beer

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.

Alcohol Industry Infighting Leads to Wacky and Costly Regulation

by Angela Logomasini on November 22, 2010

in Nanny State, Personal Liberty

If the ban on alcohol-containing energy drinks tells us anything, it’s that American alcohol policy continues its tradition of being very wacky. If you need more examples see Enobytes: Top Ten Wackiest Wine Laws.  And not all of this dumb regulation is old. These days, it’s hard to find a public park with you can enjoy a glass of wine at a picnic, as many have recently banned this “egregious” activity.

Such anti-consumer regulations are advanced for a number of reasons. Blogger Tom Wark points out that the absence of a consumer advocacy organization has led lawmakers to simply serve special interests at the expense of consumers. Another key problem is that various parts of the alcohol industry work at odds. This situation eventually undermines the credibility of the whole industry.

For example, consider the infighting between wine, beer, and spirit producers regarding privatization of spirits and supermarket sales. As it now stands, 19 states do not allow spirit sales in supermarkets but allow supermarkets to sell beer and wine (some only allow beer in supermarkets). This simply makes life less convenient for consumers. Wine and beer lobbies don’t seem to mind discrimination against spirits probably because they think it makes them more competitive. For example, a comment to a recent post on Winepolicy.com noted one reason wine and beer industry players opposed Washington State ballot initiatives on spirits privatization (The Washington Wine Institute opposed privatization, for example): they fear losing supermarket-shelf space.

Ironically, wine and beer folks do not help themselves with such positions. They simply reinforce the idea that their very own products–which also contain alcohol–are somehow bad for consumers. That idea helps push regulation on the entire industry.  In fact, that was one factor that advanced the concept of prohibition. Richard Mendelson points out in his book From Demon to Darling: “Wine and Beer Interests proved themselves willing and eager to throw the liquor men to the drys,” he notes (pg. 46). Yet that strategy simply helped build the case for prohibition of all alcohol.

It was would wiser for wine, beer, and spirits industry players to understand the value that comes from working together to promote the image of the entire industry. Alcohol producers and retailers would benefit if they all promoted a positive image of the industry and supported market competition. The end result would be more rational and fairer regulatory policies for everyone rather than wacky and special-interest regulation.

Image credit: Joe Shlabotnik’s flickr photostream.

An End to Out-of-State Beer?

by Michelle Minton on November 8, 2010 · 1 comment

in Nanny State, Personal Liberty, Regulation

Would you be steamed if you couldn’t buy Anchor Steam (of San Francisco, CA), or go into a flying rage without Flying Dog (of Maryland)? Would you go bonkers without Brooklyn beer (of NY)? Well, if you care about craft beer, you should be worried about the CARE Act, currently under consideration by the U.S. Congress. The proposal could put your favorite out-of-state brew off the menu.

Over the last 20 or 30 years, the United States has seen a massive increase in the number of microbreweries in the last decade. Your choices at a bar are no longer between the four or five most popular brews in the country (Bud, Busch, or Miller); many bars pride themselves on offering a wide variety of on-tap beers from smaller producers and stocking bottles from around the country.

That could soon come to a grinding halt.

Dogfish, Bells, Daschutes, Full Sail, Clipper City, Brooklyn Brewery, Stone, and Rogue are some of the brews that might have a harder time turning a profit and getting widespread distribution for their products if Congress passes a bill giving states the authority to discriminate against out-of-state producers of liquor, wine, and beer. The current iteration of such a proposal is the “CARE” Act of 2010, currently under consideration in the U.S. House of Representatives.  As described here, H.R. 5034, the Comprehensive Alcohol Regulatory Effectiveness Act of 2010 would:

Allow states to ignore the Commerce Clause of the United States Constitution, as well as a number of other federal laws — including anti-trust laws.  States could then impose a host of protectionist regulations that impede interstate commerce to serve special interests within their states.  These regulations could impede direct shipping of wine to consumers, create a patchwork of labeling and product formulation mandates, impose discriminatory tax policies, and more.

The CARE Act is a response to a Supreme Court decision, Granholm v. Heald, in which the Court ruled that states could not pass laws that discriminate between in-state and out-of-state wineries in violation of the Commerce Clause of the Constitution. While the ruling was specifically about wine, it should apply to all types of alcohol.

If the CARE Act or a similar bill passes, allowing state regulators to discriminate between in and out-of-state producers, it could potentially bar out-of-state beers, ensuring a captive market for home-state breweries. Not only would this eliminate certain beers from the market, but also it would likely increase the price of those out-of-state brews that could make it in as they’d likely pay a fee (aka a tax) for the privilege of competing with in-state breweries, vineyards, or distilleries. It would also mean an end to online sales of alcohol.

As noted by Rick Gideon over at Mutineer Magazine, it isn’t just beer that’s at stake. Wine and liquor have just as much to lose.

Small wineries are especially susceptible to this legislation, which could potentially take away their ability to offer wine clubs and other direct-to-consumer services. These channels allow them to service their patrons better than they might be able to through the traditional distribution system.

This bill also has liquor producers campaigning against passage. Some allege that states might alter definitions of certain spirits, such as Kentucky Bourbon, and even dilute some styles. They’re also concerned about states requiring particular labeling standards, and regulating how brands are allowed to advertise.

So, who is backing this push? The biggest push has come, unsurprisingly, from beer distributors — those folks who act as middlemen between producers of alcohol, like breweries, vineyards, and distilleries and retailers, such as your corner liquor or grocery store. As Gideon notes:

The National Beer Wholesalers Association is lobbying heavily in favor of the bill and has already contributed to the coffers of bill cosponsors. The NBWA claims they’re only trying to ensure states have better control in defending their alcohol laws, but bill critics claim that the NBWA is only trying to limit competition. Jonathan Yarowsky, lobbyist for the Beer Institute, states that brewers believe the bill “would lead to a protectionist and anti-competitive system that would hurt consumers.”

While the bill is still in committee and has no companion legislation in Senate, lover of beer, wine, spirits, and liberty ought to keep a close eye on this one.

Using Government to Weed Out Competitors

by Michelle Minton on September 28, 2010

in Legal, Odds & Ends, Regulation

In states throughout the country, beverage distributors are stepping into the political ring and in every case the opponent is the same: competition. Since prohibition, distributors have had the U.S. government in their corner, forcing beverage producers to go through them in order to get their products onto shelves. It almost makes sense then that distributors’ response to the threat of new competitors entering the market is not to offer better services, but to lobby the government to try and keep them out.

Distributors Should Welcome New Products on the Market

In Virginia, both wine and beer distributors came out against Governor Bob McDonnell’s proposal to privatize liquor sales in the state (to read more about the proposal see my articles here and here and here). Though they don’t say it, their reasons are obvious: Beer and wine distributors don’t want any more products available on store shelves that would divert customers from their products.

In California, as reported last week by Huffington Post, the California Beer and Beverage Distributors Association (CBBA) came out against the idea of legalizing marijuana in that state. Again, though they don’t say it, it’s pretty obvious that the reason beer distributors fear legalization is because they believe the availability of marijuana will result in fewer beer drinkers.

But evidence may suggest that beer and wine distributors should support the increased availability of a multitude of refreshments. According to research from the Distilled Spirits Council of the United States (DISCUS), 70 percent of spirits drinkers also consume wine and evidence suggests they often purchase these items at the same time (anecdotal evidence indicates that about 50 percent make dual purchases).  It makes perfect sense if someone is planning a party or gathering that they would purchase at one time all the refreshments their guests might want.

Having liquor next to the wine in a store or pot on a shelf near the beer won’t stop beer and wine drinkers from picking up their favorite bottles. It just makes it more likely that liquor and/or marijuana consumers will purchase one of these other beverages when shopping for their favorite refreshment.

Alcohol middle-men pay lawmakers to protect industry

by Michelle Minton on August 2, 2010

in Odds & Ends

An article today in the Washington Post highlights the massive amount of money the beer wholesalers have been throwing at Washington these days. The reason, apparently, is to garner support for a measure that would allow states to restrict direct sales of alcohol from out of state producers.

Why would alcohol distributors want states to discriminate against out-of-state producers? The answer is simply: they want vineyards, distillers, and brewers to have to depend on the middle man wholesalers (aka distributors).

The Comprehensive Alcohol Regulatory Effectiveness (CARE) Act springs from a long-running legal battle over the powers of states to control alcohol sales within their borders. After Prohibition, most states established a three-tiered system of producers, wholesalers and retailers.

While the article correctly highlights some of the methods bills are pushed through the legislative process by interested parties, it seems to demonize the wholesalers. While their tactics are less than honest competition on the open market, the true -market competition, the real villain in this story is any lawmaker who is selling his or her vote to the highest bidder.

On April 15, a bill backed by the National Beer Wholesalers Association was introduced in the House aimed at limiting direct sales of beer, wine and other alcohol, which the trade group views as a mortal threat to its industry.

Over the next two weeks, the group contributed more than $45,000 to the campaign accounts of Rep. John Conyers Jr. (D-Mich.), chairman of the committee considering the bill and the guest of honor at a fundraiser during the association’s annual Washington meeting this spring. The group hired as an outside consultant Conyers’ former chief of staff, who met with members of the chairman’s staff.

In addition, the group has donated nearly $300,000 this year to more than 100 House members who agreed to co-sponsor the legislation, often within days of securing the lawmakers’ formal support, according to Federal Election Commission records. More than a dozen lawmakers received donations within a week of endorsing the bill, records show.

Rep. Mike Quigley (D-Ill.), for example, received a $2,500 contribution three days before the bill was introduced with his name on it. Another co-sponsor, Rep. Pete Olson (R-Tex.), received $8,000 in donations from the group this year, including $2,500 two days after pledging his support.

New “stimulus plan” brewing in Congress

by Michelle Minton on July 8, 2010 · 1 comment

in Culture, Deregulate to Stimulate, Economy, Employment, Odds & Ends

It is actually less of a “stimulus” plan and more of a “get government out of the way and stop inhibiting growth” plan. A bi-partisan group of Senators led by John Kerry (D-Mass) introduced S. 3339 in mid-may, a bill that would, among other things, reduce the federal excise tax that small brewers must pay per barrel they produce.

For the congressmen and Senators selling this proposition, it probably wasn’t the brightest idea to associate the tax-cutting-proposal with the word “stimulus” which now evokes memories of massive taxpayer-funded bailouts to government favored businesses that probably should have failed years ago due to inefficiency and sheer ineptitude.

Unlike the auto, construction, and real estate industries, small brewers in the US have made great strides in the last decade despite heavy taxes, discriminatory regulations, layovers from prohibition, and a recession. Craft beer is more popular among US drinkers than ever before. Given the opportunity in a free market, small The Three Beersbrewers could collectively take a large chunk of the market away from the monolithic “big beer” companies like Anheuser, Coors, Budweiser, etc. They could lower prices, increase production and distribution, hire more workers and contribute more in tax revenue. But there’s a built in disincentive for small brewers to grow–if they get too big they loose the one advantage they have over bigger brewers: the tax benefit.

So yes, cutting taxes will help small breweries stay afloat and grow, but it isn’t enough for true stimulation of the beverage industry. To create jobs, increase the number of small brewers, increase competition, and massively reduce the cost of purchasing beer, congress should eliminate the tax on beer.

Consider that brewers not only pay the federal excise tax, but also a state excise tax in addition to all the other fees and costs. In 2004 the Beer Institute estimated that taxes represented over 40% of the retail cost of beer. Imagine that! Without the tax burden on producers your craft brew would cost just $3.50 instead of $6, your Budweiser would cost $1.50 and a miller high life would only cost you your dignity (just kidding, I drink high life).sam-of-dogfish-head

And for some states protecting the small brew business is especially vital. Take Oregon, for example, which has more microbreweries per capita than almost any other state. Small brewers alone provide the state with nearly 5,000 jobs and over $2 million in revenue. In fact Oregon has more small breweries. While some legislators hear those numbers and can only see ways to leech off that success (as I wrote about back in February 2009) it is good that other legislators seem to understand the principle that if you get government out of the way of business, there are more jobs, more money, and more stuff. Perhaps if they could just apply that logic to all other businesses, including big brewing companies, we’d be a lot better off.

Regulation of the Day 138: Dwile Flonking

by Ryan Young on June 2, 2010

in Culture, Nanny State, Regulation, Regulation of the Day

Britons sure do seem to have a lot of time on their hands. Take, for example, the colorfully-named pastime of dwile flonking. Players soak a rag in beer and put it on top of a pole. Then they use the pole to hurl the rag at other players.

A player who misses twice in a row is called a “flonker.” Flonkers are required to drink a beer before the opposing team can pass the errant rag all the way around him in a circle.

This year’s dwile flonking world championship was to be held in Norfolk. Then regulators got involved. As one can tell by the rules, dwile flonking is a drinking game. And drinking games are forbidden now. Legislation passed earlier this year banning them.

The American journalist H.L. Mencken defined Puritanism as “The haunting fear that someone, somewhere, may be happy.” He may as well have been talking about regulators.

And thanks to the new Puritanism, the world may never know who the world’s top dwile flonkers are.

Liquor Licensing Overhaul Brewing in NJ

by Michelle Minton on May 24, 2010

in Deregulate to Stimulate, Nanny State, Odds & Ends, Personal Liberty, Sanctimony

Democratic Senator James Beach introduced a set of bills earlier this month that, if passed by the New Jersey state senate, will make it easier and cheaper for restaurants and stores to obtain the necessary licenses to serve and sell liquor. Attempts like this to liberalize the sale of alcohol are certainly a step in the right direction. Though alcohol has been legally served in the US for 77 years, it should be a sobering revelation to every citizen that the impetus for restoring our right to free choice is money and not freedom. Yes, the reforms in New Jersey would be a step in the right direction, but we’ve still got a long way to go before we can really shake the hang-over regulatory policies from prohibition.

Because NJ’s licensing scheme works  much like taxi cab medallions, there is a limited number of licenses available in each municipality and no way for counties to sell their licenses to one another. Two of the bills introduced by Sen. Beach would increase the amount of liquor licenses by allowing their sale at “fair market value,” to other municipalities within the state. A third bill would create an entirely new type of license for restaurants. This new class of licenses allows for beverage sales along with food service at tables. These licenses are unlimited (unless a municipality chooses to limit the number) and the cost to purchase is capped

Wasted Time:

Getting a license to sell liquor in New Jersey is complicated, competitive, and time consuming. Because of their limited availability (each municipality is allowed to issue one tavern or bar license for every 3,000 residents, and one license for a packaged-goods store for every 7,500) they are rare and highly valued. For example, restaurant owner Ron Squillace had to wait 5 years and pay $300,000 before finally acquiring a license to distribute alcohol at his trattoria. That is five years that his BYOB had to compete with all the other restaurants in the area that could offer diners a glass of red wine with their eggplant parmesan.  Currently there are around 9,300 licenses-a decline since the 80′s as licenses have expired. Most small business owners can’t afford that kind of expense, and with a failure rate of about 50% over five years the inability to compete with well-established and chain restaurants that can afford the hundreds of thousands of dollars to buy liquor license, it makes success all that much more difficult.

Buzz-kill: Opposition to Reform:

Predictably, the major opponents to the proposed overhaul-especially reforms that make it easier for grocery stores to sell alcoholic beverages, are liquor store owners. They complain that since grocery stores can sell a greater variety of liquor, are more convenient, and cheaper, that “Mom and Pop” liquor stores will be unable to compete. They may be right. However, their business model is built on a niche created by a regulatory injustice. Nobody would have listened to mobsters or speak-easy owners had they complained that ending prohibition would put them out of business. If small liquor stores can find no other way to compete in the wake of reforms it will be sad, but it will be a small price to pay for economic liberty.

Addicted to the money: It’s only a problem if politicians admit it.

The fact of the matter is that a lot of old alcohol regulation remains in place because of the money and power they generate. Restricting the number of licenses makes them very valuable and because restaurants able to obtain them have a competitive leg up on other establishments owners are willing to spend just about whatever it takes to get them. Take for example, the fact Squillace was willing to wait 5 years and pay $300k in order to compete with other restaurants already able to serve alcohol with meals  waited 5 years and spent at least $300k to obtain the license that would allow him to compete with other restaurants already able to serve alcohol with meals. And who knows how many officials he had to bribe or incentivize to move the process along.

Drunk with Power: Abolish liquor licensing.

The bills introduced by Sen. Beach represent a significant step toward increasing the available licenses in the state and reducing the cost of purchasing a license for businesses. However, it still does no correct the real injustice, which is the government overstepping its authority. It isn’t there to take money from business owners or tell them what they can sell to their customers.

After 77 years of milking the beverage regulation cow, it is understandable that NJ lawmakers are having a tough time walking away from all that power and money.  While increasing the number of available licenses make it easier and cheaper for restaurants and less likely that they’ll fail, thereby increasing tax revenue generated in the state, the need for reform is not about money; it is about the proper role of government and correcting the sins of the past (aka prohibition).

If New Jersey politicians want a vibrant economy and a just government actually of, by, and for the people [all the people not just the politically connected and rich] it should consider abolishing licensing all together; allow all restaurant owners the ability to serve alcohol without the necessity of first paying tribute to the state in order to make a living.

Congressional Bill Threatens Direct Shipping of Wine

by Angela Logomasini on April 21, 2010 · 1 comment

in Nanny State, Personal Liberty

This week, the National Beer Wholesalers Association members descend on Washington for their annual legislative conference and lobbying visits to Congress. High on their agenda is a bill (HR 5034) that would limit consumer freedom by allowing states to prevent direct-to-consumer shipping of alcohol–trumping the Supreme Court ruling, Granholm v. Heald. Under Granholm, states are not allowed to pass laws that discriminate between in-state and out-of-state wineries unless the state can show that there is no other way to meet state policy objectives associated with such things as tax collection and protection of minors, etc. The bill would shift the burden of proof, requiring that plaintiffs show that a state law does not serve the state’s policy goals in even the smallest way. It reads [emphasis added]:

(c) Presumption of Validity and Burden of Proof- The following shall apply in any legal action challenging, under the Commerce Clause or an Act of Congress, a State or territory law regarding the regulation of alcoholic beverages:

`(1) The State or territorial law shall be accorded a strong presumption of validity.

`(2) The party challenging the State or territorial law shall in all phases of any such legal action bear the burden of proving its invalidity by clear and convincing evidence.

`(3) Notwithstanding that the State or territorial law may burden interstate commerce or may be inconsistent with an Act of the Congress, the State law shall be upheld unless the party challenging the State or territorial law establishes by clear and convincing evidence that the law has no effect on the promotion of temperance, the establishment or maintenance of orderly alcoholic beverage markets, the collection of alcoholic beverage taxes, the structure of the state alcoholic beverage distribution system, or the restriction of access to alcoholic beverages by those under the legal drinking age.’.

The NBWA says that the bill will simply “clarify” Granholm requirements and promote an “orderly market.” In reality, rather than clarify, it overturns Granhom by allowing any protectionist law that might arguably in some tiny way serve any goals associated with: “temperance,” “orderly markets,” tax collection, regulation of distribution, or enforcement of the legal drinking age. And the law would stand even where other–likely much better–means of meeting such goals exist. This serves wholesalers, making sure that all wine passes through them before reaching consumers.

Congress can make these changes since the Commerce Clause of the U.S. Constitution allows it to grant states certain rights to regulate interstate commerce. But without congressional consent, the “dormant commerce clause” bars such protectionist state laws.

According to Wine America, which represents wineries: “NBWA’s legislation would, without any justification, allow states considering alcohol beverage measures to virtually ignore the Commerce Clause and federal law in all but the narrowest circumstances”. Tom Wark notes on Fermentation: “[t]his new law would provide a state with the ability to simply announce that the discriminatory law is meant to protect minors or assure tax collection…NOT THAT the discrimination is the only way of protecting minors or assuring tax collection. This is important. It gives states free reign to do what they like and renders the bill’s ‘may not facially discriminate’ language meaningless.”

It’s worth noting that these laws not only harm consumers, they impose serious burdens on small wineries–making it difficult for them to survive. Check out this video on the impact for wineries.

Image credit: wallyg’s photostream on flickr

Pennsylvania’s perpetual prohibition

by Michelle Minton on April 20, 2010 · 1 comment

in Legal, Nanny State, Odds & Ends, Personal Liberty, Precaution & Risk

Philadelphians love our beer. Especially our little niche-serving craft-beers. The city of brewerly love has produced some of the countries best-loved brands and the by-our-Belgian-bootstraps attitude has inspired many brewers throughout the country. But from the recent behavior of those in charge of oversight for booze in PA you’d think we were a state of teetotalers. beer-week-philly-2

The problem is, when it comes to the regulation of booze there is zero competition. Since most of the people handling the regulations are appointees, citizens barely have a say in the matter. The result? A regime that regulates in a heavy-handed manner, that is inefficient, and performs a function nobody wants them to do.

In the free market a service provider that is inefficient or unable to perform the duties for which it was hired is replaced. However, when it comes to government oversight, there is little or no competition among regulators. Thus, even when a regulatory entity repeatedly demonstrates its inability to perform, businesses and individuals have no choice but to continue complying with these agencies’ deficiencies.

For example, take alcohol regulation in Pennsylvania and the recent bar raids in the city of Philadelphia. One bar owner, Leigh Maida, had three of her establishments raided raided by the Bureau of Liquor Control Enforcement last month based on a complaint from an anonymous source claiming that they were selling “un-registered beers.” The state of PA requires distributors of beers to register each brand they intend to sell in PA (for a fee of course). “something really crappy happened to us,” said Maida about the Bureau’s seizure of over 300 bottles of beer and 3 quarter-kegs.  As it turns out many of the beers confiscated were registered.

Maida claims that more than half of the beer taken was actually properly registered but the cops couldn’t find it on their lists because of “clerical errors” and “blatant ineptitude” between the police and Liquor Control Board (with whom he officers were deliberating with via phone.)

Case in point; Monk’s Café Sour Flemish Red Ale. The beer has been sold across PA at dozens of restaurants and distributors for more than seven years. The brand appears on the state’s online list as “Monk’s Café Ale” and because the names did”t match up, troopers seized 20 bottles and three kegs of the “illegal” ale from the three bars.

Police also took Duvel Belgian Golden Ale because it only appears on the list as “Duvel Beer”.

“After checking their inventory against the state’s official list of registered beers (which contains more than 2,800 brands) the officers seized four kegs and 317 bottles. Police calculations indicate that they now possess about 60.9 gallons of beer with an estimated value of $7,200.”

According to the Philadelphia Daily News State Police Sgt. William N. La Torre said that the beer would be kept in a secured location, as evidence, until the case is resolved, probably in six to eight months.

The burden of regulatory inefficiencies should not be shouldered by businesses. The Maida’s establishments has lost the ability to offer these beer for 6-8 months, if not permanently. By the time the bars re-acquire the brews they’ll potentially be past the date of best use, consumers who had wanted to purchase the brands would have been disappointed and the image of the bar has been severely damaged.

Regulations like this make it difficult for businesses to remain open in Pennsylvania. It’s to their credit that bars, brewers, and distributors can deal with the logistical and financial burdens of these regulations and continue to operate in spite of them. What is more harmful to Pennsylvanians: being served an unregistered beer or losing a businesses that serve customers, pay taxes, pay employees, and contribute to the state’s attractiveness for residents and visitors?
It’s time to axe the hangover regulations from prohibition and allow brewers, bar owners, and consumers to make their own decisions when raising their glasses.

Picture via Philly.com

← Previous Entries

Next Entries →