Op-ed

R Street's Kevin Kosar on the Anniversary of Prohibition Repeal

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December 5 was the anniversary of Prohibition ending in the United States, now celebrated as Repeal Day. To mark the occasion, R Street's Kevin Kosar recounted the history around the failed experiment in a column for the Washington Examiner:

"Plenty of hooey comes from the mouths of elected officials. Arguably, the prize for the nuttiest statement of all might go to the late Sen. Morris Sheppard, D-Texas. In 1930, he haughtily declared, "There's as much chance of repealing the 18th Amendment as there is for a hummingbird to fly to Mars with the Washington Monument tied to its tail."

Sheppard, who spent three decades in Congress, was an anything but an impartial observer. The Texas Democrat had sponsored the constitutional amendment to ban drink and fought successfully for the Volstead Act and other anti-hooch laws. He was often called the father of prohibition, although in truth, this ugly progeny had many parents. Nativists, feminists, evangelicals, captains of industry, and paternalistic progressives joined to form a crazy quilt coalition against drink.

For nearly 14 dark years (1920-1933), the production and sale of alcohol was largely banned..."

Read the rest here.

When the Whiskey Making Was Hard, But the Government Was Easy

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R Street's Jarrett Dieterle recently attended the 10th anniversary celebration of George Washington's rebuilt Mt. Vernon distillery. He wrote the following piece for Reason about whiskey making during Washington's time and how it was harder in every way except dealing with the government:

George Washington's rebuilt distillery at Mount Vernon recently celebrated its 10th anniversary with a team of master distillers from around the country producing a commemorative rye whiskey using the old-fashioned methods of Washington's time.

When Mount Vernon farm manager James Anderson pitched the idea of opening a whiskey distillery to Washington in 1797, it was hardly a novel idea. Many early Americans distilled alcohol and whiskey surpassed rum as the young nation's spirit of choice after the Revolutionary War.

Despite a somewhat saturated market, Washington quickly distinguished himself in the whiskey business—his distillery would become one of the largest in the country, producing 11,000 gallons during its peak years.

Washington's success should not obscure the fact that making whiskey at the turn of the 18th century was hard. Everything about the whiskey-making process—from milling the grain, to stirring the mash, to firing the stills—was an order of magnitude more difficult than today's mechanized and streamlined process...

Entrepreneur that he was, Washington would be awed by the technological advancements in distilling capitalism has created—advances that, ultimately, have resulted in the wonderfully consistent and smooth whiskeys we enjoy today.

His awe would surely turn to disgust if someone tried to explain to Washington the modern-day nightmare that is the Virginia Alcoholic Beverage Commission. For all of the hard work to produce liquor in his time, dealing with the government was easy...

Read the whole piece here (including a neat video on the distilling process at Mt. Vernon).

Why Cities Should Consider Relaxing 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.

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.

Debate: Should Massachusetts Raise Its Alcohol Taxes?

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As a Massachusetts task force considers ways to modernize the state's alcohol laws, The Boston Globe has hosted an ongoing debate on whether the Bay State should raise its alcohol taxes. The debate has featured multiple different voices arguing "yes" or "no" to the tax raise. Here's a sample:

YES

Kerrie D’Entremont, Executive director, Greater Lowell Health Alliance

Today, when someone says “substance abuse,” the first thing many people think of is opiates. But there is another form of substance misuse and abuse that we as health professionals have been fighting for well over 30 years: alcohol...

Excessive drinking has serious consequences. One in three car accidents in the United States involves drunk driving, and according to American Health Rankings, an average of 2.5 million years of potential life were lost annually due to excessive drinking from 2006-2010. Binge drinking also puts a strain the economy. In 2010 the median cost of excessive drinking was about $5.6 billion in Massachusetts. Whether an individual participates in excessive drinking or not, we all pay.

So how do we reduce the excessive drinking rate and the drain on our wallets? One of the strategies recommended by a federal task force in 2015 was to increase the tax on alcohol. The research suggests that there is an indirect link between the cost of alcohol and the number of deaths and injuries that are related to alcohol use. Simply put, “for every 10 percent increase in price, alcohol consumption is expected to decrease by more than 7 percent,” the task force said...

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NO

Joe Selby, Owner, Kappy’s Fine Wines & Spirits, Everett

 

Next time you’re in New Hampshire, take a spin through one of the state liquor store parking lots and pay special attention to the number of Massachusetts license plates you see. Every time a Massachusetts resident shops in our neighboring state, the Commonwealth loses money through lower business and payroll taxes paid by Massachusetts businesses, and lower alcohol excise taxes collected from the Commonwealth’s liquor, wine, and beer wholesalers.

Now, Beacon Hill is entertaining a proposal to shift more revenue to New Hampshire, by raising alcohol excise taxes here in Massachusetts. People heading over the border to shop is a longstanding problem for Massachusetts, but the state seems all too eager to not only exacerbate the problem but to do so on the backs of the Commonwealth’s lower-income residents, who tend to be the hardest hit by ultra-regressive taxes like excise taxes...

You can read the rest of these opinions here, and another point vs. counter-point on the tax here.

Alabama ABC's Twitter reads like somebody's been drinking

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R Street's Cameron Smith takes a look at the Alabama ABC's Twitter account. The results are equal parts hilarious and befuddling:

"Alabama's Alcoholic Beverage Control Board (ABC) is a bit of a contradiction in terms. By it's own admission, the ABC exists to ensure "high revenue with low consumption." It's little more than contradictory booze magic if any of us bother to think about it.

Increased consumption means increased revenues. Decreased consumption means the opposite. With that kind of contradiction, it's no wonder that the ABC's Twitter account is a bit tipsy.

Just take a look at 2017 so far..."

The whole piece is well worth reading.

 

Alabama ABC reverses margarita pitcher ban but questions remain

As recently covered on DrinksReform.org, R Street's Cameron Smith called out Alabama's ABC about its state-wide crackdown on margarita pitchers. In a new piece for AL.com, Smith recounts the whole episode and discusses how the legal standard at issue is still far from clear:

The Alabama Alcoholic Beverage Control Board (ABC) didn't want you wasting away in Margaritaville, so they banned pitchers of the frozen concoction outright. Then I called them out on it, Alabamians pressured the agency, and the ABC reversed the pitcher ban...I think

In reversing the ban, ABC spokesman Dean Argo announced, "The Code speaks to beverages that are 'customarily' served in pitchers." That's a true statement even if it's found in a different section from the one the ban relied upon.

He continued to note, "The menus of many restaurants and bars in Alabama already offer several beverages by pitcher." That's a fuzzier claim, because Argo told me unequivocally "that only beer may be served in a pitcher." According to his statement, pitchers of other alcoholic beverages might have appeared on menus, but the ABC considered them unlawful. 

Argo concludes the ABC's announcement by saying the "updated interpretation should give licensees the flexibility they need to meet the needs of their customers, while maintaining the integrity of the original rule." 

Well that's clear as mud...

Read the whole column here: http://www.al.com/opinion/index.ssf/2017/07/alabama_abc_reverses_margarita.html

 

Alabama Backs Down on Targeting Margarita Pitchers

In these hot summer months, nothing refreshes like a Margarita. But in Alabama, the state Alcoholic Beverage Control Board had banned pitchers of this limey and refreshing libation. Seriously.

R Street's Cameron Smith exposed the ban and advocated for its repeal in AL.com after a series of email exchanges with ABC representatives:

"The Alabama Alcoholic Beverage Control Board (ABC) doesn't want you wasting away in Margaritaville, so they've banned pitchers of the frozen concoction outright.

No, I'm not joking.

But we shouldn't be surprised. This is the ABC that cracked down on people drinking while dining on the sidewalks in Mobile. It's the same ABC that cut a deal to impose a five percent liquor mark-up to help the legislature and the governor enact a back-door tax hike.

Now the agency has taken to reminding licensees of its legal "interpretation" that beer is the only alcoholic beverage that may be served in a pitcher..." [Read the rest here].

ABC claimed it was concerned with the tequila in margarita pitchers "settling" over time, which could lead to situations where the first few drinks poured from the pitcher had less alcohol than the ones from the bottom of the pitcher. As Smith pointed out, this amounted to an argument that a group of legal adults "can't figure out how to handle a pitcher of margaritas shared among them."

Smith's column generated enough outcry among Alabama residents that Dean Argo, ABC's government relations manager, took to AL.com to announce that the board would no longer target margarita pitchers. In short, ABC has backed off, at least for now. (The Associated Press also covered the reversal).

While this was a clear win for margarita lovers across the state, Argo ominously suggested that the state may still draw a line between which types of drinks can be served in pitchers and which cannot. The dividing line would appear to be if the drink in question is "customarily" served in pitchers. So, margaritas and beer would seem to be safe, but what about less clear cases like mojitos? Mojitos are certainly served in pitchers sometimes, but is it "customary" to serve them that way? And how about bottled cocktails, which have become all the rage in the cocktail world? Are they a "pitcher," and if so, are they "customary"?

The ABC's decision to draw the line at what types of drinks are "customarily" put into pitchers is the type of ambiguous legal phrase that only a government lawyer could love. Call it "pitcher ambiguity," and suffice it to say the DrinksReform.org team will be the first to blow the whistle if more pitcher shenanigans go down in Alabama.

Note: Cameron Smith has also been tracking and writing about the Alabama ABC's attempt to enact a stealth tax increase by increasing the state liquor mark-up: http://www.drinksreform.org/blog-1/2017/6/21/alabama-abc-board-approves-increase-in-liquor-markup