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Published: Thu, 20 Jul 2017 00:00:00 -0400

Last Build Date: Thu, 20 Jul 2017 13:53:53 -0400


Alabama Bans Margarita Pitchers, Declaring Them Adulterated

Wed, 12 Jul 2017 19:35:00 -0400

The Alabama Alcoholic Beverage Control Board (ABC) recently informed Will Haver, founder and CEO of the Taco Mama restaurant chain, that he was breaking the law by serving his customers pitchers of margaritas. That edict, which was accompanied by the threat of a fine up to $1,000 and up to six months in jail per pitcher, was based on a counterintuitive interpretation of a law that has been on the books for decades: It shall be unlawful...for any person to fortify, adulterate, contaminate, or in any manner change the character or purity of alcoholic beverages from that as originally marketed by the manufacturer, except that a retail licensee on order from a customer may mix a chaser or other ingredients necessary to prepare a cocktail or mixed drink for on-premises consumption. According to ABC General Counsel Bob Hill, mixing a single cocktail does not qualify as adulteration, but putting several in a pitcher does. The problem, as ABC spokesman Dean Argo explains it in an interview with R Street Institute Vice President Cameron Smith, is that the alcohol in a pitcher of mixed drinks tends to settle to the bottom. "The person who is poured the first or second drink may receive only a .25 to .5 ounce of alcohol," Argo tells Smith, "where a person receiving the third, fourth or even fifth pour may receive much more alcohol than mix." I'm no chemist, but that explanation seems dubious to me. If the ingredients in a margarita separated, wouldn't the alcohol migrate toward the top, since it is less dense than water or lime juice? Perhaps what Argo means is that the first and second servings of a frozen margarita tend to contain more ice, which would reduce the alcohol content. But if the margaritas are served on the rocks (the way most of them seem to be served at Taco Mama, where "frozen" is one of a dozen varieties), melting ice would tend to make later servings weaker. In any case, the ABC's reading of the law is outlandish, especially in light of the explicit statutory exception for mixed drinks. If six margaritas in separate glasses are not adulterated, pouring them into one vessel cannot make them so. The ban on adulteration is aimed at protecting consumers from being cheated or endangered by trickery behind the bar, not from getting exactly what they want, which for many Taco Mama customers is a pitcher of margaritas. Pressing Argo on the ABC's logic, Smith asks whether it would be legal for a bar to sell a pitcher of margarita mix alongside six shots of tequila. "I can't [see] anything that would prohibit that," Argo says. "The patron would [be] able to tell exactly the amount of alcohol he or she is getting and the server/bartender would be able to know when the patron becomes overserved." Smith is puzzled: "So the real danger is the alcohol settling in the pitcher, but that's only a problem if a bartender mixes it? If the patron does the exact same thing on the other side of the bar, then it's completely reasonable....You truly have to be overserved to buy that kind of nonsense." Trying to impress upon Smith the hazards of tolerating margaritas in pitchers, Argo trots out a parade of horribles. "If one licensee is allowed to serve mixed drinks in a pitcher," he says, "then other licensees would have to be allowed to serve mixed drinks." That could include not only margaritas, Argo warns, but even rum and Coke. Who would want to live in such a world?[...]

Brickbat: Poison Whiskey

Thu, 06 Jul 2017 04:00:00 -0400

(image) The Texas Alcoholic Beverage Commission charged Spec's Wines, Spirits and Finer Foods with a host of violations and asked that a Texas administrative court either fine the company $713 million or yank the license for each of its 164 stores. But the judges said the only charge that the commission proved was that Spec's might have paid an invoice a day or two late. The court issued Spec's only a warning. But the investigation cost Spec's more than $1 million in legal fees and other costs, and the three-year freeze the commission imposed on issuing Spec's new licenses until the case was resolved kept it from expanding.

Connecticut's Liquor Pricing Scheme Is a Bad Law That Just Won't Die

Tue, 27 Jun 2017 12:45:00 -0400

Shoppers in Connecticut pay the price of paternalism every time they frequent a local liquor store. Prices are 24 percent higher than in neighboring states or up to $8 more a bottle, thanks to a law that has its roots in prohibition. Unlike some other states that prevent liquor retailers from selling below a product's cost, Connecticut instead allows wholesalers and manufacturers to post a minimum per bottle and per case price. Once prices are posted to the Department of Consumer Protections, prices can be amended to match a competitior's before a price is finalized for the next month. Retailers then add their shipping and delivery costs to the per-bottle price and cannot sell below this cost. Wholesalers must sell at the same price to all retailers. Despite efforts from liquor giant Total Wine and Company and the free-market Democratic Governor Dannel Malloy, the pricing cartel continues. Most recently, Total Wine's antitrust lawsuit, which accuses the state of price-fixing, was dismissed by a federal judge earlier this month. Chief United States District Judge for the District of Connecticut Janet C. Hall decided that the complex state regulations do not violate federal antitrust laws. The archaic pricing system has made business rather cozy for the state's small liquor stores, which never have to worry about competitor's prices. For Total Wine, a chain with 138 stores in 18 states, this law prevents it from offering lower prices due to its comparative advantage. As summarized in their legal filing: "Under this anti-competitive regime, a retailer like Total Wine & More cannot use its market and business efficiencies to reduce the prices offered to consumers." Total Wine has previously been called a "gorilla" and accused of being "diabolical" and "predatory" for trying to save consumers money. The state's 1,150 small package stores have consistently lobbied against changing the pricing scheme. Total Wine attracted attention to their suit with full page newspaper ads, promising to sell liquor below the state minimum. Another company, BevMax, joined in on the protest and lawsuit. Total Wine paid $37,500 in fines as a result. The stores also posted signs requesting customers call their legislators when the state required prices be raised. Company spokesman Ed Cooper called it an act of "civil disobedience." The state legislature responded with two bills to increase penalties for violating minimum bottle price or false advertising. The legislature has been notoriously defensive of the minimum pricing scheme and repeatedly blocked Gov. Malloy from tossing the law out. Here's more on Gov. Malloy's efforts by Reason's Jacob Sullum. This is now the fifth year in a row in which the governor has proposed overturning the pricing scheme and adopting a system similar to other states in which products can be sold for the price paid. Most likely, the legislature will again strike down his proposal. According to Malloy, in any other industry, an anti-competitive law would be tossed out immediately: "If we had a law that forced stores to sell bread for a price that was determined by state government, people would be screaming about capitalism and big government. But for some reason, we allow this anti-free market mandate to continue for this one particular industry." Proponents of the law, such as Lawrence Cafero a former House minority leader and executive director and general counsel of the Wine and Spirits Wholesalers of Connecticut, said in testimony that "this change in our decades old law will be devastating to most local family owned Connecticut package stores." Malloy has stated that doing away with the regulation would increase state tax revenue by $5 million due to increased liquor sales, while supporters of the policy believe it would decrease tax revenue as the sales tax would be collected on a cheaper item. Since liquor stores in Massachusetts have targeted Connecticut shoppers with "drive for savings" advertisements, Malloy's estimate of increased in-state spending sh[...]

Are Terrible State Alcohol Laws on the Way Out?

Sat, 24 Jun 2017 08:00:00 -0400

Alcohol regulations in this country could improve dramatically if more state courts would reject bald economic protectionism as a valid basis for lawmaking. That's the conclusion of a new study published last week by the R Street Institute, a free-market think tank in Washington, D.C. The new study, Could Economic Liberty Litigation 'Free the Booze'?, uses the hook of a recent South Carolina court case to suggest—hopefully—that we may be seeing the dawn of a new period of much-needed state alcohol deregulation. The lawsuit in question concerned section 61-6-140 of South Carolina's Alcohol Beverage Control Act, which stated that "[n]o more than three retail dealer licenses may be issued to one licensee[.]" The case involved national alcohol beverage superstore Total Wine, which owns three locations in South Carolina but was rebuffed by the state in its efforts to open a fourth. Total Wine sued to overturn the South Carolina law. The state, the court found, "offer[ed] economic protectionism as the sole justification of this extreme business regulation." The court determined the state's "only justification for these provisions is that they support small businesses." Thankfully, the court was unwilling to accept that justification. "The record does not contain any evidence of the alleged safety concerns incumbent in regulating liquor sales in this way," the court ruled. "Without any other supportable police power justification present, economic protectionism for a certain class of retailers is not a constitutionally sound basis for regulating liquor sales." The court rightly concluded that "'it's just liquor'... is not a legitimate basis for regulation." While it may seem trite for a court to conclude this, the truth is that in the seven-dozen years since the end of alcohol Prohibition in this country, courts have held time and again that the mere fact a law regulates liquor has indeed been a sufficient basis for that regulation. But that view began to change after the U.S. Supreme Court ruled in a 2005 case that Michigan, New York, and other states cannot discriminate against out-of-state alcohol sellers. (Alas, I discussed "a new Michigan law that bars out-of-state retailers from shipping wine into the state" earlier this year.) More recently, in 2014, a federal court overturned Florida's inane ban on 64-ounce beer growlers. The message: federal courts have acknowledged that "it's just liquor" may no longer be a sufficient constitutional basis for lawmaking. But state courts have been mostly loath to overturn alcohol laws within their borders, choosing instead to defer to state lawmakers for whom cronyism and protectionism are legitimate bases for lawmaking. "From Virginia's food-beverage ratio law, which arbitrarily mandates how much booze versus food a restaurant can sell, to Indiana's cold beer law, which only allows liquor stores (but not gas stations or grocery stores) to sell refrigerated beer, the examples are legion," the R Street report notes. That's why the South Carolina decision is such a big deal. "Nearly every state in the country has oppressive alcohol laws that could be ripe for judicial review, and using a litigation-based model allows reformers to circumvent cronyist state legislatures that are often bent on protecting the status quo," said study author Jarrett Dieterle, a fellow at the R Street Institute and editor of, in an email to me last week. "If this model of targeting irrational alcohol regulations through economic liberty litigation takes hold in other states, it could upend the booze world as we know it," Dieterle tells me. "The examples of protectionist alcohol laws across the country are legion and this could be one method of clearing away the antiquated post-Prohibition legal structure that the alcohol industry still labors under." Dieterle kindly quotes me in the piece for the proposition that the Twenty-First Amendment, which ended alcohol Prohibition, is largely rubbish. The Twenty-First [...]

Florida Gov. Rick Scott Won't Let You Buy Booze in Grocery Stores

Fri, 26 May 2017 16:44:00 -0400

Florida Gov. Rick Scott vetoed a bill that would have allowed grocery stores, gas stations, and other retailers to sell liquor alongside the beer and wine they already offer. The proposal to tear down Florida's so-called "liquor wall" had cleared the state legislature despite opposition from groups that benefit from the mandatory separation of liquor sales, including the liquor stores themselves and a major grocery chain that runs a series of independent liquor stores. The Miami Herald reports that the "winners" from Scott's veto include independent liquor-store owners, ABC Fine Wine & Spirits and Publix Super Markets," all of which opposed the bill as it was making its way through the state legislature. Rory Eggers, president of the Florida Independent Spirits Association, which represents the privately-owned, spirits-only retailers across the state, said in a statement that the group delivered more than 3,000 petitions to Scott urging him to veto the bill. Like a good Republican, Scott claimed the veto was about looking out for the best interests of the business community in Florida—even though the businesses in question only exist because of a protectionist scheme that's been maintained by the state government since the end of Prohibition. "I have heard concerns as to how this bill could affect many small businesses across Florida," Scott wrote in his veto message. "I was a small business owner and many locally owned businesses have told me how this bill will impact their families and their ability to create jobs." Scott's logic doesn't make much sense, though. By his reasoning, Florida should mandate that each and every product sold in grocery stores or Wal-Marts have to be sold by a separate retailer. There should be one store for vegetables, another store for paper goods, a separate one for dairy products, and so on. Imagine how many small businesses that would create! That's nonsense, of course, just like the governor's argument for maintaining Florida's protectionism for liquor stores. Scott can dress it up however he wants, but this veto is very much an anti-consumer move. Retailers that want to make shopping more convenient should be allowed to do that. The claim that he's protecting small businesses is similarly questionable. Under the current law, large grocery stores like Publix benefit from being able to house separate liquor stores within their footprint, while smaller grocery stores that can't afford to do that are not allowed to sell liquor. Most of all, though, this is about maintaining a special government-granted privilege that benefits some businesses at the expense of others. It's another illustration of the relationship between government and booze that I highlighted earlier this month in a feature about the latest efforts to reform Pennsylvania's liquor laws. The only difference is that, in Pennsylvania, the liquor stores are government-run entities and the employees are government workers (and public sector union members), so it's Democrats who typically argue against doing away with the stand-alone liquor stores. When they do, they use pretty much the same reasoning that Scott employed this week in Florida, claiming that allowing other retailers to sell liquor would hurt the workers whose jobs only exist because of government edict. In Florida, the liquor stores are privately run (which is better, I'll grant), so it's Republicans like Scott defending them as small businesses in need of government protection.[...]

Raging Bitch, Good Shit, and Flying Dog Beer's Fight for Free Speech

Wed, 10 May 2017 15:54:00 -0400

"I've lived my life as a pro free enterprise person," explains Flying Dog Brewery CEO Jim Caruso. "Not pro business. Pro free enterprise, pro consumer choice, artisanal manufacturing." A central player in America's craft beer revolution, Caruso is dedicated to creating something special both inside and outside the bottle. Famed artist Ralph Steadman, best known for his iconic illustrations for work by Hunter S. Thompson, creates all of Flying Dog's labels. It was Steadman who spontaneously wrote on his first commissioned label "good beer, no shit." And it was this label that kicked of Flying Dog's first -- but not last -- fight with government censors. Caruso sat down with Reason's Nick Gillespie to talk about his run-ins with the state, why he is a libertarian, and the how his values keep him happy. "I'm a happy person. And I attribute that to living as an individual, taking self responsibility, self reliance, but connected to society. It's not a Lone Ranger sort of thing." Cameras by Meredith Bragg, Todd Krainin, and Mark McDaniel. Edited by Bragg. Subscribe to our YouTube channel. Like us on Facebook. Follow us on Twitter. Subscribe to our podcast at iTunes. This is a rush transcript—check all quotes against the audio for accuracy. Nick Gillespie: America is in the throes of a beer revolution. Today the United States has more breweries than colleges. But it wasn't always this way. It was only after Jimmy Carter rescinded the prohibition on home brewing that Americans began innovating and experimenting. Flying Dog Brewery CEO Jim Caruso was there during the early days. And while today Flying Dog has cemented it's place as a leader in the craft brewery movement - as well as an unlikely champion of first amendment rights - Caruso still remembers the challenges of being a pioneer. Jim Caruso: Nobody knew anything. There was nobody to turn to. So, bottles of beer exploding, we're selling out of the trunk of our car. All that sort of stuff in the start up industry. It wasn't taken very seriously. And today for example we have Flying Dog University, we want people to make good beer. We've made it through 27 years, we're happy to share that knowledge. Even today breweries are opening faster, the capacity is increasing faster than demand, people are really getting into it. The last two years, three breweries opened per day for the last two years, every day for the last two years. Nick Gillespie: Wow. Jim Caruso: More breweries opened in the last 90 days than existed in 1990. Nick Gillespie: And it's not just beer, I mean there's been an explosion in food and when you think about supermarkets like Whole Foods has really kind of changed the way people think about food or what the possibilities are. In all sorts of fields you see this, the rise of the artisanal of individualized, of niche products. What's driving that in your estimation? Jim Caruso: Yeah, s everal aspects of that. One is, certainly the artisanal nature, it's higher cost, it's lower production, it's scaling demand, not scaling supply. We're not pushing into the market, we're responding to consumer demands and offering this interesting portfolio of design and clothing and getting close to it. When you look at local, think global, buy local, what does that mean? It means different things to different people. One is hyper-connectivity. It's not just that we contribute to the local events, we are engaged on that market at many, many different levels. And that's important to know the people behind the business. To be able to believe in that business. The other is a quality aspect. There is a freshness aspect to it because you can offer a wider range of products without worrying that they're aging on the shelf more than I'd want it to. Jim Caruso: Caruso and the Flying Dog team are still dedicated to creating something special both inside and outside the bottle. Famed artist Ralph Steadman, best known for his iconic illustrations for[...]

In Pennsylvania, Prohibition Is Finally Losing Its Grip

Wed, 03 May 2017 08:30:00 -0400

For decades, Pennsylvania has had some of the strangest rules about where, and how, you could buy alcohol. I knew them well. Having grown up in Pennsylvania and returned there for a few years after college, I got used to explaining those rules—"I know, I know, it's crazy, but we have to stop here to get the beer, and then we have to drive across town to get the whiskey"—to out-of-staters who would come to visit. Every state has weird rules about liquor, but everyone could agree that Pennsylvania's were the worst. Beer was only available from distributors and you couldn't get anything smaller than a full case (24 bottles or cans), unless you went to a bar that had a license to sell six-packs to-go and paid a hefty premium for the convenience. Wine and spirits were only available from one of the 600 or so state-owned-and-operated liquor stores. In rural parts of the state, that could mean driving half an hour or more out of the way, since the state stores are clustered in cities and suburbs. That's changing. In fact, the changes have come so quickly that someone who moved out of the state as recently as 2013—as I did—can be stunned when returning home to visit friends and family. Now, I'm the confused out-of-stater who needs an explanation about where you can go to buy which products. Many of the state's rules were legacies of Prohibition. But they began changing in the early 2010s, when a few large grocery stores began exploiting a loophole in state law that let them operate with a restaurant license and sell six-packs of beer. Unsurprisingly, the idea proved popular. Even as political efforts at broader booze reforms went nowhere in Harrisburg, the state capital, it became gradually easier to buy smaller quantities of beer. Other changes in the past few years made it legal for beer distributors to sell 12-packs, then six-packs. After a major political compromise in 2016, it's now possible to buy beer and wine at grocery stores. A limited number of large convenience stores attached to gas stations can also sell beer to-go, after a longstanding prohibition on selling booze and gasoline at the same spot was lifted last year. For all the changes, there are still two big, related problems. First, liberalized rules for the purchasing of wine and beer are good, but the changes have ignored hard liquor, which accounts for 53 percent of all sales in Pennsylvania's "Fine Wine and Good Spirits" shops. For whiskey, tequila, rum, and so on, the only option is taking a trip to a state-controlled liquor store and paying the state-determined price. The second problem is that it's still impossible to buy all types of alcohol in a single location, because the state-run liquor stores can sell wine and spirits, but not beer, while beer distributors and grocery stores can sell suds and vino, but none of the hard stuff. Special interests on both sides of the aisle—primarily the public-sector unions representing state liquor-store employees on the left, and on the right, the beer-selling businesses unwilling to give up their special privileges and anticompetitive markets—helped keep Pennsylvania's awkward, anachronistic system in place for decades. But they've seen their influence wane, ever so slightly, in the past few years. A shifting political climate and an out-of-state grocery store chain fractured the delicate balance, and a Republican speaker of the state House and Democratic governor have done their part to liberalize the state's alcohol regulations. Finally, Pennsylvania might be on the brink of recovering from an 83-year hangover. -- When Prohibition was shoveled into the ashbin of history in 1933, Pennsylvania Gov. Gifford Pinchot was not a fan. An outspoken teetotaler and progressive Republican who thought liquor contributed to political corruption, Pinchot believed that "Prohibition at its worst has been better than booze at its best," and he wasn't afraid[...]

Brickbat: Beer Run

Mon, 03 Apr 2017 04:00:00 -0400

(image) Under Indiana law, convenience stores may not sell cold beer, only beer that has not been refrigerated. It's the law. But the Ricker's chain figured out a way around that law. Since it sells Mexican food in its stores it applied for restaurant licenses, which allow it to sell cold beer. Leaders in the state legislature have vowed to change the law to stop Ricker's from selling cold beer.

Maryland Has a Bad Beer Bill on Tap

Wed, 22 Mar 2017 13:45:00 -0400

(image) First the good news: The Maryland House of Delegates just passed a bill that would quadruple the amount of beer that breweries are permitted to sell in their taproom. Now the bad news: Those brewers will have to try to squeeze those sales into less time, because the bill would also require them to stop serving by 9 on weeknights and by 10 on Fridays and Saturdays. (Depending on where they're located, they're currently allowed to stay open til either midnight or 2 a.m.) The bill also bans the brewers' taprooms from selling other companies' products.

In other words, the law takes away a lot more than it allows. The aim of all this, apparently, is to protect traditional bars and liquor stores from competition.

This had been one of three rival beer bills in the legislature. The best one would have loosened the restrictions on how much beer the brewers could serve without adding those new controls. The other measure was a cronyist proposal that essentially would have carved out a special privilege for a Guinness brewery coming soon to Baltimore County, upping the amount it could serve in its taproom without offering a comparable increase elsewhere. (Speaking as a local: I'm all for bringing more Guinness to the area, but I'd like the rest of the state's beermakers to have the same rights.) Guinness had actually endorsed the more sensible legislation, but it had this one ready too, just in case. Beer writer Liz Murphy called it the "cover your ass bill."

The legislation will now go to the Maryland Senate, where hopefully it will die. If these new rules do become law, Guinness will be able to handle them, but they'll kneecap a lot of smaller businesses. It'd be a double tragedy: a bill so bad that it drives you to drink, but which also takes drinks off the table.

Brickbat: Too Soon?

Thu, 16 Mar 2017 04:00:00 -0400

(image) After Minnesota Gov. Mark Dayton signed into law a bill that legalized Sunday liquor sales, liquor-store owner Jim Surdyk emailed customers to say he'd be open on Sunday. OK, the law doesn't take effect until July 2, but Surdyk figured if the legislature and the governor are all in favor of Sunday sales, why wait. An official with the state licensing agency felt differently. He hit Surdyk with several citations that could bring an estimated $3,500 in fines for selling on Sunday.

Brickbat: Poison Whiskey

Wed, 15 Mar 2017 04:00:00 -0400

(image) The Utah legislature has approved a bill that would lower the blood alcohol content level for DUI to 0.05 from 0.08. Gov. Gary Herbert says he will sign the bill into law.

Another Blow Against the Petty Tyranny of Blue Laws

Wed, 15 Mar 2017 00:01:00 -0400

I am in Austin this week for the South by Southwest conferences, and I had planned to pick up some whiskey this Sunday before flying back home to Jerusalem, where brown spirits cost much more. Then a friend pointed out that my plan was not feasible in Texas, which is one of 11 states that still prohibit liquor sales on Sunday. Until recently there were 12 such states, but last week Minnesota Gov. Mark Dayton signed a bill allowing liquor stores to operate on Sundays. He thereby eliminated an arbitrary inconvenience that over the years has been justified in the name of piety, paternalism, and protectionism, none of which is a morally acceptable reason to use force against peaceful people. Minnesota's new law, which follows similar moves by 16 other states since 2002, takes effect on July 1. But Jim Surdyk, proprietor of Surdyk's Liquor & Cheese Shop in Minneapolis, did not wait to exercise his new freedom. He was open for business last Sunday, prompting a $3,500 fine and threats against his license. It is not hard to understand Surdyk's impatience. In the 159 years since Minnesota became the 32nd state, it has never deigned to let people buy packaged beer, wine, or liquor on Sunday. Minnesotans who wanted to have drinks at home on the Christian Sabbath had to plan ahead or make a run to neighboring Wisconsin, which has allowed Sunday sales since 1874. You might wonder whether it is constitutional to foist a religious day of rest on people who choose not to observe it. According to the Supreme Court, it is. The Court's reasoning highlights the petty tyranny of blue laws. In the 1961 case McGowan v. Maryland, seven department store employees challenged their criminal convictions for daring to sell people "a loose-leaf binder, a can of floor wax, a stapler, staples and a toy" on a Sunday. The Court rejected their argument that Maryland's blue law violated the First Amendment's ban on "an establishment of religion." "There is no dispute that the original laws which dealt with Sunday labor were motivated by religious forces," Chief Justice Earl Warren wrote in the majority opinion. But he added that "as presently written and administered, most of them, at least, are of a secular rather than of a religious character." Warren's secularization of Maryland's blue law was a bit of a stretch, given that the statute explicitly addressed "Sabbath Breaking" and repeatedly referred to the "Lord's day," demanding that people not "profane" it through inappropriate activities. But the chief justice argued that the state had a legitimate interest in promoting "the health, safety, recreation and general well-being" of its residents by mandating not only "a periodic respite from work" but "a general cessation of activity, a special atmosphere of tranquility, a day which all members of the family or friends and relatives might spend together." More recently this pious paternalism has given way to a nakedly protectionist argument. The main opponents of Sunday sales nowadays are independent liquor stores whose owners worry that competition will force them to work harder without guaranteeing a commensurate increase in revenue. "Small-business owners argued that allowing Sunday sales would stretch six days of purchases over seven days and increase their operating costs," the St. Paul Pioneer Press reports. "They also worried it would bring more chain and big-box stores," which "can undercut smaller stores on pricing." The point of banning Sunday sales, in other words, is not to protect consumers from themselves but to protect merchants from their competitors. High-handed promotion of "the general well-being" has been replaced by an open conspiracy against consumers. Jim Surdyk, the Minneapolis liquor retailer who dismayed city and state officials by se[...]

Makers of Blue Wine Thwarted by EU Regulations

Mon, 06 Mar 2017 12:15:00 -0500

(image) A group of young entrepreneurs from the Basque region of Spain who launched a new kind of blue wine in 2015 is now facing resistance from national and supranational bureaucrats. An anonymous complaint that the Spanish Wine Federation, which represents three-fourths of the country's wine producers, insists it did not file yielded a fine from Spain's agriculture ministry for violating wine regulations. The company that produces the blue wine, Gïk, has relabeled its product and added 1 percent grape must to avoid being considered a "pure wine."

"Under the European Union's oenological regulations," The New York Times explains, "whatever is not specifically authorized is considered illegal—and blue is not an approved color." Gïk has sold more than 120,000 bottles, with half being sold outside the EU, according to The Times. The young entrepreneurs who created the company had no background in winemaking, so they recruited a team of chemical engineers from University of Basque Country to develop the blue wine, which uses red and white grapes as well as a chemical from red grape skin and an organic food dye, indigotine, to achieve the blue color.

Taig Mac Carthy, one of the co-founders of Gïk, explained to The Times that they wanted to create something "more fun" for people who didn't particularly like "normal" wine. "The trouble is that we are trying to revolutionize an industry that has worked for centuries without making any change," Mac Carthy said, "and they control the rules of the game." The Spanish Wine Federation sees it differently. Their general-director told The Times that while they appreciated Gïk's initiative, "you have to respect the rules of the game, and they are for everybody."

"In Spain, wine is very linked to culture," Aritz López, another co-creator, told BBC last year. "It hasn't changed for centuries. This is a country that prefers tradition instead of innovation. But Gïk is trying to change that. We are for normal people that don't need to know thousands of rules in order to enjoy a glass."

Detailed rules on winemaking, however, are part of the EU's Common Agricultural Policy (CAP). Two-thirds of wine production worldwide occurs in EU countries, which are required to enforce laws in line with the CAP. Attempts by governments to control the rules of what constitutes what kind of alcohol aren't new, and in the case of the EU illustrate how the concept of the free movement of goods has been burdened by layer after layer of unnecessary regulation. If the Spanish Wine Federation, or any voluntary national (or even international association) would like to define wine or any other alcohol for their members, that's part and parcel of free, voluntary markets. Such rules should not be forced by government, and certainly should not be conflated with or made a condition for free trade and movement—consumers should have the freedom to decide for themselves.

Don't Look Now, But Michigan's Restricting Wine Shipments Again

Sat, 25 Feb 2017 08:00:00 -0500

Last month, an Indiana wine retailer and a handful of consumers in Michigan filed suit in federal court to challenge a new Michigan law that bars out-of-state retailers from shipping wine into the state. The Michigan law, passed last month, lets retailers inside the state buy a "specially designated merchant license" that will allow them to ship wines to in-state consumers. The benefits of the law, which takes effect next month, is that it'll "make it easier for wineries and in-state retailers to ship to Michigan consumers," reports Wine Spectator. But the law prohibits out-of-state retailers from buying permits. If you just read that and looked up at the date stamp on this column because you thought this might be a reprint of some classic article from 2005, you'd be forgiven. Wasn't Granholm v. Heald, decided by the U.S. Supreme Court a dozen years ago, a case about a Michigan law that barred out-of-state wineries from shipping wine into the state? And didn't the Supreme Court rule that Michigan's law was unconstitutional? Yes and yes. And yet here we are. Indeed, the new Michigan law and lawsuit raise startlingly similar dormant Commerce Clause and Twenty-First Amendment questions that many assume were settled by the U.S. Supreme Court in Granholm. Three years after Granholm, a federal court ruled against Michigan in another wine-shipment case that was even more on-point. Just what the hell is Michigan doing? The Michigan law at issue in Granholm permitted Michigan wineries to ship their products directly to consumers in the state but prohibited out-of-state wineries from doing the exact same thing. The Court held in that case that the Michigan law "discriminate[s] against interstate commerce in violation of the Commerce Clause [and] is neither authorized nor permitted by the Twenty-first Amendment." One key question that arose in the wake of Granholm was whether "states will remove the discriminatory legal impediments to interstate wine shipping." Most states have, according to the National Law Review, which notes that "nearly every state now allows wineries to ship wine directly to in-state consumers." Retailers—wine superstores and others—are now bumping up against the Michigan law. Notably, Granholm pitted what I think is the Constitution's most overrated amendment—the Twenty-First—against perhaps its most important unwritten rule, the so-called dormant Commerce Clause. Thankfully for wineries and consumers, the latter won. But what's so lousy about the Twenty-First Amendment? After all, didn't it end Prohibition? Hardly. Instead, it simply shifted much of the power to prohibit and incessantly regulate alcohol from the federal government to the states. The Twenty-First Amendment—particularly the language in its second section, and the way lawmakers and courts have interpreted that language—is why we have things like dry counties, happy hour bans, and a mandatory three-tier system in forty-nine of fifty states. While in one sense Granholm reined in state power under the Twenty-First Amendment, in another it also demonstrated the awesomeness of that power. In its ruling in the case, the Supreme Court made clear that states could still use their breathtaking powers to regulate alcohol under the Twenty-First Amendment to ban all shipments of wine. Period. The Court simply held they couldn't favor in-state producers over out-of-state producers if they did so. The Twenty-First Amendment sucks. Michigan is hardly alone in having crappy Twenty-First Amendment inspired alcohol-distribution laws in place. Pennsylvania law forces anyone driving through the state with so much as a can of beer in their car and who might want to stop off in the state for a spell to, sa[...]

Your Government at Work: Trying to Prosecute Restaurateur for Tweeting Photo of Underage Kids Who Tried to Buy Beer [UPDATE: Acquittal!]

Tue, 07 Feb 2017 22:10:00 -0500

John Horvatinovich is on trial this week because he tweeted out a photo of a couple of 17 -year-old kids who tried to buy alcohol at his Omaha, Nebraska, restaurant, Salt 88.


He's facing a misdemeanor charge of interfering with a government operation. [UPDATE: And today, February 8, he was fortunately acquitted by a jury.]

Why? Because the kids were sent there by the Nebraska State Patrol as part of an attempted sting to entice him to illegally sell them alcohol.

His resistance to selling Bud Lights to the kids, who presented their real underage I.Ds and were turned away, indicates his intent to sternly obey the law. Yet that act turned into what the state considers lawbreaking when he thought he'd do a solid for the community by exposing the would-be lawbreakers.

He tweeted out a photo showing the face of the two teens from his restaurant surveillance camera on August 13 of last year, according to a report from the Omaha News-Herald, with these words: "Omaha restaurant peeps: These two are trying to ruin your night w/sting operations in town." (The tweet has since been deleted.)

Despite using the word "sting" in his tweet, Horvatinovich told local TV station WOWT News 6 that "We were presented with two minors trying to buy alcohol at our restaurant. Had I known they were minors working with authorities in a compliance check, I would have deleted it immediately. But we didn't find that until 12-days after the tweet."

According to the News-Herald, "Assistant City Prosecutor Makayla Maclin said in her opening statement [in his trial] Monday that...'(The teens) couldn't perform any more compliance checks as a result of the tweet.'"

Their police handlers feared with them being identifiable on the internet that future use of those same teens in bars could result in possible violence against them.

Horvatinovich's maximum possible sentence for posting a picture of people who tried to break the law in his restaurant is a year in jail and a $1,000 fine. The trial was ongoing as of today. [UPDATE: As noted above, today February 8 he was acquitted.]