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More Trouble Brewing, Texas Edition
On the Right these days, we’re apt to say that, however bad things might be at the federal level, they’re going relatively well within the states — particularly in those places with Republican majorities. But while outliers always exist, it’s hard to square that stereotype with a 2013 Texas law that denies Lone Star breweries that produce more than 125,000 barrels of beer the right to sell the distribution rights for their products. As described by the Institute For Justice, which is representing three breweries in a challenge to the law:
[I]f Revolver Brewing wants to use a distributor to have its beer distributed in Houston, it is required to select one distributor. That distributor will be the only source of Revolver’s beer in Houston, and every bar, restaurant and liquor store will have to buy Revolver from that single source.
Basically, if you’re a small Texas brewery who wants to grow into a medium-sized one, you have to surrender your distribution rights without compensation (though the distributors are welcome to sell the rights to other distributors). More via the Cato Daily Podcast.
America’s liquor laws are famously byzantine (read: crazy), and this law only exists because of the Three-Tier System that most states — including Texas — have, which requires that beer manufacturers, distributors, and retailers all be separately owned. But this compensation-free program is brand new, and a seemingly unadulterated example of rent-seeking.
Rick Perry has been — deservedly, I think — getting a lot of second looks lately and I challenge anyone to watch his campaign kick-off speech without becoming at least a little excited (to use a technical phrase, I went completely gooey over it). But I’d sure like to hear an explanation from him as to what he was thinking when he signed this nonsense.
Image Credit: By Nan Palmero from San Antonio, TX, USA (Alamo Beer Near Hays Bridge) [CC BY 2.0], via Wikimedia Commons
Published in Domestic Policy, General
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I have no idea, Texas is a great place to live but some of our laws are bizarre. The hair threading case is a good example of a law that doesn’t seem to square with Texans’ image of their state.
I’d be willing to bet this is either a) cronyism or b) protectionism at work somehow. No state is perfect and our licensing schemes are about as awful as any other states, although better than some I hope.
Liquor licenses are a huge racket, one of the sweetest plumbs the state can pick. The opportunities are endless for cronyism. The byzantine mess of liquor laws are such by design. Every nonsensical jot and tittle is intentional, and it’s all about capturing the most revenue from the most reliably consumed and artificially expensive substance in the nation: alcohol.
And all the while you get to pretend that it’s some kind of sin tax for “public safety.” It’s beautiful in a Machiavellian way. And you get to do all kinds of political favors. It’s a nice racket when you get to be the problem, and the solution, and reap the benefits for doing people a favor for solving the very problems you yourself create.
Gone are the heady days of the Whiskey Rebellion, where people would see through this stuff and literally get up in arms about these kinds of things. Cronyism is apparent even right from the start.
Cronyism is the way of modern America. I would be amazed by any political movement to turn back that tide.
Microbreweries are popping up all over the place. They might not be allowed to grow without stuffing a few pockets, but at least there’s entrepreneurship somewhere in the land of Obamacare.
Like the car dealer franchise system that has affected Tesla, it’s clear rent seeking.
ditto on the last sentence, but somehow I don’t see the question getting asked unless there’s a major slip-up and John Stossel winds up being a debate moderator. Which is sort of like the phrase “a man named Albert Shanker got hold of a nuclear warhead” in Sleeper.
Given Gov. Perry’s fine turnaround on Ex-Im Bank reauthorization, I think he could come up with a satisfying explanation. Even if it’s like Newt’s on the failure to get rid of ag subsidies in one of the 2012 debates–which was a perfect imitation of a cat who’s once tangled with a blue-jay hearing one again.
I got moderately gooey on the kickoff, but the National Press Club speech completed the fan-boy puddle-fication.
I agree. Alcohol laws need to be reformed state by state. If they ever made any sense, they don’t now. Still I like Rick Perry. He’s got character. I am really pleased at how he stood up to Trump.
Even the best run (a.k.a. conservative) states have ideology-agnostic interest lobbies. And even the best conservative governors can’t fight every battle. A law like this is low on the public hot-button list, so it becomes a bone for the distributor lobby.
Alas, if only Wendy Davis loved beer more than abortions…
Yeah, there is no perfectly free-market state. You can find states that rank pretty well on an overall freedom index that still have plenty of nanny-state or crony capitalist laws.
Luckily Houston has added five or six new breweries. Two of them, Karbach and Buffalo Bayou (pronounced: bio) are excellent.