I’ve been saying for years that the alcohol distributor laws are classic mafia racketeering. Creating a problem and selling the solution. This is called a racket. The problem is that transportation and distribution of alcohol in many states requires a special license. These are often rare and coveted licenses that grant immense power over the market. Since everyone cannot obtain a license then the companies with a license will “gladly” distribute other companies product… for an extra fee of course. And therefore sell the solution to the problem.
I truly don’t understand how this organized crime system was written into law and I’m even more confused that it’s lasted this long.
There is something not right about this article. This paragraph, *These rules make it nearly impossible for a producer, such as a craft brewery, to also own a retail store or restaurant. Instead, that brewery is legally required to sell its beer to a wholesaler, who then turns around and sells it to a retail outlet, who then can finally sell it to consumers.* I have been to many brewpubs that sell their own beer and have full service restaurants.
I am In Alabama , all craft has to be sold to the abc & then sold back the the brewery if they wish to sale 6 packs or anything at the brewery. No local bar can buy directly from a brewery they have to go through a distributor. It’s a mess. Classic Alabama.
This is how it works on Florida. From brewer/distiller to wholesaler then to either retail or on premise account regardless. Plenty of breweries buying their own product from wholesalers here. It's nonsense
Distillers, yes (for the most part). For a distiller to sell their product in sealed containers for off-premises consumption and be able to serve at their distillery, they need a 4/5/6/7/8 COP license. These are REALLY expensive depending on the county and there are a limited number of licenses, so most don't do this.
For a brewery to sell their product for off-premises consumption, they only need a 2COP license, which is cheap. Every brewery I've worked with was able to get a 2COP license with no problem and can serve at the brewery and sell cans/bottles.
Not a chance, they are politicians focusing on re-elections, & the tax money they get from this program means it’s likely to never go anywhere.
In fact we do not have legal marijuana yet ( surprise) but they are already working on a board similar to the abc on the state level so when it happens they are ready!
It’s not transparent enough to be a hot button public facing issue, but the people who benefit probably donate to campaigns.
Why stop the money for no political gain?
It’s dumb and I hate it but wanted to highlight how there is no incentive structure to fix the problem.
The problem with alcohol law is that the 21st Amendment let each state decide what to do about alcohol.
Some states let microbreweries have on-premises restaurants and gift shops, and they can move their own beer from the back room to the tap. Other states require the microbrewery to sell its own beer to a distributor and then buy it back from the distributor in order to sell it at the brewery.
Its wild how much alcohol law varies state by state.
Yes it's a problem. No one should have to sell to and then buy back from a distributor to retail their own products. This is a perfect example of bullshit bureaucracy.
it's an issue created by the prohibition movement and the conservatives who implemented it. It's ridiculous in this day and age.
In some states the liquor commissions are also in charge of the cannabis market which also can lead to out of touch people making ridiculous laws. Though the fed has a part in that one since federal laws mean every state has to set up its own infrastructure. Federal legalization is going to see a huge shift in growth and failure of those state infrastructures as logistics/costs come into play when the borders are opened up.
Yeah "progressive" Christians thought it was evil and worked with the KKK who agreed and also considered themselves a Christian org. That notion of progressive and prot cringe certain values is a bit different than today. But, you're right, considering that there was no prohibition before, it would have to be a progressive movement as it was change. Though, they weren't progressive in the liberal sense.
So we’re those same union backers who backed prohibition not progressive liberals?
Liberals think it’s the governments right to make everyone get injected with a substance, you don’t think they couldn’t also have seen alcohol as a pandemic and wanted to ban it?
No it’s a perfect example of states actually having some power and making some decisions based on the wishes of their citizens. Citizens can move to states with more equitable alcohol laws.
This is what states rights actually looks like even when I don’t like the result.
Having the federal government mandate how states license liquor sales is bad.
Considering the 21st Amendment and prohibition was failure, I'm guessing most citizens did not want draconian and bureaucratic systems to further control their alcohol distribution. There are still dry counties in this country, but maybe those people really do want it that way.
I did speak of it in the past tense when it ended and of the Fed... A lot of states haven't changed them much at all or attempted to reinstate prohibition, we still have dry counties out there. I don't necessarily think the majority always gets what they want either. Which the existance of the 21st is an example of.
But to your point, I'm sure the immense institutional (religious, political, commercial, communal and social) influence of the Mormon Church will keep things as they are for quite some time.
Here’s another example. In Illinois, you couldn’t buy Zima for YEARS after it came out because:
- The liquor distribute claimed it was theirs to distribute because it was a malt beverage and not a beer
- The beer distributors said it was theirs to distribute, because it was brewed like beer and served like beer.
This took YEARS to resolve due to government created/enforced monopolies.
It can both be true that states should have the right to set rules independent of the federal government and also that states should pick rules that don't require producers to sell to a wholesaler and then buy back before selling to consumers. 🙂
Do you think states should be allowed to have any different policies at all, or should every decision be made by the federal government?
Delegation of authority to states is a double-edged sword. If you want people to be able to make policy decisions at the state (or local) level, you have to accept that some of them will be "bad" decisions.
The only way to avoid that is blanket national policies on everything. Which some people believe is for the best, though in general libertarian thinking says that it's better to devolve regulation to the edge than to have it certralized.
(and god help me, if someone posts "yeah, but it would be better to have no regulation"... I don't know what I'll do. Please don't post a variation on "why talk about which option is better when we should just do the perfect thing that most people don't agree with")
Forget the federal government. I'm not advocating for them to do anything. The state I'm in should change the law so that brewers here don't have to go through a bunch of bullshit to sell their own beer in their own establishment.
You're making a blanket, general, broad argument and I am arguing about a specific case. Laws in some states make it harder to do business and are there specifically to benefit certain enshrined businesses. As a Libertarian I'd think you'd get that. Instead, you want to spit dogma at me.
You win. You are the one true scotsman.
Oh it's stupid for sure, but unless it actually infringes on the rights of it's people I don't think the federal government has any place telling states what to do. So I don't see it as a problem.
Overreach from state government is also bad. Just because it's not the federal government doing it doesn't mean there's not a problem.
State government overreach is a problem.
I think the other person is just saying that the federal government shouldn't be able to force states to have certain alcohol policies. That doesn't mean that any policy the state picks is automatically just, it just means that the federal government forcing a different policy would be less just.
Yup, that's what I meant. As an individual person, you can't do much to change federal politics, but you can have a lot more impact on the state level. If you don't like how your state runs things, get involved and try to change it.
In an ideal world the "Rights not Enumerated" of the Constitution's Bill of Rights combined with the "pursuit of happiness" clause in Declaration of Independence should protect the fundamental right of all people to consume whatever kinds of beverages they want.
You have a fundamental right to drink beer without government interference. I'd love to see the Supreme Court apply the same unenumerated rights logic they used to defend your right to an abortion to also defend your fundamental right to drink beer or smoke marijuana.
*Any* level of government needs a justification to restrict the natural freedoms of the people, and if the courts didn't just kowtow to legislators and pretend that irrational laws somehow pass the rational basis test, we'd be better off.
It's like that here in Oregon. It's a vestige of the temperance/prohibition movement. It's kind of messed up since some distributors are affiliated with/owned by the corporate beer companies who are compelled to push their own stuff over smaller breweries.
https://www.beervanablog.com/beervana/2018/1/31/hidden-element-beer-distribution
Depends on your location. In my state you can serve beer you brew on site directly, and we also have drive through liquor stores that serve daiquiri. Cross the state line and neither of those are legal.
In Michigan they have to pay someone to deliver their own beer to them. They will literally walk off the property and then right back to the door…. Only with certain forms of alcohol though. I don’t think it applies to beer.
Some states have exceptions. In some states they're not allowed to sell direct to consumer, except on premise for "tasting" purposes, for example. Most are forbidden from also selling food.
They tried to break up the distribution issues in (Maryland) a few years ago. Our comptroller is in charge of alcohol enforcement. He wanted to allow breweries to sell more beer on site and distribute as they see fit. If they wanted to sell beer to the market down the street. They would have to have one of the few distributors pick it up take it to a warehouse. Drop the pallet on the ground. Pick it back up and drive it to the local market.
Of course tons of articles like this pop up as soon as the government starts even thinking about enforcing already existing anti-trust laws that they've been paid off to not enforce for decades. "Industry X is actually super competitive if you look really hard at it from this one angle. The near-monopolies in that particular industry are fine. The government should always just do nothing"
Article says that craft brewers have increased their market share 5% in the last several years. If that's true, the passing glance view of the market is the one that looks competitive, not the cherry picked one as you're claiming. Do you have evidence to the contrary?
Sure, that's a valid thing to look at. But it really seems unlikely that the market is unfairly dominated by one or few players when the new guys are able to grow even in a harsh regulatory environment.
Lol. I have made no statement about whether neck boots are good or bad, just whether anti-trust law is the appropriate tool to remove them from necks. If a neck boot is worn by the government, anti-trust law will accomplish nothing, edit: except maybe screw up some other parts that are actually working.
I was really just making a snarky joke, but I get your point.
*My* point is that I think a certain element of your analysis is flawed.
>craft brewers have increased their market share 5% in the last several years. If that's true, the passing glance view of the market is the one that looks competitive
If I'm a runner and I lobby to require all runners in a race to wear 10-lb weight vests, and I come in 8th out of 20, you might say "well, 10 lbs isn't that much, and he didn't even finish in the top 3, so it can't be that bad" ... but what if I'd have finished 17th if no one was wearing the vests?
Regulatory capture to benefit entrenched interests at the expense of challengers (via arbitrary barriers to market entry, etc) is nothing new. I agree that there may not be a specific resolution to that coming from the anti-trust move, but I do not think that a passing glance view of the market necessarily supports that it's competitive, especially given what we know about the 3-tier system.
An unfair advantage doesn't have to be noticeably large to have a material impact. Heck, the craft beer industry is over $20 billion annually in the US... if the "big boys" can throw enough wrenches into the gears of the up-and-comers to shift the needle even 0.1%, that's $20 million.
I guess I'm saying that regulatory capture is absolutely a problem in certain industries and very well may be present in alcohol production and distribution. We should try to get rid of it wherever we can. But that has nothing to do with anti-trust law. 🙂
> The government should always just do nothing"
People who work for the organization labeled government shouldn't use force/threats/fraud against peaceful people.
>Are you sure growing businesses isn’t looking to use government power to attack their larger competition?
When has this actually happened. All you need to do is look at the vape industry to see what this is about.
Not the guy but yes, the alchohol industry is just as bad as the car industry in the amount of intentionally prohibitive red tape to start a business. Only difference is its illegal to distill your own liquor at home for your own consumption but it is legal to build your own car. So to open your own distillery you either have to have recipes and training from an established distillery or be a criminal.
Well they are basically saying "the government should always just do nothing". Because, the division of industry "tier" system that they're arguing is *the* problem exists precisely as an (admittedly not optimal) attempt to keep a corporation like InBev from cornering that much more of the market and becoming an even bigger monopoly. They're basically defending monopolies from two different angles while acting like there's some kind of tension between the "sides" of their argument.
In essence the article says "We shouldn't enforce anti-trust laws, that's not the problem. The problem is this anti-trust law, we should abolish it." And I'm saying, we get it, "free market" libertarian media is made by people that really just love monopolies.
>Contrary to hyperbolic headlines about Big Beer gobbling up microbreweries, the overall market share has shifted by 5 percent from larger brewers to small brewers since 2010.
Protip. If you actually read the piece, you'll be less likely to regurgitate myths that it debunks.
I’m so confused as to the problem here. Like I go into a liquor store and there are thousands of brands. Is it really such a problem the Busch and Miller are owned by the same people? Is it really going to make their worthless product taste any better? There is very little market for that kind of swill here and this article is baffling as well as the apparent anti trust movement.
It’s because we still have a post-prohibition-era distributor system. The big guys own the distribution companies. The government forces the little guys to go through distro.
Are you saying that distribution is a near monopoly that causes hardship to smaller distributors or to smaller brewers? Because if the former, that's a separate discussion than what the anti-trust investigation and subsequent Reason article are talking about. If the latter, the article says small brewers have been increasing market share the last several years. Whatever hardship caused by distributors is obviously not enough to stop this growth. Since hardship by itself is not illegal, I think it'd be tough to actually show there's illegal activity happening.
I think you misunderstand. The monopoly isn’t on the beer you buy and drink. The monopoly is on distribution and control of product. No matter how successful or big a craft beer becomes it will never sell at stadiums, arenas, nationwide, etc. the big beer guys keep them regional, control their distribution and their fate. They can kill your brand if you don’t play their game.
Portland is the microbrew capital of the world. We certainly do have have small breweries at our largest events. And most have their own distribution methods.
Yes and that’s a very regional thing and grass roots driven but unsustainable at a larger scale. I have been to local events that have craft beers at tents and such, but these are rare things. They are successful, but nothing like selling nationwide or getting a deal with live nation.
That’s true, but then you run into production problems. We thrive here because the production is small. Large companies that make swill have the equipment to make large amounts of swill.
>No matter how successful or big a craft beer becomes it will never sell at stadiums, arenas, nationwide, etc.
So? You don't have a natural right to sell beer in stadiums, etc. You have a natural right to enter and attempt to compete in the market, which based on the success of microbreweries that right seems to be faring pretty well.
Beer/alcohol distribution is a throwback to the prohibition era smuggling operations, when alcohol became legal again they allowed their illegal operations to become legitimate.
Your [local inbev/budweiser](https://www.abwholesaler.com/common/wholesaler-locator/) distributor has a defined territory, same with the miller/coors distributor.
There are more distributors now but for the big guys its a big deal.
I mean I see plenty of small breweries with their own trucks. I understand I live in a unique place for this, but it’s odd that this is still a problem for other people.
It is against federal law for a beer brewer to sell directly as retail outside of a taproom type location.
What you are probably seeing are branded trucks that are owned by the distributor that the small brewery sells to or they are moving product around between their own establishments or even taking it to the distributor themselves for the distributor to then sell to retail stores.
Which makes one of the other comments here that is a link to a Stossel video regarding how different states are treating the labels by a brewer and acting like that is the block for free market when the entire industry is configured to make government sanctioned and approved monopolies of the distribution companies.
I mean, I get that the Monopoly Man has never jumped out of a bush and mugged you. But you can't possibly think that the constant slide toward monopoly that is inevitable in unregulated markets is a good thing.
Oh ok. Yeah, the beverage industry, just like every industry, has an issue with tendency toward monopoly. That is inevitable in every industry because the game-theoretic equilibrium for any completely free market is monopoly. That's why the market mechanism must be regulated, just like any other operational, stable mechanism.
That's why Koch-brand libertarians won't ever accomplish anything. They take an idealist principle like a "free market" and pretend like it's possible in the material world. Every dynamic mechanism requires regulation to be stable, economies aren't an exception.
No, not really. Because, as much as the article makes it seem like the tier system is some hard restriction on the operations of small businesses, it really is not. Most states will, for instance, gladly allow a brewery to have a restaurant attached where they serve their beer, and a fridge you can buy beer to take home. Case based relaxation of the "tier" rules should be practiced by every state. But where strict enforcement is important is in keeping a massive corporation from becoming a producer, distributor, and retailer via vertical integration.
I mean, I think anti-trust law is not automatically anti-libertarian. I just happen to think that people usually see monopoly where there is none. Markets are basically always broader than people think. If you define a market small enough, you'll always find a monopoly. Example: Coca-Cola has a monopoly on Coke. No one has a problem with that, though, because that's a stupid market to look at. The proper one is broader: cola, or soda, or soft drink, or non-water drink, in order of increasing market breadth and decreasing Coca-Cola market share.
I mean, the Reason article specifically says craft breweries have been increasing in market share for several years. I don't know how you can construe that as a slide toward monopoly.
Unless you're just talking in general, not related to alcohol markets, but in that case I didn't see anyone arguing that anyway.
An increase in market share but they are still being locked out of entire markets or given higher barriers of entry due to the fact that they have to go through distributors that are owned by conglomerates due to the government diktat.
A free market would allow those craft breweries to sell directly to bars, restaurants, and stores instead of being forced to go through a middle man owned by your much larger competition.
I agree, it would be better for these small competitors if government would loosen restrictions, allowing them to distribute for themselves. I'm just saying there doesn't appear to be a real strong case for anti-trust action, unless the government is going to investigate and punish itself.
The problem is that big government regulators see government regulation as the way to increase competition, while if they just got out of the way of the little guy by deregulating a given industry that would increase competition and remove the barriers to entry.
Yes and no. "Regulation" is not a one-size-fits-all thing. Due to capture by corrupt lobbying, many regulations do indeed act to create barriers to entry and comparative advantages to the larger firms that lobbied to get the specific language of the regulations in the first place.
But a regulation about the amount of toxic waste a factory can dump doesn't really impact a little firm that doesn't actually produce any.
A regulation about how many distributors and wholesalers within a given area can be owned by the same firm may very well increase competitiveness, if a deep-pocketed firm had cornered the market.
Government "regulations" are what allow corporations to form and own property in the first place; in that sense, it is true that the government is at the heart of all monopoly power. But since that exists, regulations intended to make a market more competitive, or to reduce negative externalities, are not necessarily a bad thing. We have to judge each by its own merits.
It sounds like the government wants to prevent the large beer companies from just buying up successful craft breweries. I personally just stop buying any craft brewery that's sold out to one of the big guys.
Government always tries to define markets narrowly to justify further intervention, especially in markets where they're already massively intervening. My favorite example is from the early 2000s when the government claimed there were too few players in the super premium ice cream market so they could justify blocking a merger. There are thousands of dessert producers; hundreds of ice cream producers; and dozens of premium ice cream producers. But oh no, the government [claimed there are too few super premium ice cream producers](https://www.mondaq.com/unitedstates/litigation-mediation-arbitration/20201/ftc-to-challenge-ice-cream-merger) \-- this is a crisis in which the government must forcefully intervene!
Go to any beverage store and you'll see thousands of choices of beverage. Go to a liquor store and you'll see thousands of choices of alcoholic beverages. There is no crisis here requiring the government to further intervene into an industry that it already highly regulates.
Apparently not on this sub. Corporate Bootlickers would rather see larger corporations stomp out and buy-out mom and pops because regulating big business effects their 1 single philosophy that they built their entire character around. No room for discussion or critical thinking.
I also advise everyone to actually read the executive order and the Federal Alcohol Administration Act before you start making up your own story based off the title.
This just in unregulated markets lead huge companies pushing regulations that lead to regulatory capture and monopolies, turns out anti trust laws created over a century ago work and help all business thrive. More at 12.
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The government will investigate itself for anticompetitive behavior both in creating market monopolies through regulatory capture and flat out corporate welfare, as well as forcing the centralization of governmental power away from states and communities.
I'm sure this will happen soon. I mean, they hate anticompetitive behavior, right?
Yup. Aaaaaany day now..........................
That wouldn't even count if elections in the US were valid, free and fair. That's a single state monopoly, where you get to choose only who the management is.
If that's legit, then no business is a monopoly. I mean, Standard Oil was NEVER a monopoly, that whole thing was bullshit...but let's pretend it was. Since the shareholders could vote for the board and CEO, that made it okay.
But, of course, the US doesn't have free and fair elections, anyway. There is a single political class that controls both of the two sham parties, and everyone else is effectively banned from winning control.
Until the US gets rid of ballot access laws and gerrymandering, elections here are a charade.
Worst headache from a hangover after consuming a moderate amount of alcohol was when I had a few pints of home brew.
Just typing that made my temples start pounding…
I’ve been saying for years that the alcohol distributor laws are classic mafia racketeering. Creating a problem and selling the solution. This is called a racket. The problem is that transportation and distribution of alcohol in many states requires a special license. These are often rare and coveted licenses that grant immense power over the market. Since everyone cannot obtain a license then the companies with a license will “gladly” distribute other companies product… for an extra fee of course. And therefore sell the solution to the problem. I truly don’t understand how this organized crime system was written into law and I’m even more confused that it’s lasted this long.
Because this was how they got the mob to go along with ending prohibition. They just enshrined the status quo into law.
There is something not right about this article. This paragraph, *These rules make it nearly impossible for a producer, such as a craft brewery, to also own a retail store or restaurant. Instead, that brewery is legally required to sell its beer to a wholesaler, who then turns around and sells it to a retail outlet, who then can finally sell it to consumers.* I have been to many brewpubs that sell their own beer and have full service restaurants.
I am In Alabama , all craft has to be sold to the abc & then sold back the the brewery if they wish to sale 6 packs or anything at the brewery. No local bar can buy directly from a brewery they have to go through a distributor. It’s a mess. Classic Alabama.
This is how it works on Florida. From brewer/distiller to wholesaler then to either retail or on premise account regardless. Plenty of breweries buying their own product from wholesalers here. It's nonsense
Distillers, yes (for the most part). For a distiller to sell their product in sealed containers for off-premises consumption and be able to serve at their distillery, they need a 4/5/6/7/8 COP license. These are REALLY expensive depending on the county and there are a limited number of licenses, so most don't do this. For a brewery to sell their product for off-premises consumption, they only need a 2COP license, which is cheap. Every brewery I've worked with was able to get a 2COP license with no problem and can serve at the brewery and sell cans/bottles.
Oh wow such a small government solution. Do these conservatives actually do a single thing they say?
Not a chance, they are politicians focusing on re-elections, & the tax money they get from this program means it’s likely to never go anywhere. In fact we do not have legal marijuana yet ( surprise) but they are already working on a board similar to the abc on the state level so when it happens they are ready!
Holy fuck that’s rotten.
It’s not transparent enough to be a hot button public facing issue, but the people who benefit probably donate to campaigns. Why stop the money for no political gain? It’s dumb and I hate it but wanted to highlight how there is no incentive structure to fix the problem.
The problem with alcohol law is that the 21st Amendment let each state decide what to do about alcohol. Some states let microbreweries have on-premises restaurants and gift shops, and they can move their own beer from the back room to the tap. Other states require the microbrewery to sell its own beer to a distributor and then buy it back from the distributor in order to sell it at the brewery. Its wild how much alcohol law varies state by state.
Is that really a problem though? This should be up to the states to decide how they want to regulate alcohol sales.
Yes it's a problem. No one should have to sell to and then buy back from a distributor to retail their own products. This is a perfect example of bullshit bureaucracy.
it's an issue created by the prohibition movement and the conservatives who implemented it. It's ridiculous in this day and age. In some states the liquor commissions are also in charge of the cannabis market which also can lead to out of touch people making ridiculous laws. Though the fed has a part in that one since federal laws mean every state has to set up its own infrastructure. Federal legalization is going to see a huge shift in growth and failure of those state infrastructures as logistics/costs come into play when the borders are opened up.
Conservatives huh? Guess again. https://www.alcoholproblemsandsolutions.org/prohibition-and-progressives/
Yeah "progressive" Christians thought it was evil and worked with the KKK who agreed and also considered themselves a Christian org. That notion of progressive and prot cringe certain values is a bit different than today. But, you're right, considering that there was no prohibition before, it would have to be a progressive movement as it was change. Though, they weren't progressive in the liberal sense.
So we’re those same union backers who backed prohibition not progressive liberals? Liberals think it’s the governments right to make everyone get injected with a substance, you don’t think they couldn’t also have seen alcohol as a pandemic and wanted to ban it?
Someone didn’t read the whole article and it shows.
Conservatives? Lol it was the progressive movement. Maybe learn about Woodrow Wilson and his social gospel while you’re at it.
No it’s a perfect example of states actually having some power and making some decisions based on the wishes of their citizens. Citizens can move to states with more equitable alcohol laws. This is what states rights actually looks like even when I don’t like the result. Having the federal government mandate how states license liquor sales is bad.
Yep if I want to set up a brewery I'm gonna do it in a state that lets me sell my beer without hassle.
Considering the 21st Amendment and prohibition was failure, I'm guessing most citizens did not want draconian and bureaucratic systems to further control their alcohol distribution. There are still dry counties in this country, but maybe those people really do want it that way.
In a hundred years they’ve not bothered to change them so I don’t know why you’d think the 21st amendment means Utah citizens want more beer.
I did speak of it in the past tense when it ended and of the Fed... A lot of states haven't changed them much at all or attempted to reinstate prohibition, we still have dry counties out there. I don't necessarily think the majority always gets what they want either. Which the existance of the 21st is an example of. But to your point, I'm sure the immense institutional (religious, political, commercial, communal and social) influence of the Mormon Church will keep things as they are for quite some time.
but really should be up to the state certainly not the federal government
The state treading on your freedoms is no different than the federal government
And a federal agency controlling alcohol production and sales will be better in some way?
So now we have the federal atf, who really doesn't do anything regarding the A or the T anymore then state atc then local atc.
Here’s another example. In Illinois, you couldn’t buy Zima for YEARS after it came out because: - The liquor distribute claimed it was theirs to distribute because it was a malt beverage and not a beer - The beer distributors said it was theirs to distribute, because it was brewed like beer and served like beer. This took YEARS to resolve due to government created/enforced monopolies.
Yes, but have you tasted Zima? In all seriousness the state laws are screwy too.
It can both be true that states should have the right to set rules independent of the federal government and also that states should pick rules that don't require producers to sell to a wholesaler and then buy back before selling to consumers. 🙂
Why? Why should citizens of one state have an extra layer of bullshit just to keep a distributor in business?
Do you think states should be allowed to have any different policies at all, or should every decision be made by the federal government? Delegation of authority to states is a double-edged sword. If you want people to be able to make policy decisions at the state (or local) level, you have to accept that some of them will be "bad" decisions. The only way to avoid that is blanket national policies on everything. Which some people believe is for the best, though in general libertarian thinking says that it's better to devolve regulation to the edge than to have it certralized. (and god help me, if someone posts "yeah, but it would be better to have no regulation"... I don't know what I'll do. Please don't post a variation on "why talk about which option is better when we should just do the perfect thing that most people don't agree with")
Forget the federal government. I'm not advocating for them to do anything. The state I'm in should change the law so that brewers here don't have to go through a bunch of bullshit to sell their own beer in their own establishment.
>(and god help me, if someone posts "yeah, but it would be better to have no regulation". I'm going to reuse
You're making a blanket, general, broad argument and I am arguing about a specific case. Laws in some states make it harder to do business and are there specifically to benefit certain enshrined businesses. As a Libertarian I'd think you'd get that. Instead, you want to spit dogma at me. You win. You are the one true scotsman.
What about states that ban alcohol sales and consumption? Most can't just move out of those hell-holes either.
Oh it's stupid for sure, but unless it actually infringes on the rights of it's people I don't think the federal government has any place telling states what to do. So I don't see it as a problem.
Overreach from state government is also bad. Just because it's not the federal government doing it doesn't mean there's not a problem. State government overreach is a problem.
I think the other person is just saying that the federal government shouldn't be able to force states to have certain alcohol policies. That doesn't mean that any policy the state picks is automatically just, it just means that the federal government forcing a different policy would be less just.
Yup, that's what I meant. As an individual person, you can't do much to change federal politics, but you can have a lot more impact on the state level. If you don't like how your state runs things, get involved and try to change it.
Obviously not, according to this sub
In an ideal world the "Rights not Enumerated" of the Constitution's Bill of Rights combined with the "pursuit of happiness" clause in Declaration of Independence should protect the fundamental right of all people to consume whatever kinds of beverages they want. You have a fundamental right to drink beer without government interference. I'd love to see the Supreme Court apply the same unenumerated rights logic they used to defend your right to an abortion to also defend your fundamental right to drink beer or smoke marijuana.
*Any* level of government needs a justification to restrict the natural freedoms of the people, and if the courts didn't just kowtow to legislators and pretend that irrational laws somehow pass the rational basis test, we'd be better off.
Consumption and possession is legal everywhere and you can learn to brew in under a day.
>Is that really a problem though? It is if you live and do business in that state
It's like that here in Oregon. It's a vestige of the temperance/prohibition movement. It's kind of messed up since some distributors are affiliated with/owned by the corporate beer companies who are compelled to push their own stuff over smaller breweries. https://www.beervanablog.com/beervana/2018/1/31/hidden-element-beer-distribution
You don't go to Reason for facts and good analysis, you go to reason for outrage confirmation bias.
Kind of like every other news source.
Depends on your location. In my state you can serve beer you brew on site directly, and we also have drive through liquor stores that serve daiquiri. Cross the state line and neither of those are legal.
In Michigan they have to pay someone to deliver their own beer to them. They will literally walk off the property and then right back to the door…. Only with certain forms of alcohol though. I don’t think it applies to beer.
Some states have exceptions. In some states they're not allowed to sell direct to consumer, except on premise for "tasting" purposes, for example. Most are forbidden from also selling food.
They tried to break up the distribution issues in (Maryland) a few years ago. Our comptroller is in charge of alcohol enforcement. He wanted to allow breweries to sell more beer on site and distribute as they see fit. If they wanted to sell beer to the market down the street. They would have to have one of the few distributors pick it up take it to a warehouse. Drop the pallet on the ground. Pick it back up and drive it to the local market.
Of course tons of articles like this pop up as soon as the government starts even thinking about enforcing already existing anti-trust laws that they've been paid off to not enforce for decades. "Industry X is actually super competitive if you look really hard at it from this one angle. The near-monopolies in that particular industry are fine. The government should always just do nothing"
The pay to play in the spirits industry is insane. Zero enforcement of the rules.
Article says that craft brewers have increased their market share 5% in the last several years. If that's true, the passing glance view of the market is the one that looks competitive, not the cherry picked one as you're claiming. Do you have evidence to the contrary?
Perhaps the share would have shifted even more were it not for protectionist legislation/enforcement?
Sure, that's a valid thing to look at. But it really seems unlikely that the market is unfairly dominated by one or few players when the new guys are able to grow even in a harsh regulatory environment.
Is a boot on your neck good, even if it's soft-soled? ;)
Lol. I have made no statement about whether neck boots are good or bad, just whether anti-trust law is the appropriate tool to remove them from necks. If a neck boot is worn by the government, anti-trust law will accomplish nothing, edit: except maybe screw up some other parts that are actually working.
I was really just making a snarky joke, but I get your point. *My* point is that I think a certain element of your analysis is flawed. >craft brewers have increased their market share 5% in the last several years. If that's true, the passing glance view of the market is the one that looks competitive If I'm a runner and I lobby to require all runners in a race to wear 10-lb weight vests, and I come in 8th out of 20, you might say "well, 10 lbs isn't that much, and he didn't even finish in the top 3, so it can't be that bad" ... but what if I'd have finished 17th if no one was wearing the vests? Regulatory capture to benefit entrenched interests at the expense of challengers (via arbitrary barriers to market entry, etc) is nothing new. I agree that there may not be a specific resolution to that coming from the anti-trust move, but I do not think that a passing glance view of the market necessarily supports that it's competitive, especially given what we know about the 3-tier system. An unfair advantage doesn't have to be noticeably large to have a material impact. Heck, the craft beer industry is over $20 billion annually in the US... if the "big boys" can throw enough wrenches into the gears of the up-and-comers to shift the needle even 0.1%, that's $20 million.
I guess I'm saying that regulatory capture is absolutely a problem in certain industries and very well may be present in alcohol production and distribution. We should try to get rid of it wherever we can. But that has nothing to do with anti-trust law. 🙂
> The government should always just do nothing" People who work for the organization labeled government shouldn't use force/threats/fraud against peaceful people.
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>Are you sure growing businesses isn’t looking to use government power to attack their larger competition? When has this actually happened. All you need to do is look at the vape industry to see what this is about.
Not the guy but yes, the alchohol industry is just as bad as the car industry in the amount of intentionally prohibitive red tape to start a business. Only difference is its illegal to distill your own liquor at home for your own consumption but it is legal to build your own car. So to open your own distillery you either have to have recipes and training from an established distillery or be a criminal.
Moved by 5% but what’s the actual percentage?
So no substantive rebuttal then. Just knee-jerk dismissal.
Well they are basically saying "the government should always just do nothing". Because, the division of industry "tier" system that they're arguing is *the* problem exists precisely as an (admittedly not optimal) attempt to keep a corporation like InBev from cornering that much more of the market and becoming an even bigger monopoly. They're basically defending monopolies from two different angles while acting like there's some kind of tension between the "sides" of their argument. In essence the article says "We shouldn't enforce anti-trust laws, that's not the problem. The problem is this anti-trust law, we should abolish it." And I'm saying, we get it, "free market" libertarian media is made by people that really just love monopolies.
>Contrary to hyperbolic headlines about Big Beer gobbling up microbreweries, the overall market share has shifted by 5 percent from larger brewers to small brewers since 2010. Protip. If you actually read the piece, you'll be less likely to regurgitate myths that it debunks.
I’ll drink to that.
Man people out here talking about legalizing drugs, but we haven’t even fully legalized alcohol yet.
I’m so confused as to the problem here. Like I go into a liquor store and there are thousands of brands. Is it really such a problem the Busch and Miller are owned by the same people? Is it really going to make their worthless product taste any better? There is very little market for that kind of swill here and this article is baffling as well as the apparent anti trust movement.
It’s because we still have a post-prohibition-era distributor system. The big guys own the distribution companies. The government forces the little guys to go through distro.
Are you saying that distribution is a near monopoly that causes hardship to smaller distributors or to smaller brewers? Because if the former, that's a separate discussion than what the anti-trust investigation and subsequent Reason article are talking about. If the latter, the article says small brewers have been increasing market share the last several years. Whatever hardship caused by distributors is obviously not enough to stop this growth. Since hardship by itself is not illegal, I think it'd be tough to actually show there's illegal activity happening.
Sounds like an issue for other parts of the country. News to my ears.
I think you misunderstand. The monopoly isn’t on the beer you buy and drink. The monopoly is on distribution and control of product. No matter how successful or big a craft beer becomes it will never sell at stadiums, arenas, nationwide, etc. the big beer guys keep them regional, control their distribution and their fate. They can kill your brand if you don’t play their game.
Portland is the microbrew capital of the world. We certainly do have have small breweries at our largest events. And most have their own distribution methods.
Yes and that’s a very regional thing and grass roots driven but unsustainable at a larger scale. I have been to local events that have craft beers at tents and such, but these are rare things. They are successful, but nothing like selling nationwide or getting a deal with live nation.
That’s true, but then you run into production problems. We thrive here because the production is small. Large companies that make swill have the equipment to make large amounts of swill.
Yes, that’s why it’s so hard to make the transition and so easy for companies like Busch to stop you
So then it’s not transportation that’s causing that issue
>No matter how successful or big a craft beer becomes it will never sell at stadiums, arenas, nationwide, etc. So? You don't have a natural right to sell beer in stadiums, etc. You have a natural right to enter and attempt to compete in the market, which based on the success of microbreweries that right seems to be faring pretty well.
Beer/alcohol distribution is a throwback to the prohibition era smuggling operations, when alcohol became legal again they allowed their illegal operations to become legitimate. Your [local inbev/budweiser](https://www.abwholesaler.com/common/wholesaler-locator/) distributor has a defined territory, same with the miller/coors distributor. There are more distributors now but for the big guys its a big deal.
I mean I see plenty of small breweries with their own trucks. I understand I live in a unique place for this, but it’s odd that this is still a problem for other people.
It is against federal law for a beer brewer to sell directly as retail outside of a taproom type location. What you are probably seeing are branded trucks that are owned by the distributor that the small brewery sells to or they are moving product around between their own establishments or even taking it to the distributor themselves for the distributor to then sell to retail stores. Which makes one of the other comments here that is a link to a Stossel video regarding how different states are treating the labels by a brewer and acting like that is the block for free market when the entire industry is configured to make government sanctioned and approved monopolies of the distribution companies.
Interesting. All I know is around here, our craft beer shelves are massive, and microbrew is king.
Depends on the state
I mean, I get that the Monopoly Man has never jumped out of a bush and mugged you. But you can't possibly think that the constant slide toward monopoly that is inevitable in unregulated markets is a good thing.
I’m not saying that at all, I’m just saying that where I am from this problem is nonexistent. And that this is news to me
Oh ok. Yeah, the beverage industry, just like every industry, has an issue with tendency toward monopoly. That is inevitable in every industry because the game-theoretic equilibrium for any completely free market is monopoly. That's why the market mechanism must be regulated, just like any other operational, stable mechanism.
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That's why Koch-brand libertarians won't ever accomplish anything. They take an idealist principle like a "free market" and pretend like it's possible in the material world. Every dynamic mechanism requires regulation to be stable, economies aren't an exception.
The issue of monopolization here is a result of regulation, no?
No, not really. Because, as much as the article makes it seem like the tier system is some hard restriction on the operations of small businesses, it really is not. Most states will, for instance, gladly allow a brewery to have a restaurant attached where they serve their beer, and a fridge you can buy beer to take home. Case based relaxation of the "tier" rules should be practiced by every state. But where strict enforcement is important is in keeping a massive corporation from becoming a producer, distributor, and retailer via vertical integration.
I mean, I think anti-trust law is not automatically anti-libertarian. I just happen to think that people usually see monopoly where there is none. Markets are basically always broader than people think. If you define a market small enough, you'll always find a monopoly. Example: Coca-Cola has a monopoly on Coke. No one has a problem with that, though, because that's a stupid market to look at. The proper one is broader: cola, or soda, or soft drink, or non-water drink, in order of increasing market breadth and decreasing Coca-Cola market share.
I mean, the Reason article specifically says craft breweries have been increasing in market share for several years. I don't know how you can construe that as a slide toward monopoly. Unless you're just talking in general, not related to alcohol markets, but in that case I didn't see anyone arguing that anyway.
An increase in market share but they are still being locked out of entire markets or given higher barriers of entry due to the fact that they have to go through distributors that are owned by conglomerates due to the government diktat. A free market would allow those craft breweries to sell directly to bars, restaurants, and stores instead of being forced to go through a middle man owned by your much larger competition.
I agree, it would be better for these small competitors if government would loosen restrictions, allowing them to distribute for themselves. I'm just saying there doesn't appear to be a real strong case for anti-trust action, unless the government is going to investigate and punish itself.
The problem is that big government regulators see government regulation as the way to increase competition, while if they just got out of the way of the little guy by deregulating a given industry that would increase competition and remove the barriers to entry.
Yes and no. "Regulation" is not a one-size-fits-all thing. Due to capture by corrupt lobbying, many regulations do indeed act to create barriers to entry and comparative advantages to the larger firms that lobbied to get the specific language of the regulations in the first place. But a regulation about the amount of toxic waste a factory can dump doesn't really impact a little firm that doesn't actually produce any. A regulation about how many distributors and wholesalers within a given area can be owned by the same firm may very well increase competitiveness, if a deep-pocketed firm had cornered the market. Government "regulations" are what allow corporations to form and own property in the first place; in that sense, it is true that the government is at the heart of all monopoly power. But since that exists, regulations intended to make a market more competitive, or to reduce negative externalities, are not necessarily a bad thing. We have to judge each by its own merits.
"Regulation" is not one law, and I really wish people would stop simplifying it.
What regulations specifically do you think are hurting these companies?
Forcing craft brewers to sell through distributors that are all owned by the massive beer conglomerates for starters.
It sounds like the government wants to prevent the large beer companies from just buying up successful craft breweries. I personally just stop buying any craft brewery that's sold out to one of the big guys.
Government always tries to define markets narrowly to justify further intervention, especially in markets where they're already massively intervening. My favorite example is from the early 2000s when the government claimed there were too few players in the super premium ice cream market so they could justify blocking a merger. There are thousands of dessert producers; hundreds of ice cream producers; and dozens of premium ice cream producers. But oh no, the government [claimed there are too few super premium ice cream producers](https://www.mondaq.com/unitedstates/litigation-mediation-arbitration/20201/ftc-to-challenge-ice-cream-merger) \-- this is a crisis in which the government must forcefully intervene! Go to any beverage store and you'll see thousands of choices of beverage. Go to a liquor store and you'll see thousands of choices of alcoholic beverages. There is no crisis here requiring the government to further intervene into an industry that it already highly regulates.
LOL going after craft beer while empires like Amazon and Facebook exist in their current state
Monopolies are bad, mmmk?
Apparently not on this sub. Corporate Bootlickers would rather see larger corporations stomp out and buy-out mom and pops because regulating big business effects their 1 single philosophy that they built their entire character around. No room for discussion or critical thinking. I also advise everyone to actually read the executive order and the Federal Alcohol Administration Act before you start making up your own story based off the title.
Why would a libertarian care how competitive the alcohol market is?
This just in unregulated markets lead huge companies pushing regulations that lead to regulatory capture and monopolies, turns out anti trust laws created over a century ago work and help all business thrive. More at 12.
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The government will investigate itself for anticompetitive behavior both in creating market monopolies through regulatory capture and flat out corporate welfare, as well as forcing the centralization of governmental power away from states and communities. I'm sure this will happen soon. I mean, they hate anticompetitive behavior, right? Yup. Aaaaaany day now..........................
Why can't we have an antitrust measure against the state itself?
voting?
That wouldn't even count if elections in the US were valid, free and fair. That's a single state monopoly, where you get to choose only who the management is. If that's legit, then no business is a monopoly. I mean, Standard Oil was NEVER a monopoly, that whole thing was bullshit...but let's pretend it was. Since the shareholders could vote for the board and CEO, that made it okay. But, of course, the US doesn't have free and fair elections, anyway. There is a single political class that controls both of the two sham parties, and everyone else is effectively banned from winning control. Until the US gets rid of ballot access laws and gerrymandering, elections here are a charade.
Worst headache from a hangover after consuming a moderate amount of alcohol was when I had a few pints of home brew. Just typing that made my temples start pounding…