spirits

Alcohol Regulation Roundup: June 10, 2011

by Michelle Minton on June 10, 2011

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

Reporting from around the nation on the ridiculous, the sad, and the sometimes positive news about the state of alcohol regulations.

National: BuyaBeerCompany.com, a website set up by two ad execs hoping to purchase Pabst Brewing Co. with donations from individuals, was shut down by the SEC. Michael Migliozzi and Brian William Flatow were able to find 5 million people who agreed to invest a total of $200 million to purchase the brewery. Apparently, they were supposed to register the public offering with the SEC first. Since the men haven’t actually collected money, the SEC reportedly reached a settlement with the two gentlemen, rather than charging them with violations of federal law.

Alabama: A silly law that requires brewpubs in Alabama to operate within an historic building might be overturned. The House of Representatives passed legislation removing that requirement for brewpubs to obtain licenses. The bill also removes restrictions on brewing and allows the pub owner to sell their product to wholesalers in order to distribute their product beyond the brewpub.

Maryland: The Prince George’s County Board of License Commissioners is considering rule changes that would, among other things, allow county liquor stores to accept call-in deliver orders from residents. Not everyone in the state is happy with the proposed changes.

Ohio: Legislators in Ohio want to raise the cap on how high the alcohol content can be in beer from 12 percent to 18 percent. A provision in the proposed state budget would do just that, to the delight of brewers and craft beer lovers in the state.

[click to continue…]

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.

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.

In Letter and Spirit: Equal Treatment Under the Law

by Angela Logomasini on May 24, 2010

in Nanny State, Personal Liberty

A Washington Post blog pointed out last week that the State of Virginia is looking into privatizing its liquor stores. My recent pieces comparing New York and Virginia show that Virginia has done a pretty good job allowing competition to flourish within the wine and beer industries, and that serves consumers very well. Why not allow competition for spirits sales?

The so-called temperance lobby says that spirits are fundamentally different than wine and beer because they usually contain more alcohol per unit. They ignore the fact that spirits are often diluted with other liquid, which means mixed drinks don’t necessarily contain more alcohol than other drinks.

Ironically, alcohol abusers seem to know something better than government bureaucrats: you don’t need whiskey or “hard liquor” to abuse alcohol. Of interest, I recently discovered an article with data showing that people who abuse alcohol are mostly beer drinkers!

That is not to suggest that beer is somehow a bigger villain. It simply shows that alcohol is alcohol. Demonizing one over the others is plain dumb. The article suggests equal regulations for all alcohols, which makes sense. It foolishly advocates more stringent regulations for all alcohol. Let’s face reality. Binge drinkers will simply find ways around such laws. They did during prohibition, and it was a disaster! And it’s wrong to penalize responsible drinkers because kids in college drink too much.

Ultimately, everyone should be responsible for themselves; if you have too much, that’s your fault. And if you harm someone else, you should pay a big price. As for “the children,” supermarkets and other retailers can police that as well as or better than government bureaucrats.

Those of us who enjoy wine and spirits responsibly should have the convenience of picking up our spirits, wine, and beer along with our groceries. Why should I have to hunt down a government store so I can offer Margaritas at my next barbecue?

This move toward liberating spirits in Virginia seems to be part of a progressive trend in the state to liberalize liquor laws. Just recently, they lifted silly restrictions against liquor tastings.

Cheers to Virginia’s new governor for recognizing these common-sense realities and for calling for equal treatment of spirits. After all, equal treatment under the law is a basic constitutional principle. Picking and choosing one industry over the other is unfair and frankly, un-American!

Image credit: wickenden’s photostream on flickr.

LibertyWeek 71: The Politics of Booze

by Richard Morrison on November 30, 2009

in CEI Projects, Podcast

Your hosts Richard Morrison and Jeremy Lott welcome guests Gregory Conko and Garrett Peck to Episode 71 of the LibertyWeek podcast. We start with an update on the latest in the Climate-Gate scandal and the impact of nanny state policies in New York City, then move on to Monsanto’s antitrust worries and finish with an interview with Garrett Peck, the author of The Prohibition Hangover: Alcohol in America from Demon Rum to Cult Cabernet (buy your copy here).

Nanny State Beer

by Angela Logomasini on November 13, 2009 · 1 comment

in Nanny State, Personal Liberty

Nanny state regulators in the United Kingdom have been up in arms about a beer–Tokyo released by BrewDog– that dares to contain just over 18 percent alcohol! One legislator even submitted a motion in the Scotland Parliament condemning the beer. Others have called for for regulations. “It is completely irresponsible and a real worry … It highlights the need for a mandatory code for the alcohol industry to prevent irresponsible drinks promotions such as this,” noted a representative of a the UK-based British Liver Trust.

BrewDog’s response? As recently reported by the blog BevLaw, BrewDog markets a product called “Nanny State Beer” for all those regulators and others who just can’t control themselves! It has just 1.1 percent alcohol. Its label reads:

Society today is an all too dangerous place.

ASBO-ed [Anti-Social Behaviour Order] three year olds loitering in alley ways, CCTV [Closed-circuit television] recording our every move and misplaced suitcases grinding entire public transport infrastructures to a halt.

No wonder you’ve been reduced to a quivering wreck, battening down the hatches at three in the afternoon with Ofcom [Office of Communications] on speed dial.

At BrewDog we appreciate your inability to know your limits – especially when it comes to alcohol – which is why we’ve created Nanny State.

This idiosyncratic little beer is a gentle smack in the right direction.

It’s time to draw your net curtains, sit back with Nanny and watch your favourite episode of Last Of The Summer Wine. It’s finally safe to enjoy alcohol again.

Please note: BrewDog recommends that you only drink this beer whilst wearing the necessary personal protective equipment and in a premises that has passed a full health and safety risk assessment for optimum enjoyment.

Good that BrewDog has a sense of humor, and fortunately, their products remain on the market–at least for now. What’s not funny, is the growing nanny-state mentality and what it can do to our freedoms. Beer is just one of their many targets. Watch out for regulations on soda, car windows, water, and even your waistline!

Image: From BrewDog blog site.

Regulation of the Day 56: Kahlua in Ohio

by Ryan Young on October 6, 2009 · 1 comment

in Deregulate to Stimulate, Economy, Nanny State, Personal Liberty, Regulation, Regulation of the Day

Kahlua contains 20% alcohol in 49 states. But in Ohio, it is 21.5%. Weird, huh?

Turns out regulations are the reason. My friend Jacob Grier pointed me to an article showing that Ohio groups alcoholic beverages into two categories: wine/beer and spirits. Any beverage below 20% alcohol is in the wine/beer category and can be sold in grocery stores. Anything above 20% is classed as a spirit and can only be sold in state-run liquor stores.

Drinkers often mix Kahlua with spirits such as vodka. So the company actually changed its recipe in Ohio to ensure that Kahlua would appear in stores next to its complementary products. The benefit to consumers from this regulatory scheme is unclear.