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R Street's Jarrett Dieterle Explains Tennessee Wine v. Blair SCOTUS case

Oral arguments were held yesterday in the important Supreme Court case challenging Tennessee’s durational residency requirement for liquor licenses (for more on how the oral arguments went see here). The case involves the intersection of the U.S. Constitution’s 21st Amendment and the Dormant Commerce Clause, and R Street’s Jarrett Dieterle filmed the following short explainer video about the case for the Federalist Society:


It's Time to Repeal Utah's 'Weak Beer' Law

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Utah is one of just two states in the country that permits grocery stores to only sell beer with 3.2-percent alcohol content or less. R Street’s Jarrett Dieterle took to the pages of The Salt Lake Tribune to call on Utah lawmakers to repeal this outdated restriction:

As Utah lawmakers begin the 2019 legislative session, they may be forced to finally confront one of the state’s most notorious legal relics. Utah remains one of only two states in America to forbid grocery convenience stores from selling beer containing more than 3.2 percent alcohol. Any beer with a higher alcohol content — which, in this era of craft brewing, is most modern beers — can only be sold at state-run liquor stores. Utah legislators would be wise to recognize this law for what it is: A woefully outdated rule that handicaps market forces and limits consumer freedom.

So-called “weak beer” laws trace their heritage back 85 years to the end of Prohibition. In an underappreciated historical moment, President Franklin Roosevelt and Congress passed a law called the Cullen-Harrison Act March 22, 1933, nearly nine months before Prohibition was officially repealed. The act allowed states to pass legislation that would permit the production of 3.2-percent beer — a big step forward at a time when alcohol production was prohibited across the country. The Cullen-Harrison Act was eventually superseded when Prohibition was repealed in toto, but many of the state-level 3.2-percent beer laws it permitted stayed on the books.

Over the last several decades, more and more states have taken steps to repeal these laws, but Utah has remained a stubborn outlier…

Read the rest here

NEW: America's Dumbest Drinks Laws

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In honor of Repeal Day, we released a new drinks report! Earlier this year, our DrinksReform team put out a call for readers to send us examples of the craziest, whackiest, most nonsensical alcohol laws they could find. We scoured the Internet, interviewed industry players, and combed through state legal codes to find the “worst of” when it came to booze laws across the country. Today, we debut the culmination of that effort, a new report titled “America’s Dumbest Drinks Laws.”

That’s right, we picked the 12 dumbest drinks laws in America and ranked them. We’ll let you read the report for the full rankings, but we wanted to pass along one happy note: The “winner” of the #1 worst alcohol law—a 1834 federal law that banned Native Americans from distilling on tribal grounds—was recently relegated to the dustbin of history. A bill repealing this outdated and offensive law passed both the U.S. House of Representatives and Senate and is headed to the President’s desk.

R Street’s Kevin Kosar and Jarrett Dieterle wrote the first article in any mainstream outlet about the Native American distilling ban when they penned an op-ed earlier this year in the New York Times calling for the law’s repeal. We like think to think that we get results at the R Street Institute, and we’re proud that the law we targeted as the #1 worst alcohol law in the country has officially been eliminated.

Now, onward to #2 and #3! (Looking at you, North Carolina and Indiana …)

Check out the full report here—and prepare to be outraged! For a more condensed summary of the report, Dieterle wrote a Repeal Day piece for the Washington Examiner about it.

Additional media coverage for the report:

Trump Hotel keeps its liquor license — and that’s as it should be

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As covered last week, a recent attempt to yank the liquor license from the Trump Hotel in Washington, D.C. has failed (for now). Although Trump’s opponents will surely be disappointed, R Street’s Jarrett Dieterle and Jonathan Haggerty wrote a piece for the Washington Post discussing why using “good moral character” laws to strip liquor licenses is a bad idea:

What do the president of the United States and an ex-convict from Michigan have in common? They’ve both been involved in legal disputes with the government over their fitness to hold a license.

President Trump — or rather, his hotel, the Trump International Hotel in Washington — holds a license that allows it to legally sell liquor. The Michigan man, Mike Grennan, sought to obtain a license to become a homebuilding contractor. Both situations demonstrate the potentially pernicious effects of so-called “good moral character” clauses in state and local licensing laws.

In June, a group of religious leaders and former judges filed a complaint with D.C.’s Alcoholic Beverage Control Board arguing that Trump — and thus, the Trump Hotel — was unfit to hold a liquor license. Their claim is based on the “good moral character” provision in the District’s licensing law, which requires owners of drinking establishments to be of sound moral character to serve alcoholic beverages…

While Trump’s detractors may be disappointed by the decision, there is good reason to celebrate it. Good-moral-character clauses are notoriously vague, which makes them ripe for abuse by local government officials. The D.C. law does not define “good character,” according to Alcoholic Beverage Control Board spokesman Max Bluestein, and some states, including Michigan, do so using ambiguous terms, such as, “[T]he propensity on the part of the person to serve the public in the licensed area in a fair, honest, and open manner.”

Such open-ended language allows officials to use good-moral-character clauses in improper ways, such as targeting political enemies or, even worse, blocking well-meaning citizens from obtaining employment. This is because licensing boards around the country can, and often do, interpret good-moral-character clauses to mean that anyone with a prior criminal conviction is automatically disqualified from holding a license — regardless of the prior offense’s relation to the nature of the job the applicant is seeking…

Read the whole article here.

Why Rebranding Sin Taxes as "Health Taxes" Doesn't Fix Anything

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There's been a recent wave afoot to rename sin taxes as health taxes. R Street's Kevin Kosar writes for American Spectator about how this doesn't alleviate any of the drawbacks of using sin taxes:

Have you heard the news? So-called “sin taxes” — particularly those on alcoholic beverages — are being rebranded as “health taxes.” It’s true...

Former New York Mayor Michael Bloomberg and other public health advocates think sin taxes should be called and viewed as “health taxes.” Certain activities and products, like gambling and booze, issue “externalities” that are born by the community collectively. They say the overwhelming evidence indicates that higher taxes on alcohol and other vices will reduce excessive consumption and the associated health costs.

For sure, alcohol addiction and severe abuse is damaging. Anyone who has ever known an addict can speak to the awfulness and tragedy of it all. The same goes with compulsive gambling, which is horrifically costly.

So, what’s not to like about a sin or health tax?

Plenty. Dressing up the sin tax as a “health tax” sweeps under the rug some of the problems with this policy tool...

Read the rest of Kevin's column here.

 

How Does Protectionism Hurt Our Drinks?

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Last weekend, R Street's Daniel DiLoreto discussed the alcohol industry's protectionist policies in the Washington Examiner. The Trump tariffs are detrimental, and many state policies have the same impact. They increase prices and stifle consumer choice:

President Trump’s tariffs are putting a dent in the good ole American six pack. This spring, craft breweries braced for impact, as additional charges on steel and aluminum are likely to make cans and bottle caps more costly to produce. “Any raise in the cost of cans will be immediately felt,” explains Justin Cox, founder of Washington, D.C.’s, Atlas Brew Works. Cox says he’ll be forced either to cut back on labor or charge consumers higher prices.

Nevertheless, while the tariffs have made national headlines for harming American industries, similarly costly state-level policies that affect alcohol have received less media attention. Like tariffs, however, state protectionism also hurts the booze industry by increasing production costs and raising prices for consumers. Consequently, while Trump’s tariffs deserve criticism, efforts to push back against protectionist policies should not be confined to the national level...

Read the whole article here.

#Actually, Beer Pitchers are Bad

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Last summer, R Street’s Cameron Smith caused a stir by calling out Alabama’s interpretation of a regulation that targeted margarita pitchers. The Alabama Alcoholic Beverage Control Board was forced to backtrack, conceding that it would leave the pitchers alone.

But don’t be fooled: Unruly drink pitchers are hardly confined to Alabama. In fact, our nation’s capital was recently forced to enact an even stricter rule to control its pitcher epidemic. Thanks to some quick-thinking government officials, D.C. law now officially prohibits customers from picking up pitchers and carrying them around a restaurant.

This regulation is a great example of local government attempting to respond to one of the paramount threats of our day. In fact, the only problem we can see with D.C.’s rule is that it fails to fully appreciate just how dangerous pitchers truly are.

It all started last year when D.C.’s Alcoholic Beverage Control Board implemented a new rule declaring that bars and restaurants were allowed to offer bottle service to their customers, so long as they did not “allow any patrons to remove the bottle or pitcher from the table.”

The regulation’s purpose is to “curb the practice of patrons wandering around the establishment with large containers containing multiple servings of alcoholic beverages.” Cracking down on wandering drink containers is important, of course, because “large containers may be used as weapons during altercations.” After all, who among us hasn’t visited a restaurant and ordered a pitcher of our favorite boozy beverage, only to drown its contents and use the empty container to smack a fellow patron upside the head?

For starters, pitchers have intricately designed handles that ergonomically mold to the human hand, allowing customers to arm themselves faster than you can say: “I’ll have a pitcher of Miller Lite.” But pitchers can be weaponized in less intuitive ways, too. In addition to being useful for whacking surly bartenders, shattering a glass pitcher can create dangerous shards handy for stabbing fellow bar patrons. Large containers of alcohol can also be a fire hazard (alcohol is flammable, after all).

And don’t even get us started on spills. Every week, dozens of clumsy D.C. bar-goers order pitchers of booze only to spill their contents on their nicest Sperry Top-Siders. Spilled beer not only ruins leather shoes, it also turns dance floors into slippery skating rinks primed to trigger costly slip-and-fall lawsuits. While spillage risk is also present with pint glasses, the potential harm caused by a dropped pitcher is much more significant (to paraphrase Biggie: Mo Liquid Mo Problems).

In the end, the flaw with the ABC’s new rule is obvious: It is not concerned enough with the victims of pitcher-crime.  Ideally, we would outlaw drinking establishments altogether, as they are a clear danger to the public. However, as pragmatic advocates, we recommend one of two policy solutions for D.C.’s deficient pitcher law: Either #BanThePitcher entirely, or arm every person in every bar in the District with their own pitcher for self-defense.

If we ban pitchers completely – coupled with felony convictions and jail time for anyone found still carrying one within District limits – then we can stop pitcher-fueled bar fights and catastrophic spills before they even happen. But if a complete ban is a step too far, let’s at least fight fire with fire. We should give every policy wonk and congressional staffer in every D.C. bar his or her own pitcher to wield in self-defense. That way, the next time someone pours beer on your new Tory Burch flats, you can respond in kind by dousing them with a jug full of PBR. Not only will this bring justice to such abhorrent crimes, it will likely deter them from happening in the first place.

It’s long past time for the D.C. government to show that it cares about its citizens by escalating the war on pitchers. Remember: People don’t kill people, pitchers kill people.

C. Jarrett Dieterle is the director of commercial freedom and a senior fellow at the R Street Institute, as well as the editor of DrinksReform.org. Daniel DiLoreto is a policy intern for commercial freedom at R Street.

Why Can’t Native Americans Make Whiskey?

Image courtesy of  New York Times

Image courtesy of New York Times

R Street's Jarrett Dieterle and Kevin Kosar took to the pages of the New York Times this week to explain why Native Americans are still not allowed to distill on tribal lands. The reason traces back to an antiquated 1834 federal law, which they argue its far past time to repeal:

In 2016, the Confederated Tribes of the Chehalis Reservation, in southeastern Washington State, began selling craft spirits and beer at a restaurant in their Lucky Eagle casino. But when the Chehalis wanted to start making their own hooch, the federal government said no.

The Bureau of Indian Affairs informed the tribe that federal law prohibits the building of a distillery on tribal grounds. The Chehalis would have to continue to purchase spirits from producers off the reservation.

Small-scale distilling is a booming business, providing much-needed jobs and revenue for state and local governments. So why are Indian tribes legally prevented from joining in? ...

Read the whole piece here.

 

 

Texas Brewers Battle the Three-Tier System

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Regulations in Texas that separate production, distribution, and retailing of alcohol continue to meet strong opposition from local brewers. The Wall Street Journal reports on the ongoing battles in the Lonestar State:

Small brewers are squaring off against distributors and bar owners in a fight for drinkers as craft beer’s once-explosive growth cools...

Growth is being driven entirely by direct sales from brewers to customers, mainly through taprooms and brewpubs. Direct sales last year grew by 24%—accounting for one in 12 craft beers sold— while the remainder of craft-beer sales declined, according to the Beer Institute.

Small brewers are eager to capitalize on the trend—selling direct makes for higher margins— but many distributors and bar owners are feeling shortchanged.

In response, the two sides are waging a lobbying war across the U.S. over exceptions to the post-Prohibition “three tier system” that keeps the production, distribution and retailing of alcohol separate in many states.

Learn more about this lobbying battle here.