Trouble Brewing

 

4748891804_1bceaa2679_zAlcohol regulations in the United States are — to use a technical turn of phrase — completely insane. As anyone who imbibes and has travelled throughout the country knows, sales are regulated in completely different ways from place to place. In some states, beer, wine, and spirits are all available for purchase in supermarkets; others require supermarkets to provide separate entrances for liquor sales; others severely restrict the number of resale licenses; still others mandate sales through state monopolies; others yet allow counties to prohibit sales entirely. Curiously, these rules don’t correlate well with other indices of freedom: one wonders whether any other comparison would lead one to conclude that California is a laissez faire paradise and New Hampshire a statist dystopia.

But if this Cato Daily Podcast has the matter correct, the regulations on alcohol production and distribution are every bit as crazy as those on its sale, and often more pernicious for being federal. Did you know, for instance (I did not) that the federal government has specific taxes on beer production, and that the rate of taxation depends on the size of the brewery’s output? As you might imagine, this tends to pit big breweries against small- and medium-sized ones, leading them to support different reform bills.

Moreover — and this, again, I confess I was wholly ignorant of — most states prohibit breweries from directly selling their product to consumers. Instead, they’re required to sell their wares to a wholesaler. This is generally pitched as a safeguard against alcohol abuse, but also has the effect of creating a rent-seeking lobby that impedes normal market forces.

Alcohol is, of course, an intoxicant and it’s not crazy for government to have an interest in its production and consumption (with the precise boundaries of the necessary expression of that interest being open to interpretation). But the idea that citizens are well-served by the kind of fussy, save-us-from-ourselves micro-managing we’re subjected to? It’d be nice, for once, for the government to treat us a little more like adults.

Image credit: Flickr user Bernt Rostad.

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  1. Misthiocracy Member
    Misthiocracy
    @Misthiocracy

    Tom Meyer, Ed.: As anyone who imbibes and has travelled throughout the country knows, sales are regulated in completely different ways from place to place.

    That’s not insanity. That’s exactly as it should be.

    You’d rather that Washington D.C. impose from on high one set of regulations for all?

    No thank you.

    I personally despise the alcohol regulatory regime currently in place in the People’s Democratic Republic of Ontariostan, but I like it even less when  bureaucrats in Ottawa tell me what I can and cannot put into my belly. At least under the current regime I get sneak across the river to buy beer in Quebec.

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  2. Tom Meyer Contributor
    Tom Meyer
    @tommeyer

    Misthiocracy:

    Tom Meyer, Ed.: As anyone who imbibes and has travelled throughout the country knows, sales are regulated in completely different ways from place to place.

    That’s not insanity. That’s exactly as it should be.

    You’d rather that Washington D.C. impose from on high one set of regulations for all?

    No thank you.

    Well, this gets us back into my post yesterday, but — when it comes to restrictions on government — I do sometimes favor such things. There are plenty of matters for which I prefer not to live at the sufferance of a majority of my neighbor’s opinions. Switching from booze to guns, I’m delighted that local authorities got the snot kicked out of them in MacDonald.

    That said, one can concede that — even if local powers have a right to exercise their powers — that the fussiness and moralizing way they do so is distasteful.

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  3. Misthiocracy Member
    Misthiocracy
    @Misthiocracy

    Tom Meyer, Ed.: That said, one can concede that — even if local powers have a right to exercise their powers — that the fussiness and moralizing way they do so is distasteful.

    All government is distasteful. The goal is to limit the damage that it can do, and one of the the best ways is to limit the damage to within local boundaries.

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  4. The King Prawn Inactive
    The King Prawn
    @TheKingPrawn

    “Society in every state is a blessing, but government even in its best state is but a necessary evil in its worst state an intolerable one…”

    I’m not sure I can buy the first bit with today’s society, but the rest still rings true.

    In Wa we recently dissolved the government monopoly on spirit sales. This was overall a good thing. Prices haven’t really gone down because of the tax regime, but buying a fifth at Walmart still feels like sticking it to the man instead of the other way around.

    • #4
  5. gts109 Inactive
    gts109
    @gts109

    I live in PA, land of state-owned and operated wine and spirits stores, so I have a particular interest in this subject matter.

    There is a movie called Beer Wars that’s good on the topic. Not the best documentary, but I learned a ton about the production and distribution side of the industry that I’d never heard before. It’s been a few years since I last watched it, but the most ridiculous things that still stick in my mind were how difficult it was for independent brewers to get shelf or truck space given the way the industry was structured by federal law. That problem isn’t much of one any longer, I can’t imagine, but it took a long time for independent, craft breweries to really get a foothold in the market.

    http://www.rottentomatoes.com/m/beer_wars/

    • #5
  6. user_138562 Moderator
    user_138562
    @RandyWeivoda

    gts109:I live in PA, land of state-owned and operated wine and spirits stores, so I have a particular interest in this subject matter.

    In Minnesota lots of small town have municipal liquor stores.  This seems like a racquet to me, where the city owns the only liquor store in town and there is a legal prohibition against anyone else opening one.

    This is probably common knowledge but I just found out recently that federal law prohibits someone from running their own private still.  I understand the government not wanting unlicensed distilleries selling booze to liquor stores, without being taxed.  But why is it the business of the federal government if I want to make my own hooch for my private consumption?

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  7. user_352043 Moderator
    user_352043
    @AmySchley

    Randy Weivoda: This is probably common knowledge but I just found out recently that federal law prohibits someone from running their own private still.  I understand the government not wanting unlicensed distilleries selling booze to liquor stores, without being taxed.  But why is it the business of the federal government if I want to make my own hooch for my private consumption?

    Not completely true — there is a provision for home brewers, but it limits you to a gallon a year.

    While that would be sufficient for my distilled alcohol needs, I accept that it might not be for others.

    • #7
  8. Mountain Mike Inactive
    Mountain Mike
    @MichaelFarrow

    Amy Schley:

    Randy Weivoda: This is probably common knowledge but I just found out recently that federal law prohibits someone from running their own private still. I understand the government not wanting unlicensed distilleries selling booze to liquor stores, without being taxed. But why is it the business of the federal government if I want to make my own hooch for my private consumption?

    Not completely true — there is a provision for home brewers, but it limits you to a gallon a year.

    While that would be sufficient for my distilled alcohol needs, I accept that it might not be for others.

    We feel TTB’s boot heel here, not to mention California’s, and Sonoma County’s in running our winery.  Even worse are all the other state’s regulations concerning direct shipping, since DTC (direct to consumer) is a large percentage of the small boutique winery  biz.  It is easier to just live with it than fight the TTB and  Democrat People’s Republic of California. I don’t even dream of distilling brandy.

    • #8

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