Ending State Liquor Monopolies

Wednesday, June 20th, 2012

Jonathan Turley, in USA Today.

Seventeen states continue to exercise control over liquor as absurd relics from the 1930s. Ironically, there is no better example of the failures of central planning than the “ABC stores” around the country from Alabama to Pennsylvania. Indeed, if Karl Marx were alive and trying to buy Schnapps today, he might reconsider aspects of Das Kapital after dealing with our central alcohol planners.

These and other laws seem based on the belief that “for the bureaucrat, the world is a mere object to be manipulated by him.” The man who said that was Marx, a great believer in central control. These states have allowed a fixed bureaucracy to take hold of a market — a self-perpetuating and inefficient middleman in the market.

Unlike Marx’s vision, free enterprise is the touchstone of our society. With such free enterprise comes free choice — not simply the freedom to choose between the options approved by the government. Smith in The Wealth of Nations stressed that “it is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.”

Smith could just as well have added that it should also not be from the benevolence of the bureaucrat any more than the brewer — at least in deciding our drink of choice.

Turley starts the piece with a salvo at conservatives for giving a pass to state-run liquor stores, while seeing socialism just about everywhere else. That might be true in Utah, but in states considering reform right now, it’s generally Republicans who are trying to privatize state-controlled booze, and Democrats who are opposing them.

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46 Responses to “Ending State Liquor Monopolies”

  1. #1 |  tim | 

    In Minnesota – they leave how liquor stores are managed to the cities. I live within blocks of a city owned liquor store and a privately owned liquor store. The city owned store is dark, dreary, limited options, and smells like parties thrown by my parents in the 80s. While the privately owned store is open, cheery, and has tons of options. However – the owner of the privately owned store fights tooth and nail to maintain existing blue laws (no sales on Sunday, no liquor sales in grocery stores, etc) and other laws that may bring more competition and options to the consumer.

  2. #2 |  Boyd Durkin | 

    Seventeen states continue to exercise control over liquor as absurd relics from the 1930s.

    17 control the stores. I believe the whole country is forced to live with the distributor-middleman requirements.

  3. #3 |  Other Sean | 

    Tim,

    “The city owned store…smells like parties thrown by my parents in the 80s.”

    Let me guess: menthol cigarettes, Sterno, Aqua Net hairspray, Brut cologne, banana daiquiri mix, benzodiazepine sweats, and the fetid odor of late-40s despair?

  4. #4 |  C. S. P. Schofield | 

    While I agree that the government shouldn’t be in the business of selling vice (that applies double to lottery tickets), I feel obligated to say that I live in PA, and the PA sdtate liquor stores that I have been in have been well lit, cheerful places, with helpful staff. Certainly no worse than many of the loquor stores I frequented in Maryland or New Jersey when I lived in those states.

    I have run into dark, messy, state liquor stores with surley staff, but I don’t think it has been more often than I have run into similar conditions in free enterprise booze palaces. Some of the people who end up working in retail are simply unsuited to it.

  5. #5 |  dave b | 

    If you want a good idea of how the mind of the statist works, take a look at these videos of the Alabama legislature debating on whether to allow homebrew. These are people who do not plan on giving up government control of alcohol, since you obviously can’t control yourself without the helping hand of big brother. (Bonus – Alabama accents!!)

    http://www.youtube.com/watch?v=BVqnUf8NH6g

    http://www.youtube.com/watch?v=MZoTJzh13n8

    Say what you want about my home state of Louisiana, but we do have the best liquor laws in the country.

  6. #6 |  Phanatic | 

    The PLCB was instituted after prohibition, when the state legislature wanted to legalize alcohol but the government was a staunch prohibitionist. The crazy-quilt patchwork of laws here is a direct result of the horse-trading that went on to get it legalized at all, and in the words of the governor at the time, the whole point of the LCB was to “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.”

  7. #7 |  John | 

    @#2

    You’re correct. Hand-chosen distributors with territories that have been in the same family for generations with no competition.

  8. #8 |  V | 

    I will also say I’ve had good experiences in Virginia’s ABC stores. Well-stocked, good staff, convienent locations, and you can order other liquors through the website. Of course, at the time, I drank far less liquor than beer, and I will say, the beer stores in Alexandria were great.

  9. #9 |  Tom | 

    I by no means am making excuses for the state run liquor stores. But I have to say the Pennsylvania’s aren’t bad. They actually are nicer than some private liquor stores in states like Maryland and Delaware.
    And they are really much nicer than ABC stores in North Carolina and others.

  10. #10 |  Dave Krueger | 

    I always get a kick out of news items and commentaries that portray one party or the other as freedom (or free enterprise) lovers, courageously fighting the other party’s drive for government control.

    Neither party has any interest in freedom and any appearance to the contrary is easily explained in terms of loyalty to a particular special interest.

    Just like the media frames all issues as having only two perspectives (left/right, conservative/liberal, republican/democrat, etc), we have become accustomed to the idea that one side is good while the other is trying to fuck us over. Let me set the record straight. Both parties regularly fuck us over. Just because the neighborhood bully isn’t beating the shit out of someone at the moment doesn’t make him a good guy.

  11. #11 |  Jim Collins | 

    C. S. P. Schofield,

    I also live in Pennsylvania. Our State Store system needs to go. A few years ago I was on the board of officers at a club I belonged to. We ran out of a certain type of liquor and the State Store that our club was assigned to didn’t have it. By law, we were not allowed to go to another State Store that DID have it.

  12. #12 |  Joe | 

    Washington State just switched (privatized) and liquor prices went up 25% to 100% percent. Why? Hidden regulations and a tax increase just before the turn over. The change happened via voter referendum and the government has nothing but contempt for that.

  13. #13 |  Juice | 

    dave b,

    Second that. When I moved out of Louisiana, I was completely shocked at the way the rest of the country treats alcohol. Hell, I was legal when I turned 18. The Feds helped do away with that later. But yeah, I just took that stuff for granted. Like being able to go into a Wal Mart and buy a gallon of vodka and a shotgun. Or driving through a daiquiri shop. Or just walking around town with my daiquiri or a bottle of beer and no one cared. Just took it for granted.

  14. #14 |  Juice | 

    Tom,

    I don’t know what it is about Maryland, but pretty much everything in the state sucks. As far as alcohol goes, you can’t buy alcohol in grocery stores or convenience stores and they have shitty liquor stores with hardly any selection. Maybe there are some nice ones somewhere, but they’re few and far between. And they tax the shit out of it, of course. I refuse to order alcohol in a restaurant in Maryland anymore because they add an additional tax on top of the sales tax, so if you get a few beers it’ll cost you a few extra bucks to have those beers. God Maryland sucks. And natives get pissed when I say that. Dude, your state sucks.

  15. #15 |  Joe | 

    Maryland does suck. The crabs and oysters are fine. But I can go elsewhere for those too.

  16. #16 |  Barry | 

    Good timing. There are a few articles on philly.com today about the state stores. The gist is the folks who run them are corrupt. Yes, I’m shocked.

    http://www.philly.com/philly/columnists/monica_yant_kinney/20120620_Monica_Yant_Kinney__In_Pennsylvania__liquor_regulators_drunk_with_arrogance.html?cmpid=124488459

  17. #17 |  PG | 

    I find it amusing that Turley made it clear he can’t even be bothered to look at the Wikipedia entry for Das Kapital before using it as fodder for his article.

  18. #18 |  crazybob | 

    “Medallion owners fiercely resist any possible threat that may challenge their advantage.”

    Which is why we first have to start with campaign finance reform if we are going to fix any problems in the system. Public funding of campaigns is the only viable solution.
    Here is a solution: every US citizen gets 5 $20 vouchers each year that they can send to any candidate of their choice, at any level. This is the only money a candidate can spend. Unconstitutional? Probably, SO CHANGE THE CONSTITUTION before we end up in an oligarchy.

  19. #19 |  Charlie O | 

    Pennsylvania is ridiculous in the way it sells beer as well liquor. You can’t buy beer in a convenience or grocery store. You have to go to a beer distributor and then can only buy it by the case or keg. Sure you can get a six pack from a bar at ridiculously inflated prices, but then there is no selection. I like craft brews. I like to try different kinds of beer. But who the hell wants to buy a case of something you just want to try out. And those craft beers, forget about finding them at the bar that sells carryout. I most of my alcoholic beverages in Delaware or New Jersey. Delaware has fantastic liquor stores with great selection. I like craft bourbons as well. State stores don’t carry small batch stuff like that. They only carry what sells in large quantities. Ed Rendell made some progress in this backwater with opening beer and liquor sales on Sundays but the state needs to get out of the liquor business completely and c’mon, let me get a friggin’ six pack when I buy milk.

  20. #20 |  ric_in_or | 

    #12 > http://www.theagitator.com/2012/06/20/ending-state-liquor-monopolies/#comment-3417582

    On the plus side, the State of Oregon is reaping a huge benefit as WA residents jump the board for their liquor needs.

    Technically, the WA residents have to pay the WA taxes.

    You can ask Sherri about the tax across the boarder issue:
    http://www.oregonlive.com/business/index.ssf/2012/01/as_mattress_world_closes_its_d.html

  21. #21 |  KR | 

    The Virginia ABC stores are basically mediocre. They look nice and all, and I guess that’s important, but their selection is merely ok. Many times I have to ‘import’ bottles from DC, because if the store I go to doesn’t carry something, nowhere else in the state will either. Governor pushed for privatization earlier — I think one of Radley’s articles was about that — but no luck so far.

  22. #22 |  EH | 

    This is the way they want pot to go if legalized as well, I bet.

  23. #23 |  Graham Shevlin | 

    Any time the government stays involved to a ludicrous degree in the distribution and sale of alcohol, there is usually trouble…in the UK, where i used to live, the restrictive opening hours for pubs and bars due to licensing laws that were a carry-over from World War I has led to a culture where adolescents do not get to properly experience alcohol. This in turn leads to binge drinking and associated anti-social behavior. A barman in Amsterdam told me that the worst binge drinkers in Europe were the Swedes and the Brits (in Sweden alcohol consumption is even more restricted than in the UK). The difference was that when the Swedes got drunk, they were merely friendly and happy, whereas the Brits would try to smash the place (and anybody in it) to pieces, especially when told they could not have any more drink.

  24. #24 |  Pi Guy | 

    First, ssurprised to find so many MDers here!

    Second, had a buddy in south-central PA who used to ask me to bring, say, 5 cases of Guiness on the south side of the Mason-Dixon when I’d visit (this was before the recently-enacted 9% alcohol tax). It typically saved him ~$25 with me bringing to him.

    OTOH, that was actually a legitmate violation of the ICC as opposed to the herb I’d bring back.

  25. #25 |  CSD | 

    Graham, if your thesis is followed to its logical conclusion clearly at the Qatar World Cup the local drunks will truly be a menace. But that won’t happen the Brits will be bigger wankers (assuming they qualify) and it won’t have anything to do with liquor laws in the UK.

  26. #26 |  StrangeOne | 

    Charlie,

    In my mind that’s the only advantage the North Carolina system has. We have the ABC stores but beer can be sold just about anywhere. As a result we have a fairly decent number of micro-brewers in state and a huge variety can be purchased in major chain grocery stores.

    I don’t have too much against the ABC stores here, they tend to keep a decent variety and good stock. I would still prefer a private system. Of course even if the state run stores go away, the real uphill battle would be to get rid of the distributor mini-monopoly system. If that stayed a permanent fixture of the taxation and distribution system, a change from government run stores to private ones would be little more than cosmetic.

  27. #27 |  freedomfan | 

    Much of the discussion has focused on whether the state-run stores are as nice or bad as privately run stores, but that’s not really the point, IMO. The point is that there is no compelling reason to have state governments selling booze their citizens, so get them the hell out of it.

    BTW, I agree that Turley’s piece is unfortunately tainted by tribalism. Expanding on Dave Krueger’s analogy, the typical Democrat-versus-Republican or conservative-versus-liberal tribalism is well represented in a situation where there are two neighborhood bullies, one who claims he likes me and one who doesn’t. Both of them abuse me and others on a regular basis, but I kinda tolerate the former, as long as I avoid paying too much attention to what he does, and I don’t like the latter. Tribalism is lining up behind “my” bully when there is a conflict between the two of them, instead of recognizing that they are both assholes and feeling no need to defend either one. Or it’s being quick to criticize the “bad” bully for his thuggery and pretending it makes him worse than “my” bully, even though they are both thugs on a regular basis.

    In a given discussion, political tribalism values (typically unearned) allegiance to a political team over honest evaluation of the policy that team may support. The mentality is childish and harmful in politics. In sports, there is typically no moral, practical, or ideological reason to prefer one team over the other, so preferring my school’s team (or my home town’s team, or whatever) over the other is harmless. But, in the political realm, too much is at stake to ignore the impact of specific policies and to base one’s support support or rejection of them merely on which team supports or rejects them.

  28. #28 |  Krishan Bhattacharya | 

    Interesting piece, but Turley gets Marx totally wrong. Marx vision was that mass, international economic cooperation, crossing every racial, religious, and class difference, would reach a critical mass, and the state would disappear.

  29. #29 |  KPRyan | 

    Costco spent millions recently to have Washington State do away with state owned stores. Costco’s referendum won at the ballot box.

    Costco’s new law states that only large stores (based on Sq Feet) can sell liquor. So there are no small, independent sellers in Wash, only large corporations (with a few exceptions located where the population is very sparse). Costco hinted that prices would fall (a reasonable assumption for the voters). Now prices have actually risen for booze, Costco (and the other large grocers) have a new revenue stream retailers in Idaho, who were initially worried fewer Washingtonians would drive across the border for their purchases are doing more business than ever before.

  30. #30 |  StrangeOne | 

    @ KPRyan

    Yeah that was disappointing, we talked about it at length here when the legislation first came up. At first it seemed like a good idea until others pointed out the unreasonably restrictive clauses included in referendum.

    Just goes to show: Absence of government control =/= free market.
    We have to fight the protectionism too.

  31. #31 |  Jim Collins | 

    StrangeOne,
    Where do you see an absence of government control? They pass legislation that gets the Government out of the liquor business, but restrict that business to large corporations. Total absence of government control DOES equal free market.

  32. #32 |  Other Sean | 

    Krishna #28,

    Marx favored statelessness and economic cooperation in the same way that some rapists hope their victims will somehow turn into consenting partners.

    That is: he spent his life building an ideology that would empower the state and destroy economic cooperation in the only form in which it has ever existed, and in the midst of all that he says “of course later on everything will magically turn into its opposite, and the proletarian dictatorship will give way to utopia.”

    But just as the rapist has no right to expect violence to become consent, so did Marx have no right to promise or predict that.

  33. #33 |  Joe | 

    Costco spent millions recently to have Washington State do away with state owned stores. Costco’s referendum won at the ballot box.

    Costco’s new law states that only large stores (based on Sq Feet) can sell liquor. So there are no small, independent sellers in Wash, only large corporations (with a few exceptions located where the population is very sparse). Costco hinted that prices would fall (a reasonable assumption for the voters). Now prices have actually risen for booze, Costco (and the other large grocers) have a new revenue stream retailers in Idaho, who were initially worried fewer Washingtonians would drive across the border for their purchases are doing more business than ever before.

    Not that I trust Costco that much, but I believe there has been manipulation by the state authorities with the taxes. They went up significantly just before the transfer (the WSLCB said they needed the revenue). Before the change over there was a price per liter tax and the typical 8% sales tax. Now it is a price per liter tax and a 22% tax. And I think they are taxing along the chain of distribution which is increasing the taxes even more.

  34. #34 |  D. Mason | 

    No fan of monopoly or socialism I still must say that the local ABC stores are far and away the best places to get alcohol for me. More selection generally speaking than privately owned liquor stores, plenty clean, well lit and cheaper too. Yeah the staff is unfriendly (not rude just unfriendly) but with all other points in their favor I don’t care about that at all.

  35. #35 |  Blaze Miskulin | 

    This is just one more way that I’m reminded how the average person here in China actually has much more freedom that his counterpart in the US.

    The extent of liquor laws here are pretty much 1) don’t drive drunk and 2) don’t throw empty bottles at the cops (politely handing them full bottles is encouraged, however).

    From what I can tell from the pubs I frequent, to sell alcohol, you need a health certificate and a standard business license. There is no drinking age, there are no lock-out times for sales, there’s no “bar time”. It’s standard practice for a group of friends to go to a bar, order a case of beer, and have all of the bottles opened up and placed on the table (or in the special rack under the table). I can buy booze at the grocery store, at a restaurant, at a liquor store, at the newspaper stand, and at the fancy mall down the street (in the corner next to the children’s clothes and the Lego collections.

    I can walk down the street with a bottle of beer in my hand and nobody will care.

    A 20-oz bottle of Tsing Tao (blue-collar ox-piss) is 50¢ (3RMB). A 750ml bottle of Jack Daniels is about $25 (150RMB), a 700 of Jamieson’s is the same. Local hooch is dirt cheap until you get into the very high-end stuff.

    Oh… and–I kid you not–I’ve seen a store selling dry cleaning and cigarettes.

  36. #36 |  Charlie O | 

    #35 Blaze,

    My sister lives in Nanjing and says much the same thing. You are fortunate to live in a country not steeped in Puritanism and founded on faux christian ethics. Liquor laws in the US are all, without exception, based on cockamamie christianism. And thus, should all be declared unconstitutional and abolished.

  37. #37 |  tonylurker | 

    In Virginia, the biggest issue is money. The state pulls in a boat load of money from the ABC stores, and, in this economy the legislature is reluctant to give that up. The governor tried to get privatization through, but once everyone realized that it would result in a net loss of money to the state coffers, the effort fizzled. (The original plan was to make money off the sale of distribution licenses, but this would result in a short term increase in revenue for a year or two, followed by a steady loss in revenue in the following years)

  38. #38 |  Joe Bar | 

    I live in VA, too, and I buy booze and beer every time I drive through MD, krappy looking stores and all. The stuff I like is significantly cheaper there, and the VA beer distributors refuse to sell me Molson Golden!

  39. #39 |  JSL | 

    Bah, the WA price increases work out in the end. More folks in Vancouver etc. buy booze in Portland and folks from OR cross over to WA to buy sudafed without a prescription. Its still cheaper for me to drive up there myself for sudafed and I live 70 miles from the border.

    Supposedly the OLCC is loosening its rules here and there on who can sell what. I think my favorite politco gaff with the OLCC was when the director in ’06 resigned after getting a DUI.

  40. #40 |  James Hare | 

    I like how two examples (PA and VA) are used to make a blanket statement about the parties and their positions on this issue. There are blue states with private alcohol sales — the last two I’ve lived in are both private sale states (VT and MD).

    It’s especially interesting you bring up Virginia, considering McDonnell couldn’t pass the bill through either house, even the one Republicans controlled House. He obviously doesn’t care for data that doesn’t fit his theory, like this from the Washington Post article:
    “McDonnell hopes to blunt the criticisms of his plan from Democrats and some Republicans.”

    It would be easier to take Mr. Balko seriously as a non-partisan libertarian if he actually was one.

  41. #41 |  JSL | 

    Hmm, I could’ve sworn Mr. Balko wrote “generally” in his post.

  42. #42 |  James Hare | 

    JSL:
    Semantics are the last refuge of a scoundrel. The editorializing about which party to blame was unnecessary and not supported by the linked articles.

  43. #43 |  Other Sean | 

    James #42,

    If someone says “its generally republicans doing…”, that is NOT a semantic distinction. The word “generally” is being used in a common and transparent way, where both sides understand it to mean “often though not always”.

    For contrast, here’s what a semantic argument looks like:

    You just used the “semantics” to mean: “what happens when someone points out a word that is inconvenient to your point.”

    I counter that “semantics” actually means: “what happens when I point out that you have used the words ‘semantics’ incorrectly.”

    THAT is semantic argument, about the meaning of the word “semantics”.

  44. #44 |  Puzzling | 

    There is a new reply to this post by a guest blogger of Jonathan Turley:

    http://jonathanturley.org/2012/06/23/the-abcs-of-state-liquor-control/#more-50562

    We have previously discussed the socialistic nature of state liquor boards even in conservative states. Radley Balko takes exception to the “salvo” at conservatives and links to two states, Virginia and Pennsylvania, wherein he claims Republicans are trying to privatize their state’s liquor business, while Democrats oppose their efforts… In Pennsylvania, Republicans control both houses of the legislature and the governorship. In such a situation, not assigning responsibility to Republicans for the lack of even this minimum level of privatization, is unconscionable.

  45. #45 |  B | 

    Washington State’s privatization has been a lateral move at best so far. I retain some hope that it will get better, but I am far from convinced that it will.

    Fortunately, I mostly drink beer.

  46. #46 |  James Hare | 

    JSL: If such a policy is truly “generally” promoted by Republicans, why was it impossible for McDonnell to move the policy through the Republican-dominated Virginia House? If such a policy is “generally” opposed by Democrats, why do Democrat-dominated states like Maryland and Vermont have private alcohol sales?

    Maybe not everything should be seen through a “Democrats==Statists” “Republics==Lovers of Liberty” lens? There’s a great deal of liberty-hate on both sides. The main difference is Crazy Uncle Liberty calls himself a Republican while being shit on by their primary electorate. Maybe when his son gets the same treatment libertarians will wake up to the fact that the Republican party has no place for their ideology beyond laissez-faire for their cronies.

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