of the department overseeing the transition told lawmakers it has been "wildly successful."

Andrew Vallejos, director of the Alcoholic Beverage Control Division of the state Regulation and Licensing Department, said the new law "may have given [restauranteurs] additional ways to stay afloat."

He said his agency had approved 125 new liquor licenses under the revamped system, which was signed into law by Gov. Michelle Lujan Grisham in 2021. Another 30 applicants are pending approval, according to a report Vallejos supplied to members of the interim Economic Development and Policy Committee on Monday.

The law's passage last year was the first major liquor law revision in decades. It was hailed as a game-changer by proponents who said New Mexico's liquor licensing template was archaic and unfair. Over time, they said, small numbers of license holders ended up creating a monopoly as they leased and traded a limited number of state liquor licenses for figures around topping the $400,000 mark.

Some restaurants are now able to purchase liquor licenses from the state for as little as $1,550 or as much as $10,000 per year. The new law also permits home delivery of alcohol with food orders from eateries.

Advocates for the changes said the new system offers a more even playing field for restaurants battered by the coronavirus pandemic.

Many longtime liquor license holders have complained the new, less expensive fees would drive down the value of their licenses.

That appears to be true to a small degree. Vallejos told committee members that based on preliminary data, the average price for those licenses before the new legislation took hold was about $318,000. Now it's closer to $275,000, he said.

Vallejos added some of that drop may be due to license brokers who are underselling licenses as they wait for the new market to gain a foothold.

"We didn't see the [liquor] licenses go down to zero," he said. "If you bought a license for $300,000, you could probably sell it for $300,000."

Monday's meeting, held at the University of New Mexico campus in Gallup, was set against the backdrop of last week's drunken-driving incident in which a motorist plowed into a ceremonial parade in the town, injuring at least 15 people.

Jeff Irving, 33, was arrested and faces charges that include aggravated driving while intoxicated, fleeing from officers and injuring parade-goers and two Gallup police officers who tried to stop the vehicle, court documents said.

Though no one was killed, several lawmakers on the committee said the incident speaks to New Mexico's troubled relationship with alcohol.

State residents die of alcohol-related causes at nearly three times the national average, higher than any other state, according to a recent New Mexico In Depth series Vallejos and several lawmakers cited during Monday's hearing. In 2020, alcohol killed 1,878 people, though not all because of drunken driving accidents.

Rep. Antonio "Moe" Maestas, D-Albuquerque, said lost in the dialogue about the economic impact of the new legislation — which he co-sponsored — is "the high social price alcohol brings."

Sen. Ron Griggs, R-Alamogordo, who also supported the new license legislation, said, "We have a problem with people willing to drink and drive." He added lawmakers are "going to have to come up with some real solutions for that ... to make sure people aren't driving when they shouldn't."

Though the legislation in question — House Bill 255 — initially started as a push to allow businesses to deliver alcohol to customers during the pandemic, Vallejos said few restaurants have taken advantage of that option.

"We haven't seen a massive growth in delivery," he said, adding his agency had only issued 39 delivery licenses to date, most to "mom-and-pop" businesses and pizza restaurants.