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Published: Thu, 19 Oct 2017 00:00:00 -0400

Last Build Date: Thu, 19 Oct 2017 21:24:05 -0400


Pennsylvania Wants to Get Drunk on Debt

Thu, 12 Oct 2017 10:15:00 -0400

A decade ago, state lawmakers in Pennsylvania faced a budget deficit and political pressure to privatize the Pennsylvania Turnpike, which was then run as a quasi-independent state agency. Selling the nation's oldest toll highway to a private operator would have netted billions for the state, but lawmakers and then-Gov. Ed Rendell thought they had a better idea. They sold bonds backed by future toll revenues—a process known in investment lingo as "securitizing"—and turned the Pennsylvania Turnpike into an off-the-books source of borrowing that would, in theory, provide a steady stream of revenue for 50 years. It didn't work out that way. Turnpike tolls climbed every year to meet the new debt obligations since Act 44 passed in 2007. A drive from Philadelphia to Pittsburgh today costs more than double what it did a decade ago. After state audits showed future toll increases would be unsustainable, lawmakers in 2013 had the turnpike subsumed into the state Department of Transportation. Even with that minor fix, Act 44 has become a case study—see this report from the University of Pennsylvania published last year—in what not to do when states take on debt. Lawmakers in Pennsylvania, however, are preparing to make nearly the same mistake. Facing a $1.2 billion budget deficit and political pressure to privatize Pennsylvania's state-run liquor system, Gov. Tom Wolf wants to securitize future liquor sales to eliminate the debt. Borrowing, Wolf said last week, would "pay off nearly all of our prior year deficit and significantly reduce the need for additional temporary borrowing to pay our bills." The analogy with the turnpike isn't a perfect one. Motorists have options other than toll roads when they want to drive across the state. The Pennsylvania Liquor Control Board is a monopoly on liquor store operators and wine and spirits wholesalers that kicked in $210 million to state coffers last year. But like the Turnpike deal, borrowing risks long-term problems if the Pennsylvania Liquor Control Board can't meet its debt obligations. And issuing bonds would also further entrench state-run liquor stores, an outdated system most states abandoned long ago. The state faces a budget crisis because lawmakers in June delivered a $32 billion spending plan to the governor but have failed to pass a bill specifying how the budget will be funded. Wolf is asking for new taxes on gas drillers and hotels to close the budget gap. "There are definitely questions," House GOP spokesman Steve Miskin told WITF's Katie Meyer this week. "The main concern is, is it legal, and can he unilaterally do it?" The better question is whether or not he should. Wolf's borrowing plan correctly points out the amount the Liquor Control Board contributes to the budget each year is less than what would be required to make annual payments on the $1.2 billion in borrowing. Wolf's top budget adviser told PennLive's Charlie Thompson that the annual debt service would amount to about $85 million. True, but shortsighted. Funds siphoned off to pay for new debt service will not be available for future state budgets. And a new paper published Thursday by Jarrett Dieterle, a fellow at the R Street Institute in Washington, D.C., questions whether state-run liquor operations charging what amounts to secret taxes in the form of price mark-ups on alcohol are illegal. The PLCB used to apply a 30 percent mark-up on the wholesale price of liquor, but recently switched to a variable markup that fluctuates from product to product. Either way, that added fee is "a tax in everything but name," says Dieterle. The mark-up system lacks accountability, because taxpayers can't remove PLCB board members at the ballot box. A lawsuit built on Dieterle's premise could undermine the state's ability to continue collecting this unseen tax. "This setup ultimately allows state officials to hide the bill from taxpayers and to rely on what amounts to backdoor taxes to plug budget gaps, all while avoiding politically contentious policy decisions," Dieterle says. Borrowing against the liquor system als[...]

Puerto Rico Responds to Disaster Stupidly by Banning Alcohol Sales

Sat, 30 Sep 2017 07:49:00 -0400

Puerto Rico is suffering on a massive scale in the wake of Hurricane Maria earlier this month. Eighty percent of the nation's food crops were destroyed by the storm. Losses on the island total in the tens of billions of dollars. Aid has reached the country, but not yet those in need. Some 10,000 shipping containers filled with food, water, and other supplies are sitting at the country's main port due to a combination of damaged roads, fuel shortages, and the absence of many truck drivers. There has been some good news amidst the bad. Many companies have donated to hurricane relief efforts in Puerto Rico. And the Trump administration temporarily waived the Jones Act, a dumb 1920 law that restricts which boats may ship to the island. I love Puerto Rico. My girlfriend and I spent a couple weeks in the country to celebrate our 20th anniversary in 2013. We began and ended our journey in San Juan, visiting cities and towns all around the island in between by car. Our trip was almost perfect. Except for the plodding, mean motorcycle gang that went to great lengths to make sure I couldn't pass them on the highway, the people were uniformly great. Except for being bitten by a random fish, the beaches and water were wonderful. And except for the mofongo—I typically love plantains, but I don't get mofongo one bit—the food was amazing. I ate what might be the world's best roast pork at a little roadside joint outside of Luquillo. What I may remember most about Puerto Rico is that there are so many great bars across the island to sit down and chat with the locals. My favorite bar on the island, without a doubt, was La Taberna Lúpulo in Old San Juan, a friendly, breezy, 50-tap space in an old colonial building that bills itself as Puerto Rico's premier craft beer bar (though they also have a great selection of rum). I've followed La Taberna Lúpulo on Facebook since. I noted their preparations for Hurricane Irma, and was happy to see—save for a power outage and a downed tree or two outside—that they'd made it through that hurricane relatively unscathed. Like the rest of Puerto Rico, though, La Taberna Lúpulo is struggling to get by after the island was slammed by Hurricane Maria. The bar has no water or electricity. But that's just the half of it. The bar also has had no way to make money, thanks to a curfew and to a bizarre decision by Ricardo Rosselló, Puerto Rico's governor, to prohibit most alcohol sales on the island. Indefinitely. "We tried to open in a limited capacity but between the curfew, the dry law and the inability to get fuel, we found it hard to staff the bar and impossible to justify being open as anything other than a meeting spot for folks who had nothing to do but wander the streets looking to share stories," they posted on Facebook this week. "In short, we were hemorrhaging money." Penalties for violating the alcohol ban were steep: six months loss of license to sell alcohol. Several bars on the island were punished for ignoring the ban. "No establishment can sell alcohol during the emergency," the public affairs ministry declared. Well, not quite. The alcohol ban isn't absolute. Hotels—including those a short stroll from La Taberna Lúpulo in Old San Juan—can still serve alcohol without restrictions. "Somehow they are allowed to serve beer while we, less than a block away in some places, are not," Lúpulo lamented in the bar's most recent Facebook post. "Doesn't seem fair, but it's the law. We hope it doesn't lead to our insolvency, but short time will tell." That's rubbish. The curfew may or may not be necessary. But a discriminatory alcohol sales ban has no legitimate justification. After a disaster, people need spaces like La Taberna Lúpulo to help them get back on their feet. We've seen the vital role that bars and restaurants have played in places like post-Katrina New Orleans and post-9/11 New York City. As I discussed in a 2012 law-review article, bars in particular have a long and vibrant history in this country as gathering spaces that facilitate not just drink[...]

Brickbat: Religious War

Tue, 05 Sep 2017 04:00:00 -0400

(image) The Utah Department of Alcoholic Beverage Control Commission has fined St. John the Baptist Catholic Church some $600 for violating state alcohol laws. Some of the volunteer servers at a church fundraiser apparently imbibed some of the alcohol they were serving while "on duty."

Filming an Absinthe Haze

Fri, 25 Aug 2017 11:23:00 -0400

I'm tempted to call this an anti-drinking scare film of the pre–World War I era, except I'm not sure it was actually meant as a scare film:

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That's Le songe d'un garçon de café, a.k.a. The Hasher's Delirium, a 1910 short by the pioneer animator Emile Cohl. The waiter's hallucinations are the sorts of things you might see in a modern anti-drug movie. But given Cohl's background—he had been involved with the Incoherent movement, a 19th century precursor to surrealism—and given how inventively weird his other animations are, my suspicion is that his film didn't have any moral agenda at all; he wanted to draw some strange things, and he thought an absinthe haze would be as good a narrative excuse for that as any.

But that's just an educated guess. Either way, it's a nice piece of filmmaking, and I say that as someone who does not want to dissuade you from drinking at all.

(For past editions of the Friday A/V Club, go here.)

The Government’s War on Cocktails [Podcast]

Wed, 23 Aug 2017 11:42:00 -0400

"What we lost with Prohibition wasn't just a couple of drinks," says Reason's Peter Suderman, "we lost an art and a culinary tradition that is really this kind of great, uniquely American thing."

In our latest podcast, Suderman joins Nick Gillespie to talk about his feature story in the latest issue of our print magazine, "Government Almost Killed the Cocktail." They discuss why cocktails started out as morning eye-openers, Prohibition-era drinking loopholes, methods for disguising the flavor of low-quality bathtub gin, and how the ghost of Prohibition still affects drinking culture today.

Subscribe to Reason for early online access to articles and archives dating back to 1968. For just $19.95 a year, you'll get 11 print issues and digital access!

Audio produced by Ian Keyser.

Subscribe, rate, and review the Reason Podcast at iTunes. Listen at SoundCloud below:

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Voters Could Have a Chance to Repeal North Dakota's Insane Blue Laws

Wed, 02 Aug 2017 10:50:00 -0400

There are a dozen states that don't allow alcohol to be sold on Sunday. In 17 states, it's illegal to buy a car on Sunday. Those are probably the best-known examples of so-called "Blue Laws," a legacy of the puritanical spirit and prohibitionist instincts that still color lawmaking in America today. They don't make much sense once you try to apply a little logic, but they are usually not much more than minor inconveniences. Not so in North Dakota, where state lawmakers have taken blue laws to incomparable lengths. It is illegal there, for example, to buy clothing or shoes before noon on Sundays. It's also illegal to buy pots or pans, silverware, and any other sort of kitchenware. It's illegal to buy curtains, draperies, blinds, and window shades. It's illegal to buy beds, mattresses, linens, sheets, and blankets. It's illegal to buy furniture, appliances, and luggage. It's illegal to buy mirrors, lawnmowers, lamps, and air conditioners. It's technically legal on Sunday mornings to buy clothing for infants or for "transient travelers under emergency conditions," just like it's technically legal to buy hardware for "emergency plumbing, heating, cooling, or electrical repair," but good luck finding a store that's open before noon to sell it to you. Since almost anything that you'd buy in big box store, a mid-sized home goods store, or a small town hardware store is off-limits, most of them are closed until noon. And if you want to count the minutes until they open, I hope you bought a clock or watch on Saturday. Buying any sort of timepiece is illegal too. "North Dakota's current prohibition on Sunday morning shopping is arcane, unfair, and unenforceable," says Branden Medenwald, chairman of North Dakota Open on Sundays, a nonprofit working to end this state-enforced nonsense. Medenwald is pushing to have a repeal of the state's blue laws on the ballot in 2018. His organization is in the process of collecting the 20,000 signatures necessary to make that happen. "North Dakota doesn't dictate to farmers when to farm, hospitals when to practice medicine, or restaurants when to feed people. We are simply asking that all businesses, not just a chosen few, be allowed that same freedom," he wrote this week in an op-ed published at the Say Anything Blog, a website covering North Dakota politics. Earlier this year, state lawmakers considered a bill that would have repealed all the state's blue laws except the all-day ban on car sales and the all-morning ban on alcohol sales. It failed to pass, but not before one state senator used the opportunity to condemn "selfish consumerism" while another argued it was unnecessary to repeal the blue laws because North Dakotans should "use that time to go to worship." Aside from dealing a blow to the creepy notion that state lawmakers can tell people how to use their time, getting rid of the blue laws might have an actual, tangible benefit. Groups in favor of repeal—like the Greater North Dakota Association, the state's chamber of commerce—say getting rid of the bans would create jobs and benefit low-income workers. North Dakota's blue laws also have become a vehicle for crony capitalism. Since 1967, the state has allowed some businesses to open early on Sundays, though it wasn't until 1991 that general retailers were allowed to open on Sunday afternoons. (Previously they were required to be closed all day.) There are now 39 exemptions written into the state law, covering everything from pharmacies to newsstands, and from restaurants to theaters. By constantly expanding the exemptions, lawmakers have only added to the insanity. For example, a 2015 amendment allowed for the sale of alcohol to begin at 11 a.m. on Sundays, specifically so bars could cater to football fans and brunch-goers. That means it's illegal to purchase a pair of shoes or a set of kitchen utensils on Sunday morning in North Dakota, but you can buy a round for all your friends at the local [...]

Neuropsychopharmacologist David Nutt on Alcohol, LSD, and Getting Sacked for His Findings

Tue, 01 Aug 2017 12:00:00 -0400

The British psychiatrist and neuropsychopharmacologist David Nutt had reached arguably the pinnacle of his field as chairman of the government's Advisory Council on the Misuse of Drugs. Then in 2009 he was summarily dismissed from his position. In May, Reason TV's Zach Weissmueller sat down with Nutt to discuss his sacking, and what he's learned from the psychedelic research he continues to do at Imperial College London. Q: What happened that caused you to lose your job? A: We did an enormous amount of research into the comparative harms of drugs, and I discovered, somewhat to my surprise, that alcohol was actually the most harmful drug in the U.K. I started explaining to the government, "Our drug laws are wrong. Putting people in prison for cannabis possession is not fair, because alcohol is more dangerous." They did not want to hear that. Q: You just completed some research on LSD in conjunction with the Beckley Foundation. Tell me about that. A: It's a fascinating drug. In the 1950s and '60s it was going to solve the world's problems. The National Institute of Health in America funded 140 separate studies. Then as soon as it started being used recreationally, it suddenly got banned. We decided it was time to bite the bullet and do the first brain imaging study of LSD. Q: You were quite literally looking at, "This is your brain on drugs." What is our brain on this particular drug? A: Our brains are trained over decades to do things exactly the same way every day, every hour, every minute, every second. Those structures we thought were hardwired, but it turns out they're not hardwired. They can be disrupted by LSD. We think that explains why afterwards, people often feel different, and better, because the brain's been allowed to work in a slightly different way for the first time. Q: What is the application of that? A: It helps us make sense of why drugs like LSD can change the way people behave in the long term. The founder of [Alcoholics Anonymous], Bill Wilson, became a profound enthusiast for LSD. It works. People are much less likely to relapse back to drinking after they've had a psychedelic experience, because they can see there's a world out there which isn't all about the bottle. Q: Do your brain scans offer any clue as to why psychedelics seem to offer some relief to those with conditions like depression and PTSD? A: Psychiatric disorders exist because people cannot disengage. Depressed people keep thinking negative thoughts: "I made a mistake. I was a bad person." People with PTSD can't disengage from the memory and over time, those circuits in the brain become completely self-determining. They just go on and on and on, even if the person wants to stop them. I think the disruption of circuits, the breaking down of these regimented silos of function of the brain by psychedelics, can help people escape from those underlying disorders. Q: Some critics might think, "Why study psychedelics? We have pharmaceuticals that are designed to treat these disorders." A: The truth is, half of all people who are treated with antidepressants don't respond to the first dose. There are people who never respond. Disorders like alcoholism—response rates are like 10 percent, not 80 percent. So there's a huge unmet need. Q: Are there any policy changes that would enable us to proceed even more quickly? A: Oh yes: We've got to change the regulations. These drugs are all stuck in what's called Schedule I under the U.N. Conventions. We've got to get them in a schedule that allows scientists to work with them without being treated as if they're criminals. Q: How would you envision these types of drugs being integrated into health care? A: These drugs are not drugs you take every day to hold at bay your depression or your anxiety. These are drugs you use with a psychotherapist to change the way you deal with life. So I see them as being enormously powerful ways of bringing [...]

Shake Your Head at Italy's Crappy New Food Laws

Sat, 22 Jul 2017 08:00:00 -0400

Italy is home to some of the best and most memorable meals I've ever eaten. I first visited in 1994, after graduating from college, and have returned on several occasions. Some of my fondest memories are of sampling wonderful street food in Milan, drinking and dining al fresco amid the lights at night in Rome, and enjoying the amazing aromas of wonderful cooking foods that practically permeate the country. That's why I'm disheartened to learn that Italy is increasingly cracking down on its food culture—including, specifically, the aforementioned Milanese street food, drinking and dining outdoors in Rome, and the grand aromas of the country's food. Earlier this month, Milan banned food trucks from the city. Also in July, reports The Local, Rome imposed a series of bans on food and alcohol. The Roman law prohibits grocers and other stores from selling alcohol after 10 p.m. and bars people from drinking alcohol from a glass in public at that same time. It also prohibits all alcohol consumption outdoors after midnight, and cuts off all alcohol sales after 2 a.m. Rome has also joined other Italian cities—notably Florence—in prohibiting picnicking at popular historic sites. The first Saturday the alcohol ban was in place, Roman police issued more than three dozen tickets, which cost about $200 a pop. Many Romans are aghast. "It limits our freedom as a business, and our free choice as responsible adults to be able to drink after 2 a.m.," the owners of Redrum, a restaurant and bar, told The Local. "[It is] a curfew which recalls decidedly sad periods of our history." At least one U.S. publication doesn't see the big deal. Food & Wine—a magazine devoted to celebrating some of the specific things Rome has banned: food and wine—apparently doesn't see the big deal with the Roman law. "Truthfully, it doesn't sound like the law should be difficult to abide," writes F&W's Elisabeth Sherman. "You'll still be able to enjoy Rome with respect, and a glass of wine in your hand, at least until two in the morning. By then, you should be in bed anyway." This isn't all Italy's getting wrong. This month, the country's highest court ruled that restaurants that serve frozen food to customers without declaring so on their menus are guilty of civil fraud. A restaurateur who'd disputed the charges was fined more than $2,000. "Even the mere availability of frozen food, if not identified as such on the menu, constitutes attempted commercial fraud," said the ruling. (Canned tomatoes are apparently still acceptable.) In April, the same court ruled, the New York Post reports, that "cooking stinky food—like rich pasta sauces and fish—too close to neighbors" constitutes a crime. The court, in upholding a couple's fine of more than $2,000, declared cooking food that produces aromas which are subjectively "beyond the limits of tolerability" amounts to "olfactory molestation." A creeping food xenophobia also appears to be taking hold in the country. Last year, Florence imposed restrictions on so-called "foreign" food from being sold in the historic city center. Fair Verona barred "ethnic" foods. This year, Venice banned new fast food outlets, focusing in part on kebab shops, in order to preserve Italian "decorum and traditions." Add to these recent crackdowns the country's ban on cultivating GMO crops and the creeping takeover of the food sector by the mafia, and Italy's future as a culinary titan would seem to be in jeopardy. It was only last summer that I wrote here about a new food law Italy had gotten right. In that case, Italy took action to combat food waste by rolling back complex government recordkeeping requirements and rules barring food from being shared. But one good law can't stand up to heaps of awful ones, which seems to be about all that's cooking in Italy these days.[...]

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 [...]

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 [...]

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[...]

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 fa[...]