Promoting a Misunderstanding of America’s Wine Consumers
The Center for Alcohol Policy, a creation of the National Beer Wholesalers Association that works on behalf of beer wholesalers and has the interests of no one but beer wholesalers in mind, has funded the release of a new little book for state alcohol regulators: “Alcohol Beverage Control: The Basics for New State Alcohol Regulators.”
The description of the new book delivers an assertion that is not only incorrect, but in fact if believed and if pursued as the truth or as a model for understanding alcohol regulation, we will find a new generation of alcohol regulators completely misunderstanding the nature of America’s alcohol marketplace.
That assertion is this: “There is no national alcohol market. There are 50 different alcohol markets by constitutional design.”
Any understanding of alcohol regulation based on this principle will result in a regulatory regime that is decidedly anti-consumer. Not quite as important, but equally true, is that the idea there is no national marketplace for alcohol is a notion that provides a continued foundation for America’s alcohol middle men—wholesalers—to dominate and control the alcohol industry in the same way that the tied house model allowed producers to control markets pre-Prohibition and that led to the kind of corruption that inspired the move to Prohibition.
First, we know there is a national marketplace because consumers have decidedly determined by their purchasing habits that they are more than willing to explore alcohol options far beyond their state borders. They happily seek out new, hard-to-find, rare and regional bottlings of beer, wine, spirits and cider that simply don’t show up in their state stores. Just as important, the producers are more than happy, willing and able to sell their products to this increasingly important segment of consumers.
An Efficient logistics and shipping industry makes this possible as well as the expansion in access to information provided by the Internet.
Any view of alcohol regulation that promotes the notion of their being no national marketplace purposefully ignores this 21st century reality and is flawed from the get-go. However, such a view of alcohol regulation does serve to provide wholesalers with a means of controlling product distribution and retarding the growth of the American alcohol marketplace—particularly for small producers and the consumers that seek them out.
Written by Roger B. Johnson, a 38-year veteran of the Alcohol & Tobacco Enforcement Unit of the Wisconsin Department of Revenue, ” “Alcohol Beverage Control: The Basics for New State Alcohol Regulators.”, also describes the primary concerns of alcohol beverage regulation:
•Preventing Tied Houses
•Ensuring public safety by penalizing underage or over-service of alcohol beverages
•Collecting state revenue from excise taxes
•Providing Education and Training to the Industry
•Balance desires for a “free market economy” with the goal of promoting temperance
These are all legitimate and important areas of concentration and concern not only for alcohol regulators but for the industry and the public. Still, without a proper understanding of how a modern American alcohol market operates, without an appreciation for the nationalization of the alcohol beverage economy (particularly as it relates to craft and small artisan products) and without a regulatory community willing to take as their mandate something more than protecting the favored position of the middle tier then the young alcohol regulators this book is aimed at will find those whom they regulate as well as consumers demonstrating too much disdain for their work.
Tom,
Well done. I’ve appreciated the collaboration help on my Wine Politics series.
Everything about the 3 Tier system causes me to feel violated and without the prescribed follow-up kiss.
-I hate being unrighteously controlled by Big Brother.
-I do not like being artifically taxed through a system that rewards an industry by elite politicians for their personal gains (campaign contributions). Remember, McCain’s wife is a distributor of alcoholic beverages.
-If government is going to extract money surreptitiously from me as though I have the intellect of a daycare charge, I am incensed and rebel.
-Government should add value to/for the uncleaned masses when they pass laws; what is the real value when a law is passed with global reach without value? The reach ultimately is when government reach into our pockets without adding value…then it becomes theft.
if 3 Tier distribution systems are so great, will government force ALL industries to go through distributors to get product to consumers. Maybe there should be a 3 Tier system to sell Dental Floss to consumers. Mary Jane has been around for centuries and there is no 3 Tier system for this product yet it is somewhat controlled by governments-for the purpose of tax revenues.
If an entity finds it helpful to retain distributors to help get their product sold, then it should be a free choice. Today, a distributor is free to take on any client they desire and can charge that client anything they want, if the potential client refuses then they can sell–folks ,that is what most people call a monopoly.
Is the 3 Tier system in America to powerful to fail?
Steve,
Thanks for your comments. You’ve hit on one of the problems with alcohol regulations: They treat the modern world as though it is the same as 100 years ago. It of course is not. Trying to fit a square peg into a round hole will always cause friction. And the three tier system clearly does that.
Tom…
Tom,
You describe Roger B. Johnson as a 38 year veteran of the alcohol enforcement when he articulates his 5 basic reasons for alcohol regulation. Well 38 years in the regulation business should give you some sense that the man may just know of what he speaks. You yourself claim that the 5 points are all “legitimate and important areas of concern not only for alcohol regulators, but for the industry and the public.”
Now, I am not in favor of the general public paying more for goods and services than they have to, however, the 5 points listed as primary concerns of alcohol beverage regulation just happen to be the very reason the 3 tier system was created. You can stand on a soapbox all you want and rail against the system that is in place, but the fact remains that what is being regulated are products containing ethyl alcohol. Dangerous 100 years ago and still dangerous today. You seem to think that because decades have passed, that now all citizens of this Great Land and the World in general are enlightened and will all treat alcohol with a new found respect and care. The passage of time has nothing to do with abuse. There is still an urgent need for control. We see it everyday. Just because someone drinks a First Growth Bordeaux, a Grand Cru Burgundy, a 25 year old Highland Scotch, or a boutique small batch Bourbon, does not mean they cannot be abusing these products. The poor bloke who sits on a stoop in a run-down neighborhood and drinks rot-gut from a paper bag, remarkably has fellow abusers who dress in tuxedos and dine in 5 star restaurants in the name of gourmet organizations sipping Harlan Estates and Screaming Eagle until they fall off their Damask linen covered chairs. And in response to you Steve, ethyl alcohol is NOT dental floss. It is a drug, and the most popular drug used in this Country, and as such needs regulation like the 5 points articulated above offered by the Three Tier System.
Don’t get me wrong, I am not a teetotaler, I like all types of adult beverages as much as the next guy, and like I said before, I am not one who likes to see anyone pay more for a product than is necessary, but the controls that the Three Tier System provides are a minor inconvenience for an increased measure of safety for the general public.