R Street: A Little Less Tariff, a Lot More Booze

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Politicians from across the ideological spectrum are constantly waxing poetic about the importance of blue-collar manufacturing jobs. In fact, much of the justification for the recent tariff disputes has been a need to protect American manufacturing industries. R Street’s Jarrett Dieterle and Clark Packard argue in National Review that the best path to more manufacturing jobs is to scrap the tariff wars and start deregulating the alcohol industry:

From the earliest moments of his campaign, President Donald Trump has emphasized the importance of domestic manufacturing jobs. He’s negotiated carve-outs to keep factories in America, railed against companies that move jobs overseas, and increased tariffs in an attempt to protect blue-collar workers. Nearly all of the president’s rhetoric, however, has fixated on a handful of sectors traditionally associated with manufacturing, such as the steel industry, automobiles, and construction. This myopic focus has blinded the president to one of the most promising sources of manufacturing jobs in modern America: the alcohol industry.

President Trump is far from the only government official who obsesses over manufacturing jobs, with stories cropping up daily about politicians visiting production plants in Rust Belt states and donning hard hats for well-publicized photo ops…

Lost in all this is the fact that the American drinks industry has some of the best job-growth potential in the country. According to data from the Bureau of Labor Statistics, breweries, wineries, and distilleries created the second-most manufacturing jobs of any industry in 2017. These numbers don’t even include support industries that are tied to drinks, such as barrel manufacturers or bottle producers. With new breweries and distilleries opening every day, the growth seems primed to continue — if policymakers will let it…

Read the whole piece here.

W.V. Legislature Again Considers Sunday Sales

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For the last several years , West Virginia has considered proposals to allow Sunday liquor sales—an idea which has proven somewhat controversial in the state. The state legislature is once again considering reform this year, and WV Metro News reports that legislation has passed the state House by large margins and now heads to the Senate:

The House of Delegates has passed a bill that would allow the sale of liquor on Sundays.

Currently, liquor cannot be sold on Sunday in West Virginia.

“This bill seeks to change that by putting liquor sales on equal footing with beer sales,” said Delegate Moore Capito, R-Kanawha, the vice chairman of the House Judiciary Committee.

That means liquor could be sold from 1 p.m. to midnight on Sundays…

Read more here.

States such as Indiana and Minnesota have also overturned their blue laws in recent years.

R Street Testifies in Support of Montana Micro Distillery Bills

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The R Street Institute’s Western Region Director Steven Greenhut recently submitted testimony before the Montana legislature in support of two bills that would liberalize rules for micro distilleries in the state. One bill (SB 182) would raise the production cap for micro distilleries, while the other (HB 362) would increase the amount of distilled spirits that can be sold for off-premise consumption. As Greenhut articulated:

Montana has a boisterous and growing micro-distillery industry. This is a wonderful development for a variety of reasons. Similar to microbreweries, these businesses tap into growing regional interest in artisanal and craft beverages. These small distilleries epitomize the spirit of entrepreneurship. They create well-paying and interesting jobs. They promote tourism, as visitors love to go to tasting rooms and compare the creative libations distilled in different cities and regions. They also provide new revenue for state and local governments.

To read R Street’s full testimony for SB 182 see here, and for HB 362 here.

Montana Legislature Decides Against Expanded Brewery Taproom Hours

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The Montana legislature was considering legislation to extend the hours in which brewery taprooms could stay open and serve the public. 3KRTV.com reports that the bill died a quick death, however:

A bill allowing Montana microbrewery taprooms to extend their hours to 10 p.m. died a quick death.

Without discussion, the House Business and Labor Committee voted 16-to-3 to kill the measure Friday morning.

The committee had a hearing on House Bill 185 earlier this week.

Montana craft brewers supported the bill, saying that allowing their tap rooms to remain open for an additional two hours would help the booming industry keep growing.

But tavern and restaurant owners strongly opposed it…

Read more here.


Mississippi Considers New Wine Shipping Bills

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Mississippi is currently in the vast minority of states that does not allow outside wine shipments to in-state residents. According to WLOX, the state legislature is at least considering changing that:

Two bills are under consideration in state legislative committees that would allow direct sales and shipment of wine to Mississippi residents.

Members of both the House and Senate have authored bills, and local liquor stores are lobbying against them.

Similar measures failed last year…

Mississippi is among a handful of states that doesn’t allow wine to be shipped. All wine and liquor goes through the Revenue Department’s Alcoholic Beverage Control (ABC) Division.

Read more here.

Key N.C. Legislator Signals Openness to Liquor Store Privatization

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North Carolina is one of 13 states that still utilizes government-run liquor stores at the retail level. While privatization is often a difficult battle in control states, a key state legislator recently signaled an openness to the idea, although he expressed concern about potential lost revenue. The Citizen Times reports:

Republican N.C. Sen. Chuck Edwards told a conservative business group Friday he was open to privatizing government-controlled liquor sales and that a committee he is chairing has some sway over the issue.

"Lots of folks already are coming to me and talking about changes to North Carolina's antiquated ABC laws to make things streamlined both for folks who administer that and for business," said Edwards, who represents part of Buncombe County including Asheville and all of Henderson and Transylvania counties…

Privatization proponents, such as Edward's fellow Henderson Republican NC Rep. Chuck McGrady, say ABC scandals are a good argument to get government out of liquor sales.

McGrady chairs the House ABC board and last month said he is "intent" on making the change. 

Edwards chairs the Senate's Commerce and Insurance Board that would also review such a shift. But in comments after the speech Edwards said he would only support the change if revenue lost by local governments could be replaced…

Read more here.

Why Does N.C. Have More Wineries Than Distilleries?

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Despite our nation being in the midst of a craft spirits boom, North Carolina has only 57 active distilleries in the state compared to its 168 wineries and 300-plus breweries. Why? As Jon Sanders for the John Locke Foundation explains, the answer is different regulatory regimes for distilled spirits vs. beer/wine:

At the beginning of the 20th century, North Carolina was the nation’s leader in wine production. North Carolina was also the nation’s leader in legal distilleries (with 745 registered distilleries, 540 that were operating). These legal industries were killed off by statewide prohibition in 1908.

After Prohibition was lifted (federal and state), the North Carolina ABC system was created to keep tight control over liquor. State government controlled wholesale distribution, and local governments controlled retail sales. (Even for a control state, that’s weird.)…

North Carolina didn’t see its first new distillery until 2005. Now there are 57 local distilleries in North Carolina.

In the meantime, wine (which had been placed under the purview of the ABC system in the late 1950s) was regulated under a relatively freer system. My colleague Jon Guze’s report describes many problems with the state’s three-tiered distribution system, but even with its flaws, it’s not nearly as restrictive as how North Carolina regulates liquor…

So wineries began coming back to North Carolina about when Prohibition ended, albeit very slowly at first. Faster growth was seen after reductions in state winery license fees and wine taxes were passed in 1972. By 2000, there were already 21 established local wineries. Now there are 168 local wineriesin North Carolina…

The entire piece is worth a read and can be found here.


Connecticut's Minimum Liquor Pricing Laws to Remain

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Connecticut’s previous governor, Dannel Malloy, had emphasized the need to reform the state’s notorious minimum pricing law for liquor, but ultimately was unsuccessful in changing it. Unfortunately, according to the Connecticut Post, the new governor has not prioritized the issue and repeal efforts have been put on the back burner again:

Without a governor that’s taking on the issue, Rep. Michael D’Agostino, co-chairman of the General Law Committee, said there will be no discussion about minimum bottle pricing this year.

Connecticut liquor laws establish a floor for liquor prices that, for the most part, retailers cannot go below.

Former Gov. Dannel P. Malloy said it amounted to a price fixing scheme. He tried for years to get lawmakers to repeal Connecticut’s minimum pricing laws, but ran into opposition from package store owners who are afraid they wouldn’t be able to compete with large retailers that would undercut them. Malloy argued Connecticut’s laws were unfair to consumers who could drive to a neighboring state and buy their alcohol for much cheaper prices…

Read the rest here.

Connecticut Anti-Craft Beer Legislation Dead For Now

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Connecticut lawmakers have been considering legislative proposals that would force Connecticut brewers to choose between on-premise beer sales or off-premise beer sales, a restriction that would have severely handicapped beer makers in the state. According to the Hartford Courant, the legislation has been dropped (for now):

A battle is brewing between Connecticut’s growing craft beer industry and liquor wholesalers, beer distributors and retailers, who question whether the smaller brewers are following laws regarding how much beer they can sell, and at what price.

The concerns from the wholesalers, distributors and retailers led to a pair of proposed bills that craft breweries saw as an outright attack on the industry, which has grown in Connecticut from a handful to more than 80 in the last several years. One bill would require breweries to choose between on-site or off-site sales, meaning taprooms would have to be closed to sell beer in package stores, restaurants and bars…

The outcry from the brewers resulted in state Rep. Brandon McGee, D-Hartford, and state Sen. Doug McCrory, D-Hartford, dropping their proposals, but McCrory said the conflict between the craft brewers and the distributors, wholesalers and retailers needs to be addressed…

Read more here.

Texas Legislature Considers Reforming "Blue Laws"

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Under current Texas law, liquor stores (but not grocery stores and other retail outlets) are prohibited from opening on Sundays. According to ABC 7, state lawmakers are considering repealing this antiquated blue law:

New legislation introduced in the Texas House would repeal so-called "blue laws" and allow liquor stores to open on Sunday.

State Rep. Richard Peña Raymond, D-Laredo, has introduced House Bill 1100, which would allow package stores (a.k.a. liquor stores) to be open seven days a week…

42 states allow the sales of spirits on Sunday. Texas already allows Sunday sales of all other alcohol beverages for all other retailers, including bars, restaurants, clubs, grocery and convenience stores and hotels…

Read more here.