License to Sell

New Mexico's liquor laws create obstacles for new businesses

The person: Chris Campbell is a bartender and waiter at Santa Fe landmark Del Charro Saloon, but he has also bartended in neighboring states where liquor licenses are vastly cheaper—making those states more hospitable to bars and music venues.

The plan: Bring down the state’s sky-high liquor license prices by making more licenses available or by making existing licenses harder to lose.

How it works: Currently, there’s 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.

"I have friends that researched possibly opening a [liquor] store in New Mexico or in Santa Fe proper, and when they did their research, they found out they could get a liquor license in Texas for literally a small fraction of what it costs here," Campbell says.

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.

"If you go to Denver, for instance, you'll find a lot cheaper drink prices," Campbell says. "There's such a limit of these licenses. That's why they're so expensive."

In addition, the third-party liability laws in New Mexico mean an establishment can lose its license by serving an intoxicated person. Once a license is revoked, it is removed from the system, rather than sold to a new business.

“I’ve worked in states—like Texas, [which] does have a similar third-party liability [law]—but working at big cities in Texas is different from working in a small town here,” Campbell says. “Ideally, I would like to see personal responsibility versus third-party liability.”

Bottom line: High liquor license prices don’t just affect businesses that serve alcohol. They also create a domino effect by depleting nightlife and creating fewer opportunities for businesses to open.

"Obviously, we need more bars to open up," Campbell says. "We're losing so many good bars, and they don't seem to be being replaced. Just recently, the one nightclub went out of business and two good concert venues, Corazón and Tin Star, we lost. It makes less people go out—more people will go up to Buffalo Thunder, where they have several bars under one roof, or they'll go down to Albuquerque."

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