Wine Fine:The price of drink

Reason ^ | 8/1/2002 | Mike Lynch

[WindMinstrel]

A fed-up consumer calls it "socialism." A fed-up retailer calls it "state-sponsored gouging." They’re referring to an Ohio law that requires vintners, distributors, and retailers to jack up the price of a bottle of wine a total of 135 percent before it hits the shelf. As a result, wine costs up to 50 percent more in Ohio than in other states, translating into $100 million a year that Buckeye State residents could spend on something else.

"I don’t know how this could possibly benefit the public," Tom Jackson, president and chief executive officer of the Ohio Grocers Association, told the Cleveland Plain Dealer, which documented the stupidity of the state’s wine control regime in early March. The paper claimed Ohio is the worst among 17 states that regulate the price at which wine is sold.

It may be the worst, but all 50 states have a strictly enforced three-tier regime to regulate the sale of alcohol. Vintners must sell to wholesalers, wholesalers to retailers, and retailers to the public. Twenty states allow vintners to sell directly to consumers, through either mail order or the Internet. Not one state allows small vintners to bypass the first middlemen and sell directly to retailers.

The protectionist regimes are generally safe in state legislatures, but they are coming under increasing attack through the courts and the Internet. The Institute for Justice, a Washington, D.C.-based nonprofit legal group, is challenging a New York law that prevents direct wine sales from other states. Wine lovers can also take matters into their own hands. In Ohio, for example, wine enthusiasts buy direct from out-of-state stores. The law requires them to register these purchases and pay the markup. But as The Plain Dealer notes, "many bypass that step."

[WindMinstrel]

does anyone know how laws like this came about? It is from the end of Prohibition, or just political cronyism? I'm irked that I can't buy wines online because I live in CT. Doesn't quite make sense to me.

[Bikers4Bush]

They regulate the price of beer and booze as well.

[Still Thinking]

Might it be possible to get around this by the vintners charging some sort of "service fee", and lowering the bottle price to a dime, so that the minimum markup is calculated on the dime, rather than the net per bottle wholesale cost? Maybe they could call it a club, with the membership dues fixed and the bottle price real low. The Costco of wine.

[balrog666]

does anyone know how laws like this came about? It is from the end of Prohibition, or just political cronyism? I'm irked that I can't buy wines online because I live in CT. Doesn't quite make sense to me.

I had the exact same reaction. Who benefits by such laws?

[steve50]

I thought the price of my Mad Dog 20/20 was way too high here in Ohio

[WhiteGuy]

Sad

If we could just elect some republicans they'd fix all this....

Oh yeah, never mind.

[SamAdams76]

does anyone know how laws like this came about? It is from the end of Prohibition, or just political cronyism? I'm irked that I can't buy wines online because I live in CT. Doesn't quite make sense to me.

It's brutal out there if you are a wine-lover. I would probably be much more into wine myself if it wasn't so difficult to get fine wine at a reasonable price. But the hodge-podge of various laws and regulations out there make it difficult for all but the very rich to build a decent wine cellar.

In order to understand how all of this took place, you need to understand that Prohibition was never really repealed in this country. When the Eighteenth Amendment was overturned in 1933 (or was it 1932?) by the Twenty-first Amendment, it only affected federal statutes regarding the sale, manufacture and transportation of alcoholic beverages. States and counties were still free to set their own laws.

Most of these states and counties, rather than repealing their Prohibition laws outright (or keeping them in place), used it as an opportunity to tightly control the sale of alcoholic beverages (and maximizing their tax revenues) by erecting a complex set of laws and regulations that make it all but impossible for private business owners to get in the business without paying extravagant licensing fees. All under the guise of "public safety", of course.

[eno_]

Beer distributorships are also a cesspool of political favoritism and race politics (Yo! Roscoe! You listenin?). As I enjoy pointing out to the Drug Warriors, the corruption in the alchohol business comes from the remaining bluenose laws that are supposed to protect us from demon rum's bad influences. Simply decriminalzing pot without a regulatory framework is likely to work best, and beer and wine laws could be minimized further, all to the benefit of society. This issue just happens to put a value to that benefit.

[Roscoe]

Beer distributorships are also a cesspool of political favoritism and race politics

Your obsession with race is showing again.

[eno_]

My obsession? Rosoce here is about to give us an object lesson: He is a Drug Warrior who will call anyone who thinks the way Budweiser and others hand out distributorships based on skin color (and other corrupt and/or racist practices) is themselves racist. THAT's how much is at stake in the current corrupt system of alcohol distribution laws. They are a legally enshrined racial shakedown in urban areas. And where it isn't race politics at work, distributorships are simply a way of setting up sham businesses as a political payoff, and a hidden tax on Joe Sixpack.

[Roscoe]

My obsession?

Your racist bigotry.

[balrog666]

Your racist bigotry.

Why is it racist bigotry to speak the truth about beer distributorships?

[aShepard]

Here in Rhode Island it certainly is a cesspool. Spirit retailers are only allowed to own one store, so the cartel has Mr. owning one, Mrs. owning another, Son has another, and Daughter another, etc., so about three or four well connected families own the state spirit retailing.

Then at the distributor level, only one distributor for each brand is allowed to distribute statewide. So, we have three distributors, but surprisingly they all share the same address, billing system, and family ownership.

Then, retailers have not been allowed to advertise, so there's no vehicle to compare prices amongst the differing family cartels.

Our sports club, since we have a dram license, is required to buy from the distributor, but the distributor price is higher than buying from the retailer, as the retail cartels have "buying power" and influence with the distributor, thus getting "quantity" considerations.

But then again, everything about Rhode Island is corrupt, and the RAT politicians control everything, in concert with the Italian underworld.

[general_re]

Why is it racist bigotry to speak the truth about beer distributorships?

I guess this is your answer...

[Roscoe]

The sound of your evidence?

[general_re]

I have no opinion on the subject; however, it seems like a reasonable question. Why is it racist bigotry to point out that there are racial preferences in the alcohol industry? Assuming, of course, that it is true...

[Roscoe]

I have no opinion on the subject; however, it seems like a reasonable question.

Reasonable? It assumes as fact that which is not in evidence.

[Roscoe]

Yo! Roscoe! You listenin? -- Eno_

What's that crap?

[general_re]

Hence my disclaimer - "assuming it is true". Is it your contention that it is, in fact, not true, or merely that it is not proven to be true?