Finding a 21st Century System for Booze

21st-century-drinks-systemTraverse City, Michigan (population 15,000), is a gorgeous bay town near the northern end of Lake Michigan. The town, which oozes charm, has very good restaurants and genial denizens. In the autumn, both salmon and steelhead run through the Boardman River, which snakes through town.

But Traverse City also was a slightly amusing choice for the National Conference of State Liquor Administrators meetings that I attended there last week. The Great Lakes have a long history of rum-running, as Edward Butts details in his diverting 2004 book “Outlaws of the Lakes: Bootlegging and Smuggling from Colonial Times to Prohibition.” Three centuries ago, Antonione Alumet de la Mothe Cadillac, best-known for founding Detroit, peddled massive quantities of illicit brandy from his stronghold in Mackinac, 100 miles north of Traverse City.

The NCSLA meets a few times each year. Among other things, the meetings are an opportunity for both drinks regulators and the regulated drinks makers to meet and talk policy. Every state has its own ways of managing drinks, some of which work better than others. So the meetings also are an opportunity for the booze-acrats to share information and advice about how to improve their regulations and better do their jobs.

Despite diversity among the states, every one of them has a three-tier drinks system. There are producers (brewers, distillers and vintners), wholesalers and retailers (shops, bars and restaurants). Anyone who operates in one tier of the system is not supposed to operate in another tier.

The three-tier system arose after Prohibition. Certainly, it is better than the tied house system. The last thing consumers want are mega-producers buying up all the shops and bars and allowing them only to stock mega-drinks. Buy with each passing year, the three-tiered is looking a little more anachronistic….(Read more at the R Street Institute Blog)

 

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Congress May Lower Taxes On Drinks

CDC 4th of July
The Beer Institute recently reported some happy news: 51 U.S. senators support a bill to lower federal drink taxes. The Craft Beverage Modernization and Tax Reform Act of 2015 (S. 1562) would:

  • Lower the federal excise tax to $3.50 per barrel on the first 60,000 barrels for domestic brewers who make fewer than 2 million barrels per year;
  • Reduce the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and all beer importers;
  • Maintain the current $18-per-barrel rate for brewers who produce more than 6 million barrels;
  • Lower the tax on liquor for the first 100,000 gallons produced from $13.50 to $2.70 per gallon; and
  • Exempt home distillers from federal taxes.

The bill also would enact several other reforms….(Read more at the American Conservative)

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One of India’s most-populous states recently banned alcohol. Mayhem ensued.

Source: Wikipedia
Source: Wikipedia

When will the politicians learn? Prohibition does not work. 

The Washington Post’s Rama Lakshmi reports on the very bad things that are resulting from the banning of booze in Bihar.

The Danish beer company Carlsberg set up a gleaming green-and-gray factory in Bihar in 2012. But since April, it has stopped production. More than 600 laborers are now out of work. “Liquor was the social glue of parties, friendships, celebrations and conversations,” said Sanjeev Singh, who was forced to close three of his restaurants in Bihar’s capital of Patna after business dropped. Hotel bookings for corporate conferences and resorts also are down, and the rich are moving their wedding parties out of state. Meanwhile, bootleggers are selling liquor at three times the cost. Officials have seized liquor bottles crossing into Bihar in trucks filled with cattle feed, sacks of salt and bicycle parts. Police have found liquor hidden inside school bags, vegetable baskets, cooking-gas cylinders and even ambulances….” (Read more at the Washington Post)

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Prohibition Era Laws Live on in DC, Maryland, and Virginia

Ben Carnes Green HatFans of the HBO drama Boardwalk Empire will no doubt recall the series’ many Prohibition-era scenes featuring high-level politicians rubbing elbows with bootleggers and openly imbibing in private, even as they assailed the purported societal dangers of the “devil’s brew” in public. One needn’t look further than the story of George Cassiday for a glimpse into one of the many historic precedents that inspired such vignettes.

Cassiday was a World War I veteran who, upon returning home from Europe, found bootlegging to be a sufficiently lucrative means of making a living. He found an especially promising market in selling his contraband liquor to members of Congress, many of whom were vocal proponents of the very same Prohibition that necessitated his nefarious actions….(Read more at the R Street Institute Blog)

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Maryland’s Alcohol Agency Brags That It Screws Up Only 15 percent of Its Deliveries

Despite being a monopolist, Maryland's DCA sells less. Source: Distilled Spirits Council of the United States
Despite being a monopolist, Maryland’s DLC sells less. Source: Distilled Spirits Council of the United States

Maryland’s Montgomery County is a nice place. Its western border runs along the Potomac River and its southern territory abuts Washington. Many folks who work in the district settle in Bethesda and other parts of Montgomery County, as the schools tend to be better and the property prices lower. It is Maryland’s richest county, and boasts many attractions.

But Montgomery County is a case study in the peril of allowing the government to enter the drinks business. In short, once the government gets in, it is very hard to get it out, no matter how badly it performs…. (Read more at the R Street Institute Blog)

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