Beer and Politics

We here at Beerjanglin’ prefer to remain apolitical — at least as far as this here site is concerned — and yet we were intrigued by an October 15, 2008, article on the free-market advocate Reason.com called “How Your Beer Bought John McCain’s $500 Loafers.” (Hat tip to my brother-in-law Scott; the article has tons of helpful reference links.)

On one hand, it is a criticism of McCain and what the author perceives to be McCain’s disproportionate wealth, but it’s also a damnation of the antiquated distributor laws that are decades old, and that actually prevent free commerce between states for apparently no good reason.

According to the article, these “three-tier” laws are to the benefit of the wholesaler, but to the detriment of the customer. The wholesaler, the article asserts, simply marks up the price of each alcoholic beverage 18-25% for the trouble of distributing it. The distribution lobby apparently is trying to ban alcohol sales over the web so as to close a loophole in which they would not be the middle-man.

The article certainly paints the alcohol-distribution industry as one that is woefully out of date, especially in the wake of free trade and a global economy. (The article also accuses Anheuser-Busch of “distributors to drop the products produced by its competitors.”

The article cites four main arguments by the wholesale industry:

  1. Wholesaling allows a bottleneck by which the government can collect all their alcohol taxes in one convenient location.
  2. Wholesalers act as a quality-control protection agency against poisoned and/or tainted beer.
  3. It creates 91,000 jobs and a $15 billion on the national economy (both claims the article questions)
  4. The wholesalers are a gatekeeper that regulate the distribution of alcohol from brewery/winery to consumer, since alcohol is, in fact, a drug.

On a micro level, it’s clear that it doesn’t make sense for states to create an alcohol bureaucracy that limits the free commerce of beer, wine and spirits. It’s a Good Ol’ Boy Network policy that does nothing for consumers other than make beer more expensive and harder to obtain.

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~ by William H on October 22, 2008.

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