Saturday, October 25th, 2014

Washington Voters Miss the Point: Markets are Fair and Orderly

Washington State voters rejected an initiative that would have re-organized this industry simply to make it more rational, market-based, and fairer. The initiative, discussed in an earlier post, simply would allowed retailers to buy wine, spirits, and beer direct from producers and would have allowed private shops — rather than government agencies — to sell spirits.

Why on earth would consumers reject this? Quite frankly, I am dumbfounded that they did. These regulations largely exist because special interests have a really good lobby and ample PAC money. But consumers didn’t seem to get that message. Many people actually believe that bureaucracy and special-interest laws serve the public good by ensuring children are protected and that that alcohol markets are orderly and fair. This was the rationale of the temperance movement that brought us prohibition — which created a disorderly, unfair mess governed largely by organized crime. But still, we haven’t learned.

There aren’t good data to support the view that inefficient government monopolies and economic protectionism serve “temperance” goals in any case.

But these debates are not about data or “the facts.” They are about values — and our job is to communicate to consumers how the values of freedom, fairness, and public order are not well served by messy economic regulations. Maybe we can start by looking at other regulations — many of which are very silly and easy to grasp.

For example, I recently called a Virginia restaurant to see if I could bring my own wine. Guess what? Such corkage is against the law in Virginia! Supposedly, corkage threatens the “three-tier system,” which only allows restaurants to serve alcohol that they bought from wholesalers.

How does this meet our need for order or fairness? It doesn’t. It takes away some of life’s little pleasures (totally unfair), particularly for those who can’t afford wine on the restaurant list. In states where corkage is allowed, some restaurants even offer “free-corkage” on at least one day a week. And there is nothing disorderly about that!

Here it the specific law from the Virginia Code pasted below.

§ 4.1-315. Possession without license to sell alcoholic beverages upon premises of restaurant; exceptions; penalties.

A. No alcoholic beverages shall be kept or allowed to be kept upon any premises or upon the person of any proprietor or person employed upon the premises of a restaurant or other place where food or refreshments of any kind are furnished for compensation, except such alcoholic beverages as such person owning or operating such place of business is licensed to purchase and to sell at such place of business.

Image credit: Joe Shlabotnik photostream on Flickr.

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Comments

2 Responses to “Washington Voters Miss the Point: Markets are Fair and Orderly”
  1. Eryn Supple says:

    I am also dumbfounded by the rejection of this proposition. I had a few discussions with those in the industry…the main theme was that they were horrified to think of being able to get liquor from almost anywhere. That plus they were nervous that wine space on shelves would diminish down to half of what they are now due to liquor placement. I would assume there would be a limit to the number of liquor licences they handed out. Plus so many stores do not want to deal with liquor in their businesses.
    That’s what I got for you.

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  1. [...] against spirits probably because they think it makes them more competitive. For example, a comment to a recent post on Winepolicy.com noted one reason wine and beer industry players opposed [...]



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