R Street Institute's Jarrett Dieterle cited on Indiana's "warm beer law"

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R Street's Jarrett Dieterle was cited in a piece titled "Cold beer here in the age of Amazon" in The Herald Tribune, which discusses Indiana's infamous warm beer law. Columnist Brian Howey writes:

We are a state where fruit-based beverages can be sold cold in convenience stores, but malt/barley based brews go out the door warm...

Here’s how the American Conservative observes our straddling the centuries, with C. Jarrett Dieterle citing the “missed opportunity to reform the state’s infamous ‘cold beer law’” while underscoring “the cronyist forces Indiana reformers are up against” when the General Assembly and Gov. Eric Holcomb clamped down on Ricker’s which found a loophole to sell cold beer along with its convenience store tacos and burritos.

Dieterle continues, “Although nearly every state has outdated and arcane alcohol laws, Indiana’s cold beer law stands out as one of the most bizarre.”

According to an Associated Press analysis, liquor-store interests have contributed more than $750,000 to Indiana lawmakers since 2010, underscoring the power they were able to exert in the state capitol. Dieterle notes: One lawmaker even stated that voting to revoke Ricker’s ability to sell cold beer ‘goes against every grain in my free market body,’ but then turned around and voted for the legislation anyway.

He concludes: “Rather than spending their time defending anachronistic laws and targeting convenience stores that want to sell cold beer, Indiana should fix its booze laws. After all, no one likes warm beer.”...

The whole column can be found here.

For Dieterle's previous article on Indiana's warm beer law, see here.

Why cities should consider easing open-container laws

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R Street's Jarrett Dieterle and Jonathan Coppage wrote an op-ed for The Washington Post on why more cities should consider easing their open container laws to allow for public drinking. They argue that doing so is not nearly as extreme of an idea as it may sound:

Every September, thousands make their way to the District’s H Street neighborhood for the H Street Festival. The outdoor event features 10 blocks of live music, exhibits, karaoke stages, kids zones, mobile portrait studios and a fashion stage. But for an event that seemingly has everything under the sun, visitors are still forced to drink in the shade.

Aside from a “liquor garden” or beer garden, most of the alcohol consumption that takes place at the H Street Festival is required to occur inside nearby bars and apart from the rest of the festival’s activities. Most other city festivals around the country operate similarly, keeping drinking to dark interiors and away from the sunshine. But it doesn’t have to be this way. Several cities have recently relaxed their public drinking laws, and it’s time more consider following suit...

[S]igns are emerging that the pendulum may be swinging back toward more lenient outdoor drinking. In recent years, numerous cities have eased up on their public drinking restrictions, and now towns as distinct as Fort Worth, Tex., and Erie, Penn. — and many in between — allow some form of public imbibing.

Formerly sleepy suburbs and towns are trying to develop their own downtown core, to become a place and not just a collection of bedrooms. They have recruited restaurant and shops, overhauled their zoning and repaved their streets. City leaders have realized that keeping every guest of these new establishments locked up inside the bar where they bought their beer will keep the newly built town squares unnaturally empty. Seeking to to breathe life into these new, dynamic districts, towns such as Duluth, Ga., have opened up their outdoors. Relaxing drinking laws can create buzz and energy, since it helps attract both new businesses and residents and allows vendors to share customers and atmosphere in a positive-sum game, rather than a cut-throat competition to lock people up indoors...

Read the whole piece here.

Does Amazon Want To Sell You Booze?

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When technology advances quickly it can overwhelm outdated laws and regulations. In turn, lawmakers often feel pressure to reform these laws to keep pace. Amazon's purchase of Whole Foods may just be an example of such a technological event for alcohol. Mark Fritz of Byzinga writes about what the Amazon-Whole Foods deal could mean for booze:

"What does a $4,944 bottle of Hennessy cognac have in common with a $7.49 bottle of Mogen David “Mad Dog 20/20” red, rotgut wine? Both can be delivered to your doorstep these days, and it’s dooming the local liquor store.

It’s a familiar story of online sales creating a brick-and-mortar disruption, albeit with a kick. A much bigger kick.

Jeff Bezos is angling to be your main source of booze.

The $13.7 billion purchase of Whole Foods Market by Amazon.com, Inc. AMZN 0.63% will only increase pressure on states that currently limit household purchases of online wine, beer and spirits, which nevertheless reached more than $600 million in sales last year.

Amazon’s move into groceries isn't just about groceries. It represents an attempt to break into an alcoholic beverage industry that's conservatively estimated at $350 billion in the United States alone..."

Read the whole article here.

Pennsylvania’s Stealth Tax On Drinks

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R Street's Kevin Kosar writes about the Pennsylvania Liquor Control Board's recent decision to increase mark-ups on certain liquor products. He notes that the PCLB's mark-ups act as a stealth tax on consumers of booze:

Oh, Pennsylvania. You are wonderful in so many ways. Philadelphia has architectural marvels. Pittsburgh has the endlessly victorious Steelers and Penguins. The Allegheny and Poconos offer gorgeous vistas, and parks like Nockamixon are beatific places to hike and fish. And where else can one find ring bologna?

But your government, well, friends you have a problem. “No taxation without representation” is an age old creed in our nation. Yet, your government has a system that wantonly fleeces anyone who buys drinks.

Despite the 21st century’s arrival, the state maintains a system of government-run drinks shops... [Recently] the PLCB announced it was raising prices on 421 products. Its argument for doing so was blunt: legislators demanded PLCB pay $185 million into the state’s budget to cover rising public pension costs and other expenses.

What a mess. The state’s elected officials lack the courage to cut costs or raise taxes. Instead of presenting the public with the bill for the goods and services they consume, elected officials are hiding the true cost of government by shifting the burden to consumers of privately produced products. Do alcoholic beverages have anything to do with state pension costs? Nothing, of course.

And make no mistake, these mark-ups are a tax in disguise...

Read the rest of the column here.

The Story of Government and Cocktails

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In the latest issue of Reason magazine, Peter Suderman has a long essay on how Prohibition almost irretrievably killed artisan cocktails:

"The classic 'old fashioned' is the simplest of cocktails—sugar, bitters, and whiskey, stirred over ice, then served on the rocks with a citrus rind—and also, possibly, the best.

Thanks to the federal government, we almost lost it forever...

What happened between 1920 and 1934? Prohibition. With a few exceptions, the federal government banned the sale, production, and shipment of alcohol. Bars were closed. Distilleries were shut down. What drinking remained went underground.

When Americans came to their senses, passing the 21st Amendment and repealing the nationwide booze ban, drinkers bellied up to bars and asked for one of the few cocktails they remembered: an old fashioned. What they got would have been unrecognizable 20 years prior...

It wasn't just the old fashioned that emerged degraded and destroyed. It was the whole of pre-Prohibition cocktail culture—the knowledge, skills, craft, and supply that for decades had informed one of America's original culinary arts, and even the essential idea of the cocktail itself. In the space of a generation, the entire country went from inventing the cocktail as we know it to forgetting how to make a decent drink..."

The entire piece is well worth a read.

Can States Raise Revenue by Reforming Alcohol Regs?

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In many cases, states that are facing budget shortfalls target booze to raise revenue, oftentimes through increased alcohol taxes. But Patrick Gleason writes for Forbes about how some states have raised tax revenue from alcohol not through tax raises but by de-regulating the industry:

"In excess of 30 states reported budget shortfalls at the beginning of 2017. To balance budgets, some states have reduced spending and some have raised taxes. The most innovative lawmakers, however, are finding they can increase tax collections without raising taxes by removing unnecessary barriers to the sale of alcohol.

State and local governments from coast to coast impose a host of restrictions on the sale of beer, wine, and spirits . Most are unjustified relics. Too often, the motivation to put and keep many of these restrictions in place has nothing to do with public health or safety concerns. Instead the ultimate purpose is to protect politically well-connected stakeholders from competition. In the process, these protectionist regulations also inhibit industry expansion and economic growth.

Take South Carolina, where earlier this year state lawmakers enacted legislation that will remove restrictions on craft distillers’ ability to sell their product. This reform, which was signed into law in May, allows craft distillers to mix cocktails for customers visiting their tasting rooms and to serve up to three ounces of liquor, which equates to approximately two drinks.

Before passage of this law, craft distillers in South Carolina were only allowed to serve up to 1.5 ounces per customer in their tasting rooms, which is basically a shot. Further inhibiting their ability to sell and market their products, spirits served on-site had to be consumed straight and could not be mixed as cocktail...

Additionally, South Carolina distillers previously were only allowed to sell 750-mililiter bottles for off-site consumption, a quantity commonly referred to as a “fifth.” Under the new law passed this year, craft distillers will now be able to sell smaller sized bottles, such as mini-bottles and pints, for off-site consumption.

By lifting statutory and regulatory shackles that serve no purpose, these new rules for South Carolina distillers will allow them to increase sales and grow their businesses, which will translate into more tax revenue for state and local coffers..."

The whole article is worth a read here.

Is it time for Maryland to allow grocery stores to sell beer?

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Maryland is one of a few states that still restricts grocery stores from selling beer (notably, numerous states prevent groceries from selling distilled spirits), and more Marylanders are questioning the wisdom of this decades-old policy. The Baltimore Sun reports:

"Benjamin Schwalb loves good beer so much he brews his own. He has a leadership post in a local brewing club and, as a connoisseur, seeks craft brews at specialty stores in his Severna Park neighborhood.

Maryland’s long-standing prohibition on beer sales in grocery stores baffles him.

“Other states sell beer in grocery stores. Why not Maryland?” he asked. It’d be much easier to scoop up his next favorite brew without making a special trip. “Especially now with the explosion of craft breweries, consumers need more venues.”

The idea of grocery store sales is popular with consumers, but Maryland’s brewery industry is far less enamored with taking on the political fight. Doing so would require upending Prohibition-era laws that protect liquor stores from chain store competition..."

Read more here.

Liquor stores clash with the state of Michigan over competition rule

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As covered on DrinksReform.org, the state of Michigan is attempting to repeal its so-called half-mile rule, which prevents a liquor store from operating within a half mile of another liquor store. As reported by The Detroit News, the proposed reform is drawing fire from incumbent liquor retailers:

"A proposed change to Michigan alcohol rules would allow multiple liquor stores on the same street corner and hurt existing retailers, say critics who are expected to pack a Wednesday public hearing.

The Michigan Liquor Control Commission is attempting to eliminate the so-called half-mile rule, which has usually limited liquor stores from operating within 2,640 feet of one another since 1979. Hundreds of liquor store owners are expected to attend the hearing and speak out against the plan, according to the Associated Food and Petroleum Dealers, a trade group representing independent retailers.

The state says the rule is outdated and no longer needed.

The rule is “protectionist and anti-competitive,” said David Harns, a spokesman for the Michigan Department of Licensing and Regulatory Affairs. “It significantly inhibits the ability for businesses to get into the business or to grow their business.”

The five-member Liquor Control Commission also argues the half-mile location rule was supplanted by a 2016 law that primarily focused on allowing beer and wine sales at gas stations.

But liquor store owners say their businesses could be decimated if those locations could also apply to sell liquor..."

Read the rest of the article here.

 

Pennsylvania Should Get Out of the Liquor Business

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As previously covered on DrinksReform.org, Pennsylvania's Liquor Control Commission recently let slip that it was planning to raise prices on 422 items in its state-run liquor stores. The Inquirer's editorial board took the state government to task over this decision and calls for privatizing the state's liquor business:

The Pennsylvania Liquor Control Board’s decision to raise prices this week on hundreds of brands of wines and spirits is just the latest reminder of the need for lawmakers to privatize the State Stores.

The Liquor (out of) Control Board refused to disclose which brands received the price increase. But the costs of more than 400 products were increased by at least $1. More than two dozen of those items were jacked up between $2 and $100.

The price hike comes a year after Gov. Wolf signed Act 39, the latest Harrisburg Band-Aid designed to move the state beyond the antiquated Prohibition-era liquor laws. One of the “reforms” included in the measure gave the Liquor Control Board the ability to implement more flexible (read: higher) pricing.

Previously, the LCB had to settle for marking up its liquor products by just 30 percent across the board. Under the new and not-so-improved measure, the LCB can increase prices as much as it wants...

Of course, there is a simple solution to the state’s exorbitant pricing: Pennsylvania should get out of the liquor business altogether. Selling liquor licenses to private retailers would generate hundreds of millions of dollars for state coffers. More important, allowing competition would result in lower prices, greater selection, and better service for consumers...

You can read the entire editorial here.

 

In Effort to Shore Up Pension Shortfall, Oregon Targets Booze

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Oregon governor Kate Brown has created a special task force to explore options for shoring up Oregon's $22 billion public pension deficit. Ideas include "commercializing" Oregon's Liquor Control Commission and raising the state sales tax on alcohol. Full privatization of the control state's liquor system was rejected on account of worries that the state couldn't get "the best price" if it divested its stake in the system now. The Register-Guard has the full story:

Oregon could buy down its $22 billion public pension deficit by further commercializing its state-run liquor system, raiding a variety of big public reserve funds or imposing new surcharges of up to 10 percent on all state-­issued permits, licenses and registrations...

Big changes to the Oregon Liquor Control Commission and SAIF, the state workers’ compensation agency, are among the task force’s most developed ideas so far.

Blair said the state could change OLCC rules and practices so that it generates more than the current $287 million it now does annually for state and local governments.

'The way (liquor) is purchased, priced and distributed is not necessarily the way a commercial operation' would do it, Blair said.

For example, Oregon now has one liquor store per 15,000 people — far below the national average. The state could rapidly expand the number of stores in operation. It also could switch to a centralized purchasing system, so stores aren’t all ordering their own products individually through the OLCC. And the OLCC could be allowed to market or promote the liquor it sells.

While the task force initially discussed fully privatizing OLCC, Blair said that selling the agency before its full commercial potential is realized would mean 'you wouldn’t get the best price.'

But task force member Charles Wilhoite of Willamette Management Associates said that a more aggressive approach at the OLCC might raise moral questions about the state promoting alcohol consumption.

Greater commercialization 'will necessarily result in more drinking,' he said.

The task force also is floating a new state tax of between 1 percent and 10 percent on liquor sales with the proceeds — between $10 million and $50 million — dedicated to PERS. It might recommend lifting the current ban on cities and counties passing their own alcohol taxes as well..."

Read the rest here.