Enough With State Liquor Boards
Jonathan Turley blogs his USA Today column:
Republican leaders and pundits have repeatedly denounced Obama administration programs from health care to bailouts as part of a creeping "socialist agenda," which appears to mean any centralized control of a market.What is fascinating is that the warnings over state monopolies omit one of the longest-standing institutions of central planning and control in the U.S.: state liquor boards.
Seventeen states continue to exercise control over liquor as absurd relics from the 1930s. Ironically, there is no better example of the failures of central planning than the "ABC stores" around the country from Alabama to Pennsylvania. Indeed, if Karl Marx were alive and trying to buy Schnapps today, he might reconsider aspects of Das Kapital after dealing with our central alcohol planners.
This month, many people were enthralled with a controversy in Idaho where the State Liquor Division had barred the sale of Five Wives Vodka. The division refused to allow Idahoans to buy the popular vodka because it might be offensive to the Mormon population in the state.
I represented the distiller of the vodka, Ogden's Own Distillery of Utah, in raising a host of constitutional objections to the enforcement of such religious mores. The state recently agreed to rescind its bar on sales, but the controversy should not pass without some discussion of continued existence of these state monopolies on alcohol sales.
...Because I live in Virginia, I have to drive to an ABC store to buy liquor -- a store that is insulated from competition, and it shows. Like many government-run enterprises, the place is run with all of the care and concern of your local DMV.
States differ on the rationale for these boards. The Utah Department of Alcoholic Beverage Control, for example, uses its authority "not to promote the sale of liquor" but to "promote moderation and to enforce existing liquor laws." The heavily Mormon state is famous for imposing arbitrary limits on the sale of alcohol from formerly banning of bars (in favor of "clubs") to the required use of "Zion curtains" to prevent bartenders from being seen pouring alcohol.
These and other laws seem based on the belief that "for the bureaucrat, the world is a mere object to be manipulated by him." The man who said that was Marx, a great believer in central control. These states have allowed a fixed bureaucracy to take hold of a market -- a self-perpetuating and inefficient middleman in the market.
Ironically, alcohol board heads often defend their decision to bar particular brands because of the limited space that they have at warehouses and stores -- ignoring the obvious point that there would be no limitations if they were removed as a chokepoint in the system.
In New York, ridiculously, I couldn't buy wine at the big Whole Foods near the hotel where they put me for Anderson Cooper and I was too tired to go off looking for a liquor store, so I just went without.
The Whole Foods had beer, but they told me they could either sell beer or wine there -- they had to choose. So, Whole Foods lost a wine sale and I went back to my hotel without the wine I wanted.
Alabama has had private liquor stores since about 1988. There are still a few "state stores" around, but they're dying. Grocery and quick-stop stores can sell beer and wine, and most do. A few years ago, our beer laws were changed to allow for beer up to 10% ABV, and now we have a small but growing collection of small-batch breweries in the state. So our situation isn't as dire as one might surmise from reading the article.
There are variations from place to place. There are still some dry counties, but the state law now allows any town of over some population (I think it's 10,000) to vote itself wet even if it's in a dry county. And even in dry areas, possession for personal consumption is legal; you just have to go to a wet area to buy. The urban areas have pretty liberalized laws. The main thing we still face is that prices are high because the state beverage control board still has the power to set price floors at the wholesale level. That's being challenged, but it may be a while yet. The wheels turn slowly, but they do turn.
Cousin Dave at June 19, 2012 12:43 PM
While living in MA for a few years I was baffled by state liquor rules that forbid sales on Sunday. I could go to a bar, drink myself into a stupor than drive home, but could not go to a store, buy a bottle and drive home to drink it.
This is just another example of our government fucking up the marketplace, harming society and infringing on our freedoms. Not necessarily in that order.
Savant Idiot at June 19, 2012 1:47 PM
I didn't know they made 10% ABV beers. Sam Adams, my favorite, is about 4.5% ABV...
Eric at June 19, 2012 1:54 PM
Montana had exclusively state stores but started to loosen up about 20 years ago. Still, access to spirits is limited.
Whenever I return to Cali or Nevada, I am in awe of the stacks vodka in the supermarket. That's how it oughtta be by God.
carol at June 19, 2012 2:32 PM
Ohio calls it the the Liquor Control Commission.
Until about seven years ago the retailer was actually a state package store. Then the state decided to get out and let the private stores actually run the retail sales. But the way they sold the contract/licenses was that they wouldn't sell the retail licenses to the chains like Kroger, Meijer, etc. They wanted the small chains, like IGA's, three-to-five stores to do the retailing.
Fast forward a few years and the crash. The smaller stores couldn't compete and the big chains were allowed to sell diluted spirits (40 proof vodka instead of 80) so many people would be satisfied with that and the cheaper groceries. The little stores go out of business and the big retailers now have separate package stores in them.
At some point, hopefully, the state will get out the liquor business.
Jim P. at June 19, 2012 3:56 PM
Stop hoping and start voting. This is well within the purview of state governments and their people. My state recently repealed its blue laws. Yours can too. Unless the people decide not to, in which case, that's actually their right. I like the liberal liquor laws in my state, but I don't expect all states to be the same. We have 50 different social laboratories in this nation, all competing against each other to attract tax payers. Let the voters decide, and then let the market decide.
Jason at June 19, 2012 7:48 PM
Didn't Washington State just convert to a private system? And didn't the prices go up?
Ok, my google-fu is not totally gone:
http://seattletimes.nwsource.com/html/businesstechnology/2018362915_liquor06.html
The Former Banker at June 19, 2012 11:17 PM
While living in MA for a few years I was baffled by state liquor rules that forbid sales on Sunday. I could go to a bar, drink myself into a stupor than drive home, but could not go to a store, buy a bottle and drive home to drink it.
CT too, until just recently. Now you can buy booze on Sundays from 10 a.m. to 5 p.m., I think. Other days of the week it's until 9 p.m. But the grocery stores mostly sell just beer and wine. The liquor stores sell everything else, including beer and wine. I love going to the local liquor store on Saturday for the wine-tastings!
Flynne at June 20, 2012 5:55 AM
"I didn't know they made 10% ABV beers. Sam Adams, my favorite, is about 4.5% ABV..."
Nationally marketed brands don't brew to more than 4.5% so that they don't have to deal with the liquor laws in different states. The week before last, we went out to eat and I had a local brew that was 9.8%. Tasty, but you don't want to drink that on an empty stomach, unless you're at home. The record for the strongest beer brewed is something like 18% -- the yeast can't go further than that.
Cousin Dave at June 20, 2012 6:24 AM
Cousin Dave:
"The record for the strongest beer brewed is something like 18% -- the yeast can't go further than that."
Yes, Belgian ales often get up that high. But, that limit was broken by Sam Adams. Its Utopias beer uses a modified yeast (I think) to get up to 25% or 27%. When I heard about it, I went out to get a six-pack and try this true marvel of science.
I found a bottle (they didn't make six-packs of it) for $125.00!
I decided I was happy with my Summit Pilsener.
-Jut
JutGory at June 20, 2012 7:09 AM
Damn, 25% with a yeast brew? I had not heard of that. And yeah, even if it's great beer, $125 is a bit steep.
Cousin Dave at June 20, 2012 9:48 AM
Didn't Washington State just convert to a private system? And didn't the prices go up?
jimg at June 20, 2012 11:43 PM
Didn't Washington State just convert to a private system? And didn't the prices go up?
Yes. But... The same measure that closed the state run liquor stores and allowed sales in other stores also had like a 27% tax on it.
Last year in Washington State 2 nearly identical measures to close state stores and allow non-state liquor sales both failed so they wrote this new measure to counter the "sky is falling" fears that people gave for voting against the previous measures.
I'm pretty certain that the tax thing will be adjusted eventually. Gotta vote on it though and people need to be ticked enough with the current arrangement to make it successful.
LauraGr at June 21, 2012 6:55 AM
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