alcohol

Colorado Governor Hickenlooper Overturns Low-Alcohol Ban

by Michelle Minton on May 18, 2011

in Personal Liberty, Politics as Usual

On Friday the 13th, just before happy hour, Colorado’s Governor John Hickenlooper signed into law a bill that reversed the only victory in years for those fighting to get full-strength beer in grocery and convenience stores.

Governor Hickenlooper’s intentions aren’t malicious. A former brewer, Hickenlooper is simply trying to preserve the system that his craft brewing constituents assert creates the best environment for craft beer. That system divides beer into two categories: low-alcohol or 3.2 beer, which grocery stores and convenience stores may sell, and high-alcohol beer, anything above 3.2, which liquor stores, bars, and restaurants may sell.

As I have written before, the craft brewers are mistaken in their assumption that grocery store sales would have a negative impact on craft beer in Colorado. And even the liquor stores, who assert that grocery store sales of beer would put them out of business, could thrive in a liberated market.

Grocery and convenience stores backed by consumers who want cheaper more convenient options have asking year after year for the state to have one definition for beer and to allow beer to be sold, regardless of the alcohol content, in grocery, liquor, and convenience stores, as well as bars and restaurants. Yet, for at least four years running, all the bills introduced in the state legislature to change the beer regulations have been knocked down. Until last year.

Frustrated with yet another failed attempt, proponents of “real beer” in grocery stores had an ally in the state legislature attach an amendment to another bill, which passed, forcing the state to begin enforcing all of its liquor laws to the letter. What this meant, in effect, was that bars, restaurants, and taverns were banned from selling low-alcohol beer. Though the rule had been on the books for a long time, the state had never enforced it.

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Alcohol Regulation Roundup: Fat Tuesday Edition

by Michelle Minton on March 8, 2011

in Deregulate to Stimulate, Economy, Nanny State, Personal Liberty

Post image for Alcohol Regulation Roundup: Fat Tuesday Edition

Happy Fat Tuesday, everyone! While you enjoy that frosty alcoholic beverage, enjoy this latest round of alcohol-related regulatory actions throughout the nation:

Colorado: Colorado Gov. John Hickenlooper is feeling the heat after his office issues an “executive fiat” overturning a law that prevents restaurants and bars from selling low alcohol beer. The bill, which was passed last year, forced the state to abide by the rule already on the books that states only grocery and convenience stores may sell low-alcohol beer. As a result, many light and low-alcohol Irish Stouts were prohibited from being served in bars. The bill was an attempt by grocery and convenience stores to draw attention to the need to do away with the distinction between low and higher alcohol beers and allow all stores to sell full strength beer. Hickenlooper, a former microbrewer, said that his office was involved in the surprise rules issued by the Division of Liquor Enforcement that overturns the ban on low-alcohol beer in restaurants.

The grocers and convenience stores said they were stunned by the abrupt repeal of rules that had taken months to hammer out.

Just a few days after the governor’s move, lawmakers announced that they will hold special hearings today (March 8, 2011) to review his actions.

Rep. Larry Liston, R-Colorado Springs, chairman of the House Economic and Business Development Committee, and Rep. Brian DelGrosso, R-Loveland, chairman of the House Finance Committee, will hold a rare joint hearing of their committees today. Liston said lawmakers want to understand how the rule change occurred and for what purpose.

While Hickenlooper takes his licks, St. Patty’s day revelers will have their Irish Stouts, and the issue of full-strength beer in grocery and convenience stores is likely to return to the legislature.

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CEI Podcast — December 15, 2010: Alcohol Regulations Across the Country

by Ryan Young on December 15, 2010

in Nanny State, Personal Liberty, Podcast, Regulation

Have a listen here.

Michelle Minton, CEI’s Director of Insurance Studies, takes a whirlwind tour of alcohol regulations across the country. From Pennsylvania to Texas to Colorado, there are regulations at every turn. They do everything from raise revenue to tell people what products they can buy at what times, to shelter politically favored companies from pesky competition. In this way, alcohol is like most other sectors of the economy.

Alcohol Regulation Roundup

by Michelle Minton on December 13, 2010 · 5 comments

in Nanny State, Personal Liberty

As alcohol regulations vary state-by-state and constantly shifting here is a quick roundup of booze news from around the states:

In federal news, following the FDA crackdown on alcoholic energy drinks, the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a statement clarifying its role in the regulation of such products.

In Pennsylvania, a state Supreme Court ruling upheld the right of Wegmans grocery store to sell beer at several of its locations throughout Pennsylvania, a notoriously strict alcohol-control state. The ruling found that the state liquor control board was in the right when it issues licenses to the grocery chain to sell beer so long as the store has a restaurant with seating for 30 or more, a food menu, and a minimum of 400 square feet. The Malt Beverage Distributors in the state are, predictably, unhappy with the ruling.

In other “dumb Pennsylvania liquor news” (I weep for my home state), the wine kiosk program gets some undesirable, but well-deserved derision from Wired magazine. Rather than allowing adults to purchase wine in grocery stores, the state has devised a “technological workaround” by placing kiosks in select stores that carry a limited variety of wines for purchase… if you can make past the “kafka-esque security measures”:

Each machine is connected to a state employee in Harrisburg, via video-camera. A customer chooses their wine, swipes their ID, puffs into a breathalyzer and faces the camera. The state employee checks that the ID matches the person and, if they’re not already intoxicated, the person is allowed to buy the wine.

Or you can just do your shopping in Delaware, New Jersey, Maryland, New York, West Virginia, or Ohio (whichever border state is closest).

In Texas, there’s talk of raising the excise taxes on beer: 19 cents to 35 cents per gallon of beer. Charles Hodges, CEO of Stop DWI, Inc., is pushing for the tax increase as he believes the additional $4 million a month from beer taxes would plug the holes in the state’s budget.

In Colorado, the newly elected governor, John Hickenlooper, gives those pushing for full-strength beer in grocery stores little hope. Despite the fact that Colorado’s zany liquor laws have resulted in bars and restaurants being banned from selling low-alcohol beer, Hickenlooper indicated he likes the status quo and doesn’t want to legislate “something that the small breweries think will put them at a disadvantage.” But grocery and convenience stores plan on trying again anyway, for a fourth time, to amend the state’s outdated laws and get full-strength beer on their shelves.

Ari and Lin Armstrong have a great piece in the Grand Junction Free Press on why it is finally time for a free beer market in Colorado.

In Illinois, Crain’s Chicago Business released their investigative report that shows big distributors of beer are employing illegal pay-to-play tactics and shutting out craft brews from the Chicago beverage market. In Chicago, like most cities in the U.S., brewers and bar/restaurant owners can’t deal with one another directly; they are forced by law to operate through a middleman called a distributor or wholesaler. The distributor takes on a portfolio of beers and then sells them to bars and restaurants. The revealing study shows why we should abolish the mandatory three-tier system, which requires the use of a distributor and establish the right for breweries, vineyards, and distilleries to directly ship their products.

In Tennessee, regulators are getting wise to the unintended consequence of their out-dated laws that limit the alcohol by volume of beer sold in grocery store to brew under 6.3 percent abv when border-state Georgia allows beer up to 14 percent abv.

In Maryland, wine and beer “enthusiasts” are set to introduce a proposal in several Maryland counties that would overturn a law that prevents patrons of restaurants with liquor licenses from bringing in their own wine. “Corkage,” as it is called, is the fee a customer pays to the restaurant for each bottle consumed by the diners that was not purchased at the restaurant. Corkage proponents want to make it so that even at non-BYOB establishments they can bring their own bottles to the table. The proposal may be considered by the Maryland General Assembly after January 12.

In West Virginia, legislators affirm that increasing alcohol taxes is not on their agenda. According to Delegate-elect Eric Householder, a Republican out of Jefferson County:

We’re back to the point of government taking care of everything for everybody … I have a litmus test … I’ve taken the Taxpayer Protection Pledge, I’ve put myself out there that I would not raise taxes. So I’m going to have a litmus test. Does this increase taxes? Does this increase government intervention? Is this an expansion of government? If I can answer yes to any one of those, obviously it’s legislation that I would not pass.

In Michigan, despite the un-banning of Sunday sales in the state (kind of), several counties intend to continue disallowing Sunday sales until noon or for the entire day.

Small Brewers’ Big Mistake in Colorado

by Michelle Minton on December 8, 2010 · 1 comment

in Deregulate to Stimulate, Economy, Nanny State, Personal Liberty

In Colorado, the only place one can purchase alcoholic beverages over a strength of 3.2 percent alcohol by volume to take home is in a licensed liquor store. This is something that grocery store owners and beer lovers have campaigned for over the course of several years without any success. In February of this year, the latest attempt to allow full-strength beer in grocery stores died in committee. But proponents aren’t going away. The Colorado legislature is likely to take up the issue in the next session, in part due to public outcry.

After a bill that would allow full-strength beer in grocery stores died in committee, proponents of the bill were successful in amending a bill that would force the state to enforce the letter of the liquor law. That letter, as it turns out, means that light beers under 4 percent abv cannot be lawfully sold by bars and restaurants in the state. Colorado lawmakers will likely address the grocery store beer issue when they seek to amend the state law that has two definitions for beer depending on the alcohol content.

Opponents of full-strength beer in grocery stores

The most fervent opposition, unsurprisingly, has come from the liquor store owners who want to protect their monopoly on the sale of full-strength beer. What is surprising is that the loudest and perhaps, most effective opposition is coming from small brewers in the state. Colorado, which hosts the Great American Beer Festival, is thought of as one of the most vibrant craft brewery scenes in the nation. Small brewers fear that the “big beer” companies will strike deals with grocery and big-box stores, keeping craft bottles off the shelves. At the same time they worry that customers who purchase beer at grocery stores will no longer visit liquor stores, which in turn might drive the stores out of business for lack of customers, leaving small craft brewers with no place to sell their product.

Small craft brewers have it all wrong

First, allowing more places to sell beer will not result in disappearing shelf space; it will only increase the likelihood and opportunity for small breweries to get their products in front of new customers. Even if grocery stores do decide to exclusively stock mass-produced beers, liquor stores will become a haven for the ever growing craft beer market. If liquor stores decided to specialize their beer selection to local and craft beers, this would actually result in increased shelf-space for microbrews in the same establishments where they previously had to compete with the “big beers”.

Second, that Colorado has a vibrant craft brewery scene is undeniable. However, this variety is not due to the lack of availability of beer in grocery stores. Many states around the nation allow beer to be sold in grocery and convenience stores and they arguably have a more vibrant beer scene than Colorado.

One can use many characteristics to base a determination of what makes a good beer scene, but let’s just look at the distribution of breweries and brewpubs, large and small, in relation to states populations and their treatment of beer sales.

Lug Wrench Brewing Company Online did an analysis of the concentration of breweries in each state, compiled using the U.S. Census Bureau estimates for population in 2009.  Here we can see that Colorado is not even one of the nation’s top five states with the highest concentration of breweries:

  1. Vermont: Vermont, which allows for the sale of beer in grocery stores, had the highest concentration with 2.734 breweries per 100,000 residents. According to Beer100.com of the state’s 17 breweries, microbreweries number at 5.
  2. Oregon: Oregon also allows beer sales in grocery stores and has a concentration of 2.640 breweries per 100,000 residents. Of the state’s 101 breweries and brewpubs, 10 are microbreweries.
  3. Montana: Montana also allows the sale of all beers in grocery stores  (though it caps the alcohol to a max of 14 percent abv).   Montana has an average of 2.564 breweries per 100,000 residents. Of the 25 breweries and brewpubs 13 are microbreweries.
  4. Maine: Maine also allows the beer to be sold in grocery stores and has an average of 2.503 breweries per 100,000 residents. Of the state’s 33 breweries and brewpubs 9 are microbreweries.
  5. Alaska: Which also allows the sale of beer in grocery stores has an average of 2.148 breweries per 100,000 residents. Of its 15 breweries and brewpubs 7 are microbreweries

Colorado came in at #6 with an average of 2.070 breweries per 100,000 residents. Of the state’s 104 breweries, only 13 are microbreweries.

More shelf space for all

While there are many factors that play into the number of breweries in an area and microbreweries, limiting sales to liquor stores clearly does not correlate with a higher concentration in any given state. Allowing beer in grocery stores will simply open up more shelf space for small brewers in the state, not less.  Even if grocery stores choose to only stock the most popular beers, it will not erode the increasing contingent of craft beer lovers who will continue making trips to liquor stores. Smart liquor store owners will recognize the opportunity to capture the craft beer drinking market, and reduce their stock of popular beer and create more shelf space for craft beers. The result is cheaper popular beer in grocery stores and more opportunity for craft brewers in liquor stores. Small brewers should welcome the deregulation of liquor sales and fight for new avenues for liquor sales whether that is grocery stores, bars, or direct sales.

Sunday Brunch in New York City

by Nicole Ciandella on December 3, 2010

in Culture, Nanny State, Personal Liberty, Regulation

You can find a lot in New York City that you can’t find anywhere else in the world. But if you’re in New York and all you want is a Bloody Mary with your Sunday morning brunch, I’m afraid you’re out of luck: New York State law forbids the sale of alcohol before noon on Sundays.

That’s right: if you go to brunch at 11:30 a.m. on a Sunday morning at a New York City restaurant—no cocktails for you!

If I seem a little angry, that’s because I am. I spent Thanksgiving weekend in New York with my family, and on Sunday morning—before I boarded a train back to D.C.—my parents took us to a small Italian restaurant for brunch. The prix fixe menu included a choice of a Bloody Mary, Bellini, or Mimosa; but when I tried to order my drink, the waiter gave us the bad news: he couldn’t legally serve liquor for another hour.

Many parts of the U.S. still enforce Blue Laws despite First Amendment objections to Sunday-specific regulations. Several states still limit Sunday alcohol sales (both for on and off-premises consumption), and some states have bans on Sunday hunting and Sunday car sales.

The New York ban on serving alcohol before noon on Sundays is, in my opinion, an arbitrary (and frustrating!) infringement on people’s right to enjoy the long-standing American tradition of Sunday champagne brunch. But more importantly, the law is robbing restaurant owners of potential revenue. New Yorkers who eat before noon on Sundays are spending less on brunch than they might if cocktails were available; and those who eat after noon are competing for tables in the artificially-condensed time-frame when the bar is allowed to open. Last Sunday, when I was denied a Bloody Mary at 11 a.m., I suddenly realized why the restaurant was so empty. On Thanksgiving weekend, as tourists swarmed the streets of New York looking for ways to drop their hard-earned cash, waiters at brunch restaurants were looking at empty tables, counting down the minutes until the 12:00 rush.

Frankly, it’s hard to believe that New Yorkers are putting up with this. Maybe it’s because they all sleep late on Sundays. Or maybe they’re growing used to life in the Nanny State: after all, this is the city that has recently declared war on salt, trans fats, smoking, soda, and alcoholic energy drinks.

If New York doesn’t come to its senses soon and shrug off the mantle of Big Apple Government, the city may have to rebrand itself. Old New York was Dustin Hoffman pounding on a cab yelling, “Hey, I’m walking here!” New New York is all about yielding. Frank Sinatra sang of New York, “If I can make it there, I’m gonna make it anywhere!” But as New Yorkers continue to be coddled by their Mommie Dearest elected officials, they may find it hard to “make it” anywhere with trans fats or—horror of horrors—smoking in public parks. The rest of America is drinking mimosas with their Sunday morning brunch while New Yorkers are drinking plain orange juice—and New Yorkers aren’t really complaining.

Maybe waking up in the city that never sleeps isn’t all it’s cracked up to be—at least, not if you wake up before noon on Sundays.

Photo Credit: Williac’s Flickr Photostream.

CEI Podcast — November 23, 2010: The Crusade Against Alcohol Energy Drinks

by Ryan Young on November 23, 2010

in Nanny State, Personal Liberty, Regulation

Have a listen here.

Baylen Linnekin, author of the recent CEI On Point “Extreme Refreshment Crackdown: The FDA’s Misguided Campaign Against Alcohol Energy Drinks” and contributor to the food regulation blog Crispy on the Outside, looks at the recent push to ban alcoholic drinks that contain caffeine.

Baylen believes that regulators are over-reacting. Alcohol energy drinks typically contain no more caffeine than a cup of coffee, and their appeal to underage drinkers is overstated.

Four Loko: Just How Potent is the Caffeinated Alcoholic Drink?

by Greg Conko on November 19, 2010

in Nanny State, Personal Liberty, Precaution & Risk

Over the past few days, I’ve gotten plenty of angry e-mail from people critical of my defense of caffeinated alcoholic beverages like Four Loko, Joose, and Hard Wired.  Typical claims are that, “if it was [my] son or daughter ending up in emergency with a (sic) overdose of alcohol it wouldn’t be opposition to ban it,” and that “Your disgusting and your barely disguised right wing industry front is pathetic”.  My favorite, though, is, “I hope one of YOUR kids or family members dies from it, see how you feel.”

You might think that, boy, these products must really be awful to elicit that kind of a response — a message that the prohibitionists very definitely want you to get.  But just how potent IS a typical Alcohol-Energy Drink like Four Loko?  Let’s have a look.

A 23.5 oz can of Four Loko has 156 mg of caffeine.  You might think, “Wow!  What kind of caffeine-induced buzz is that going to get you?”  About the same as in a small/tall (8 oz cup) Starbucks coffee (160 mg).  By 7:30 this morning, I had already had nearly twice as much caffeine from my daily coffee.  The prohibitionists also like to point out that a 23.5 oz can of Four Loko has twice the caffeine as a can of Red Bull (76 mg).  But what they neglect to say is that Red Bull comes in 8.2 oz cans, which means that they’re just 1/3 the size and have about 50 percent more caffeine per unit volume.

Of course, there’s also the alcohol.  Four Loko is 12 percent alcohol by volume, which amounts to the equivalent of four to four-and-a-half typical American-style pilsner beers, such as Budweiser, Coors, and Miller, with approximate 4.8 to 5 ABV.  Still, ounce for ounce, you get about 50 percent more caffeine and about the same amount of alcohol in a vodka and Red Bull cocktail (8.2 oz of Red Bull plus a 1.5 oz shot of 80 proof spirits).  And you get about three times as much caffeine and about the same amount of alcohol in a cup of Irish coffee made by mixing a tall Starbucks coffee with a 1.5 oz shot of 80 proof spirits.

In order to conclude that AEDs are worse, you have to buy the notion that your typical partying teenager or young adult would stop at just one or two vodka and Red Bulls.  But actual observation of the wild college partier or young professional in his natural setting indicates that that’s a pretty far-fetched assumption.  So, it’s not remotely clear that there is anything uniquely unsafe about AEDs.  Nor do I believe that a ban on AEDs will do anything at all to stem the genuine problem of alcohol abuse among teenagers and young adults.  Indeed, to the extent that some AED consumers may revert to the vodka and Red Bull alternative, the AED ban could have negative public health consequences because the far higher level of caffeine in those self-mixed or bartender-mixed cocktails would be more likely to mask the effects of intoxication.

Perhaps more serious, in my view, is the fact that many of the activist organizations intimately involved with the movement to ban AEDs (led by the Center for Science in the Public Interest) began this fight to regulate caffeine, long before there was an AED market, by attacking non-alcoholic energy drinks like Jolt Cola, Red Bull, Monster, and Rock Star.  They’ve even been highly critical of Starbucks coffee for its caffeine content.  And the exact same legal rationale that the FDA used to ban AEDs (i.e., that FDA has not approved caffeine used as a food additive as GRAS for any use but in “cola type drinks,” making the addition of caffeine to malt beverages presumptively unsafe) could just as easily be applied to non-alcoholic energy drinks.  I fear, and with good reason I would argue, that we haven’t seen the last of FDA’s enforcement activity against caffeinated beverages.

Image credit: The Wisest Wizards’ flickr photostream.

Four Loko Crackdown: FDA Set to Ban Caffeinated-Alcohol Drinks

by Greg Conko on November 17, 2010 · 1 comment

in Health and Illness, Legal, Nanny State, Personal Liberty, Precaution & Risk, Regulation, Zeitgeist

So, it looks as though the FDA is now set to ban the small but growing market for so-called alcohol-energy drinks, such as Four Loko and Joose. CEI wrote about the issue back in May of this year and explained that the move is an arbitrary extension of FDA authority based on irrelevant science at the behest of grandstanding state attorneys general and pro-regulation activist groups.

As food and beverage law expert Baylen Linnekin wrote in a CEI OnPoint, “The agency’s campaign against alcohol energy drinks (AEDs) … is based on research unrelated to AEDs and targets products the FDA should classify as generally recognized as safe. With more than 100 years of historical evidence that consumers can safely consume caffeine and alcohol together, the FDA should not stand in the way of adults’ drink choices.”  Most of the scare stories and essentially all of the research on the alleged abuse of caffeine-alcohol drinks are based, not on commercial pre-mixed AEDs, but on self-mixed or bartender-mixed drinks like vodka-and-Red Bull or JaegerBombs (see here, here, here, and here, for example).  Nanny State activists are simply extrapolating the findings of this research to pre-mixed AEDs because, as commercial products, they are more susceptible to regulation.

As it turns out, the FDA’s central legal objection to AEDs, and the source of its authority to ban the products, is not merely the mixture of alcohol and caffeine, but the addition of caffeine to nearly any food or beverage at all.  Currently, it is legal for the makers of commercial products to add caffeine only to “cola type beverages”, which means that the FDA could use its authority to ban countless other, much more common products, from Mountain Dew and Dr. Pepper to an array of popular candies and snacks that currently contain added caffeine.  Worse still, one of the lead campaigners against commercial pre-mixed AEDs has also suggested forbidding bartenders from selling their own caffeine and alcohol concoctions, which would wipe out not only vodka and Red Bull mixes but even the popular Rum-and-Coke and Irish coffee.

Of course, it’s easy to single out a small, politically incorrect product class.  But it’s pretty clear that young adults aren’t going to stop getting their kicks from the combination of caffeine and alcohol as long as those other products are so freely available.  So, the ban on Joose and Four Loko won’t solve any of the alleged problems associated with caffeine’s tendency to mask the intoxicating effects of the alcohol.  It is not reasonable to believe that banning AEDs would have any measurable effect on drinking or drunkenness, especially given the ubiquity of self-mixed cocktails combining alcohol and energy drinks.  The campaign against AEDs is therefore wasteful and misguided, and our national nanny will simply be removing one beverage option that some consumers seem to enjoy.

As my colleague Michelle Minton put it last week, “Product Bans Are More Dangerous than Four Loko.”

Non-Partisan Victory: Dallas Eliminates “Dry” Areas

by Angela Logomasini on November 5, 2010

in Nanny State, Personal Liberty

Cheers to Dallas voters who supported an initiative to eliminate “dry” areas (aka areas where alcohol was completed banned) of the city, which passed with a large majority. What’s most amazing about this vote is the fact that such dry areas even exist in the 21st century! Hooray for Dallas voters for supporting freedom on this one. Now other parts of the country need to revisit these arcane, nonsensical regulations! Check out the list of “dry counties” on Alcohol Problems and Solutions — a great site worth browsing.

Image credit: Jeff Daly, dalydose photostream on Flickr.

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