Dismantling Alcohol Regulations: It’s About The Money

Source: Forbes

Thomas Pellechia Contributor

June 14th

The first step President Franklin Roosevelt took when the country was on its way toward Repeal in 1933 was to sign a bill to allow beer at 3.2 alcohol-by-volume. That move lingered in Colorado (CO), where grocery and convenience stores were limited to 3.2 beer until 2016.

In addition to 3.2 beer, CO imposed on each grocer a limit of one license restricted to one location. Even CO liquor stores with a full-strength alcohol license have been limited to one license, one location.

The Distilled Spirits Council of the US pushed for a ballot initiative for this November to allow voters to decide whether changes are needed in CO, and chain stores like Wal-Mart and Safeway have been behind a move to change the rules.

The push for change culminated recently when the co-founder of Denver’s Wynkoop Brewing and now CO Governor, John Hickenlooper signed a bill that, beginning in 2017, allows wine, spirits and full-strength beer sales into grocery stores. Under the bill, the limit on licenses is up from one to five.

In an attempt to prevent damage to liquor stores, especially the small mom and pop types, grocery stores applying for a full license must be situated 1,500 feet or more from the nearest liquor store (3,000 feet in localities with fewer than 10,000 people). In a further attempt to protect liquor stores, the new rules stretch out over twenty years. In 2022, the license limit goes to eight; in 2027 it goes to thirteen. By 2037, grocery stores will be allowed up to twenty licenses.

Still, grocery chains are not happy. They want the changes to come faster. They believe they have the consumer on their side, which is likely true, since most alcohol regulations after Repeal were designed to be anti-consumer.

Meanwhile, have you ever wondered why you often have to bring your own wine to dine at a New Jersey (NJ) restaurant?

NJ issues one restaurant alcohol license for every 3,000 residents in a locality. A new restaurant either buys an existing license or goes without, which has the wonderful effect of inflating the license’s value to as high as millions of dollars.

If NJ Democrat Assemblyman John Burzichelli has his way there will be a new class of alcohol license for restaurant table service only. The license would cost from $1,500 to $5,000, depending upon which alcohol a restaurant chooses to serve: beer, wine, spirits or a combination of products.

The assemblyman says mayors across NJ need help revitalizing their downtown areas and restaurants are crucial to that effort. But many development projects that include restaurants fall through because of licensing restrictions.

What about those restaurants that paid millions for licenses that will lose value?

The proposed change would allow them some tax credits.

Then, there’s Pennsylvania (PA). Each time legislation has been proposed to privatize that state’s total control over alcohol perceived loss of revenue prevented it from moving forward. Not this last time. Governor Tom Wolf recently signed a bill to allow takeout wine sales in groceries, restaurants, bars and hotels. The bill also gives convenience stores beer sales.

In what has to be a stellar example of truth-telling, the governor hailed the bill as providing greater customer convenience. That’s because in the past, the PA system limited consumer choice. This bill gives state-owned stores freedom to establish hours and to decide on which products to sell. More important, the bill allows Pennsylvania residents to receive direct shipments of wine from out-of-state producers, which caused celebrations in New York’s Finger Lakes region, where PA accounts for 40 percent of its tourists. As of this August, Finger Lakes wineries will take PA orders to go.

The Distilled Spirits Council of the US is not happy; neither is United Food and Commercial Workers Local 1776, the labor union that represents PA’s monopolized retail shops. They claim the change will hurt state revenue.

After all the alcohol rules have been dismantled and state legislators seek something to do, I have a suggestion that can save our culture: prevent the development and sale of synthetic wine.