
Rum Deal: America’s booze laws are terrible - jseliger
http://www.slate.com/articles/business/moneybox/2014/06/america_s_booze_laws_worse_than_you_thought.html
======
twic
Okay, what the _heck_ is with this business of secondary markets for licenses
in the US? You can _sell_ a liquor license? You can _sell_ a taxi license (aka
medallion)? Why? How does treating licenses as property make any legal sense,
or serve any public good?

In the UK, if you want to sell booze from your shop, you write to the council
and apply for a license. They check you and your shop out, and if you seem
okay, they grant it. If you want to drive a taxi around your town, you write
to the council and apply for a license. They check you and your car out, and
if you seem okay, they grant it. This seems really simple and, frankly,
natural. It's how all sorts of licenses work in the private sector too - think
about copyright licenses, tenancies, etc. How on earth do you get from there
to licenses being a kind of property?

~~~
rayiner
You make a license trade-able when you care about limiting the supply, but you
don't care who gets it. The purpose of a taxi medallion is to limit the total
number of taxis, and the purpose of a liquor license is to limit the number of
establishments that sell liquor.[1] But the government doesn't care who has
the license. Making it trade-able ensures that the license goes to the person
or organization that values it most highly (Coase Theorem:
[http://en.wikipedia.org/wiki/Coase_theorem](http://en.wikipedia.org/wiki/Coase_theorem)).

[1] These purposes aren't, on their face, unreasonable. Taxis generate
undesirable congestion, and establishments that serve liquor tend to create
undesirable drunk people. If you don't believe me, take a walk through
Wrigleyville in Chicago on a Friday night, where you can see an endless parade
of taxis picking up an endless parade of drunk students.

~~~
typicalrunt
_take a walk through Wrigleyville in Chicago on a Friday night, where you can
see an endless parade of taxis picking up an endless parade of drunk
students._

But isn't this supply meeting demand? If there were too many taxis, wouldn't
the supply eventually cull itself when nobody can make enough money?

~~~
tptacek
The subtext behind an invocation of Wrigleyville is that drunk bar clientele
from outside the area makes it difficult to live in. Wrigleyville is a running
joke among people who live on the north side of Chicago.

~~~
eli_gottlieb
And now I suddenly feel the need to stand up on behalf of people four years
younger than myself and say: drunk college douchebags are people, too. They
have equal rights and an equal stake in governance, too.

~~~
danudey
Sure, but the issue in this case isn't about rights or governance, it's about
local issues caused by non-local individuals. Vancouver has a similar issue,
where the drinking/clubbing/partying district, Granville Street in the heart
of Vancouver's downtown, is a huge destination for partygoers from all over
the region; not just Vancouver, but outlying cities and suburbs as well; a
city of around 600k has to take on the responsibility of hosting the drunks,
clubgoers, partiers, concertgoers, etc. of a region of 2.8m people, and many
of those party people live and work outside of the city, pay taxes outside of
the city, pay rent outside of the city, and only come downtown to party.

That results in an increased cost of policing the area (since all drinking and
clubbing establishments are forced together), the increased cost of cleaning
(everything from garbage and smashed bottles to a surprising amount of vomit),
increased regulation, transportation congestion, medical care, etc.

It also results in a neighbourhood which goes from a mostly pedestrian mall-
esque area full of shops and boutiques to a shitshow where you might get
punched for no reason (as happened to a friend's boyfriend as they were
walking home from the movie theatre; shattered his jaw, which had to be wired
shut).

The problem isn't necessarily 'outsiders are bad', but rather that these
people come downtown, drink, have a good time (or a bad time), but feel no
responsibility for the area. They don't have to walk through it after a bad
night to get to work and see the catastrophe they caused, so they may never
realize the social and economic impact of bad behaviour. If it were their
mailbox kicked open or their doorstep puked on or their neighbour
hospitalized, it might encourage more restraint, or at least more
consideration, but unfortunately that's not usually the case.

I think that's generally the problem with the 'drinking district' in a lot of
cities; people from everywhere _but_ there go there to party and have fun, and
if they don't, they cause problems and then head on home, lost in the crowd,
and probably don't even remember it the next day.

~~~
eli_gottlieb
There would be a lot fewer problems with out-of-towners throwing up in
"drinking districts" if:

1) Nightlife and fun weren't utterly concentrated into single small districts,
forcing people to commute to go out for an evening.

2) Cities and towns dealt civilly with college students instead of treating
them as pinatas.

~~~
tptacek
Nightlife isn't concentrated into small eras because of licensing. If you want
bars and nightclubs spread out through an area, you are arguing for liquor
licensing.

In neither the Vancouver example nor the Wrigleyville example is the problem
"college students".

------
IvyMike
Philip K. Howard has a new book out: The Rule of Nobody. (Note: I haven't read
it, I've just seen a few interviews and considered buying the book.)

The premise is that the fact that laws are constantly added but almost never
removed is crippling us. Also, unfair laws are almost always unfair in
someone's favor, and the groups benefiting will defend those unfair laws
tooth-and-nail, and the morass of laws becomes even more stagnant.

I think Howard is usually seen as conservative, because he's seen as anti-
regulation. I tend to think he's anti-stupid-regulation, which is a subtle but
important difference. But even if you disagree with Howard in broad strokes,
you have to admit that the alcohol laws in this country are pretty good
supporting evidence for his premise.

~~~
cobrausn
A longtime wish of mine is that every law ever written came up for review
every decade or so, providing ample opportunity to adjust and remove laws to
fit changing cultural norms. There is probably a downside to this that I'm not
seeing, not being a lawyer and all that.

~~~
hibikir
There are quite a few downsides.

The first problem is that now you have to dedicate a whole lot of work to
maintenance. Even if this was done in good faith, you'd have millions spent
just reading and rubber stamping laws. Legislatures get little done as it is
to add more work.

Then, we have the problem of getting the legislature to take this seriously.
What stops gigantic omnibus renewals that, for all intents and purposes, lead
to the same thing that we have now?

There's also the risks to partisan fighting over controversial laws. Imagine
what happens to an impasse over immigration law, or gun control. The winner,
politically, would always be the side that would be more capable of tolerating
no law at all. This is far more politically charged than just keeping whatever
was the consensus in the past.

So that proposal is only a good idea if you believe that having a harder to
govern country is something you want. Rarely a popular opinion among people
that make laws.

~~~
vacri
The legislature that unwittingly passed an honour for the 'Boston Strangler'
(used his real name, not that name) lends pretty clear evidence to the idea of
legislative rubber-stamping instead of disinterested investigation and fact-
checking.

Politicians aren't scientists, and don't operate from root causes and facts;
they operate from manipulating social factions and perceptions. If they don't
see something as important to their key social factions, it's not worth their
attention. Honour this Albert de Salvo guy? Sure, why not? Do it and let's
move on to the stuff I want to deal with.

[http://www.snopes.com/legal/desalvo.asp](http://www.snopes.com/legal/desalvo.asp)

------
jal278
The piece provides several examples of regulatory capture [1], where
concentrated efforts by private interests overcome diffuse interests of the
public for their own profit.

The problem is that while a private interest group can focus all their efforts
on one issue, the public has many diverse interests and has to be on guard
against all the possible private interest groups at all times.

[1]
[http://en.wikipedia.org/wiki/Regulatory_capture](http://en.wikipedia.org/wiki/Regulatory_capture)

~~~
endersshadow
I wonder what could be done to help fight this. Not just for alcohol, but
regulatory capture in general. Network neutrality is in the same boat. Other
than having a generic consumer advocate lobbying group, what could be done?

~~~
curun1r
Fix campaign financing laws to limit the power of money in politics. The only
reason the politicians listen to the impassioned few over the apathetic many
is because the impassioned few are willing to supply the money needed to get
reelected. Fix that, and politicians will start representing the interests of
the broadest swathe of the electorate or, _gasp_ , voting with their
conscience based on what seems like the right thing to do.

Sadly, we seem to be going the opposite direction on this at the moment.

~~~
jal278
A recent and relevant approach to addressing campaign finance is Lawrence
Lessig's MayDay [1] movement, which is sort of a SuperPAC virus (a SuperPAC to
end SuperPACs).

[1] [https://mayday.us/](https://mayday.us/)

------
lucisferre
You should try Canada's laws for a while. Some of the highest taxes on alcohol
in the world, almost no province allows drinking outside homes or licensed
establishments (so be prepared for a $300+ fine for having wine at a picnic).
All of this managed through archaic licensing systems run by bureaucratic
power-tripping morons.

~~~
Pxtl
Ontario takes it one step further, even. We have a government run monopoly on
liquor and wine sales (the LCBO) and a _non-government-run government-
protected monopoly_ on beer sales (the Beer Store).

To make that clear: the only company that is allowed to run a beer store in
Ontario is The Beer Store. The Beer Store is owned by an association of InBev
(Belgian company) and Molson/Coors (headquarters in Denver).

So Ontario has a government-protected beer retail monopoly that isn't even run
by Canadians.

We just had an election. The Beer Store issue was completely ignored by all
major parties.

~~~
yesbabyyes
In Sweden, we have a state monopoly on all alcoholic beverages, except for
bars and restaurants. We have very high taxes on liquor, not so much on beer
and wine. The monopoly is called _Systembolaget_ (The System Company). They
are among the biggest buyers of alcoholic beverages in the world, and they
have a mean assortment.

Private import is regulated, but it's way more relaxed within the EU
countries. Systembolaget will (must) import anything you want which they don't
carry, and the process is generally very convenient.

While Swedes love bashing "Bolaget", I think a lot of people are quite
satisfied - the opening hours are a little cumbersome (closing at 6-8 PM on
weekdays, 3 PM Saturdays, closed on Sundays) but IMO that's counterbalanced by
the great assortment.

We used to have a monopoly on the production of liquor as well. It was called
Vin & Sprit (Wine & Spirits) and was the company who created Absolut Vodka.
Absolut sold very well and they couldn't leave a profit (or something like
that). They put all profits into advertising instead, making Absolut a very
well known brand. The sitting administration recently sold the company to
Pernod Ricard.

~~~
bobcostas55
>and they have a mean assortment.

This is one of those ridiculous lies that Swedes like to tell themselves.
There are single stores in France and Germany with a larger assortment than
the entire beställningssortiment. Anything even slightly obscure requires
ordering from abroad, with all the crap that entails.

------
chiph
The SC mini-bottle law has an interesting history. It was originally promoted
by the Baptists to prevent alcoholism by limiting how much you could get in
your glass (open-pour became illegal) The waiter or bartender had to crack the
seal on the mini-bottle in front of you and pour the entire contents into your
glass. No more, no less.

This quirk in the law caused an unintended side-effect. Mixed drinks became
very popular because now your Manhattan had quite a bit of alcohol in it -- a
full mini bottle each of whiskey and vermouth.

~~~
boobsbr
> to prevent alcoholism by limiting how much you could get in your glass

because people couldn't possibly concieve the idea of drinking more than one
mini bottle... /s

I really can't understand this kind of thought process.

------
lvh
As a (western) European, these laws strike me as completely unnecessary and
obviously damaging. The union's ad (page 2) makes no sense at all. Kids here
aren't dying by the bunch, and I'm pretty sure I can buy all kinds of booze
(from mixed fizzy drinks to beer and wine to hard liquor to everclear) in any
arbitrary convenience store...

~~~
endersshadow
_Sigh._

Yes, yes, we know. All of the laws, customs, and cultural traditions in
western Europe are much more rational/intelligent/better/whatever than those
in America.

The real story, as usual, turns out to be fairly complex. Americans have a
very odd and unique history with alcohol. Most notably was the temperance
movement [1], which really started all of this hullabaloo. This caused an
amendment to our Constitution...something tough to do and even tougher to
undo. And yet, eleven years later, it was repealed (thankfully).

But, and here's the big but: To temper the temperance movement (which, by the
way, had proven considerable political power), there were these crazy laws
that were enacted to limit alcohol buying. The predecessor to the ATF was born
[2]. And things like the 3-tier system were created, along with all sorts of
bans on homebrewing and whatnot.

Essentially all of the regulations on alcohol have their roots in either the
temperance movement or the anti-drunk driving movement (i.e.-MADD), which is a
neo-temperance movement. Most of them were political concessions. Anymore,
folks have profited tremendously off of artificial supply limitations, and
they seek to keep those limitations in place by lobbying (quite effectively)
against repeal or reform.

[1]:
[https://en.wikipedia.org/wiki/Temperance_movement_in_the_Uni...](https://en.wikipedia.org/wiki/Temperance_movement_in_the_United_States)

[2]:
[https://en.wikipedia.org/wiki/Bureau_of_Alcohol,_Tobacco,_Fi...](https://en.wikipedia.org/wiki/Bureau_of_Alcohol,_Tobacco,_Firearms_and_Explosives#History)

~~~
dalke
_Sigh_. Yes, yes, we know the US is special. So is everyone else. ;)

The temperance movement was not restricted to the US. The Swedish temperance
movement started in the early 1800s, and gained a lot of strength with the
starting of IOGT in the 1880s. This latter growth was strongly influenced by
the Good Templar movement in the US and Canada. The peak was likely the
Swedish prohibition referendum in 1922, where 51% of the voters voted against
prohibition. (There have only been six referendums; others include "join the
EU?" and "adopt the Euro?")

Instead, Sweden moved to a quota system - the Bratt system - first for hard
alcohol and then for all the lowest alcohol drinks. While the quota system
disappeared in the mid-1950s, the government still has a monopoly, excepting
through bars and restaurants.

While on the other hand, Iceland had prohibition from 1915 until (in some form
or other) 1989. That ending is still celebrated as "Beer Day", because until
then the Icelandic temperance movement had successfully argued that strong
beer, being cheaper than hard liquor or wine, would cause more depravity so
should not be sold. People ended up mixing legal, weak beer with hard liquor
to make an ersatz strong beer. Prohibition of that mix finally tilted the
scales to end prohibition.

Norway had prohibition from 1916 to 1927, again, from the same temperance
movement that was strong in the US.

~~~
endersshadow
I'm quite aware of the global temperance movement. However, you've missed my
point completely. My _sigh_ was because every time somebody brings up
something in the US that needs to be changed or reformed, you can bet that
some European will come in and say, "As a European, I'm shocked this is like
this!" As if we all got in a room and decided that whatever the thing is was
the right thing to do, and it all sounded like a good idea at the time. In
reality, these things, especially laws, go through complex histories,
compromises, concessions, and interests. I gave an overly brief history of the
alcohol laws in the US, or at least their influences. Just to give a _little_
context.

In reality, this discussion should be around regulatory capture. But that's
too hard, so instead, we get into a Europe vs US pissing match. It's stupid.
It's foolish. So, instead of discussing how to better fight regulatory
capture, we just try to show off how special we are. I say again: _sigh_.

~~~
alexeisadeski3
The fact that Europe doesn't have these regulations yet the sky hasn't fallen
is in fact relevant to the discussion, is it not?

Just like when one looks at the much maligned US gun laws: Washington State
has a similar murder rate to that of British Columbia, thus the gun laws
probably don't have much impact on murder rates.

~~~
endersshadow
No, it's not. And it saddens me that you think it is. This is an issue of
regulatory capture, not "Should we have these laws." The entire article is
about regulatory capture, and how special interest groups are able to
effectively block changes to these laws. The fact that Europe (or at least
some of Europe) doesn't have these laws is completely irrelevant.

------
LancerSykera
"It is still more revolting if the grounds upon which it was laid down have
vanished long since"

I'm surprised that the author, being a current Pennsylvanian, didn't mention
the Johnstown Flood Tax. Despite that particular flood having occurred all the
way back in 1936, we're _still_ paying the tax on liquor.

------
rdmcfee
In addition to having similar liquor license quotas, British Columbians pay a
markup of 123% for wine and 170% for spirits. Our provincial liquor board
generates $1.2B per year from a population of only 4.5 million people. There
are different dynamics here as we have public health insurance. Liquor and
tobacco sin taxes are a form of pre-payment on future healthcare expenses of
heavy consumers.

~~~
MAGZine
Although it's all just silly because in BC you still pay for health insurance
anyhow through MSP.

BC should really take a note from Saskatchewan or Alberta. Paying for health
coverage in this country is an atrocity, especially with the high
liquor/tabacco taxes.

------
mhurron
I love Blue Laws and States that dictate what can be sold in State run liquor
stores.

No no, really, I have exactly the same taste as some random guy in the state
capital.

~~~
robflynn
When I lived in Columbia, SC, we couldn't buy anything on Sunday mornings
before noon. There were a few exceptions, mostly stuff like food and medicine.
I tried to buy a broom and some cleaning supplies at 11am and every store that
I went to told me to come back in an hour.

I felt like I was being punished for not being a church goer. It was an odd
experience.

~~~
e40
_I felt like I was being punished for not being a church goer_

That's exactly it, but it's a little odd the stores were open to tell you to
come back in an hour.

~~~
readstoomuch
In the UK, a common loophole for extending "Sunday trading" laws is that,
while they can't exchange money for goods, they can let you in the store and
collect the things you want to buy so you'll be ready for "opening" and can go
straight to checkout.

~~~
robflynn
That was partially it. The other part was the stores that were open during the
prohibited times usually sold allowed items also (medicine, food, diapers,
etc.)

As far as I know, the law has been repealed. Before I moved away I saw them
implement Sunday beer and wine sales (still no sunday liquor sales) and do not
remember having difficulty buying the previously restricted items on Sunday.

It was weird entering a Wal-Mart (or other large store) and seeing a large
section of items roped off.

------
clarkmoody
If it's legal to build a _firearm_ [1] for personal use, then it should
probably be legal to distill spirits at home [2], though I don't advocate
doing both at the same time!

[1]: [https://www.atf.gov/firearms/faq/firearms-
technology.html#co...](https://www.atf.gov/firearms/faq/firearms-
technology.html#commercial-parts-assembly)

[2]:
[http://www.ttb.gov/faqs/genalcohol.shtml](http://www.ttb.gov/faqs/genalcohol.shtml)

------
danbmil99
Same arguments can be used against rent control. In NYC, loft leases in newly
trendy nabes can garner up to $5M in "key money". The rent regs are nearly
impossible to phase out, because both landlords and some renters benefit by
them, though arguably they hurt the market as a whole and are patently unfair
to first-time residents.

Regulation of commerce always risks unintended (though often forseeable)
consequences.

------
sophacles
It's even worse than that... I live in Illinois, a state where there are not
statewide quotas... however:

The cities have the ability to add extra licensure requirements, so quotas can
and do exist at the city level. Further, there are strange rules about entry
to taverns - for example age of entry need not be legal drinking age which
differ by city. There are also city or even smaller administrative district
rule over what can be sold, pricing rules (e.g. near the college campus there
is a rule about the minimum price of a drink special that doesn't apply to a
lot of other parts of town) and so on.

~~~
verboten
Regarding the age of entry, I recently walked past a bar in Chicago with a
posted minimum age of 23. This struck me as odd (and somewhat offensive). I
did a few searches, but had trouble locating any relevant information. Do you
happen to know if the legislation provides insight into this sort of practice?

~~~
kgermino
I know of quite a few places in Chicago with a mid-20's minimum age. To my
knowledge it has nothing to do with any legal requirements but is based on the
idea that slightly older people are less rowdy/better able to handle their
drinks.

When I was 21/22 I rarely had a problem getting passed the bouncers in places
with the higher age limits because "you don't look like you're going to do
anything stupid"

~~~
verboten
Legality aside, because I don't doubt it is legal, something about the
deliberate act of posting an age makes me deeply uncomfortable.

What I don't quite understand is they can turn away anyone for any [non-
protected] reason already. What could be the thought process behind posting
this? Especially when the establishment is unlikely to enforce it, as you
noted.

As an establishment, feel free to turn away a large, intoxicated group.
Similarly, it is your right and responsibility to avoid over-serving. And
furthermore, you may choose to establish whatever ambiance you choose through
your decor, music, lighting, and even pricing. Between these things, you can
maintain the atmosphere and attract the customer base you desire.

~~~
kgermino
I think it just makes things easier. Sure people over 25 are still capable of
causing problems, but I’d bet they are much less likely to be trouble and much
more likely to politely leave when told they are. It also makes things much
easier at the door. If a group of college kids decide to show up one night
it’s much easier to say “can’t let you in, too young [and I don’t make the
rules]” than “won’t let you in, I don’t want to have to kick you out.” It lets
the bouncer deflect the decision and appeal to an authority that’s not in the
conversation.

------
Shivetya
Liquor laws.... cigarette laws (who can sell/etc.... and even auto sales.

Heavily regulated industries abound, those are three very big ones whose taxes
fund a lot of services but more importantly whose political donations fund
even more protection.

In Georgia there was a big stink about restaurants storing customer alcohol,
seems the locals took offense and were confiscating private alcohol because of
lack of tax stamps.

If people ever thought there were not enough taxes they never bothered to add
them all up. Even taxes, fees, and whatnot, that do not hit you directly get
you in the end

------
gadders
I remember trying to buy more than two 40oz bottles of malt liquor when I was
in the USA. It made me laugh as it's only about as strong as Carlsberg Special
Brew, and my Nan drinks that.

~~~
HeyLaughingBoy
So...

Are you saying you weren't allowed to? If so, why not? You can walk into any
random liquor store that I'm aware of and buy gallons of beer or hard liquor
if you want to

~~~
gadders
I was not allowed to buy more than two. This would have been in either Jersey,
Maryland, Delaware or Pennsylvania. I am going back 20 years or so.

------
jqm
"Some argue that home distilling is more dangerous than home brewing, but I
don’t buy that."

I buy it. In fact, I'm pretty certain of it.

But otherwise, good article. I'm continually frustrated when I try to buy beer
on Sunday and they don't allow Sunday sales in my town. Of course, the two
stores directly outside the city limits do pretty well from the law but I
don't know that it accomplishes much else. Except maybe promoting drunk
driving.

------
ljf
For a capitalist and (relative to most of Western Europe) a centre/right
country, the US sure has a lot of anti-business laws.

------
sscalia
This article doesn't even bring up ABC (alcohol boards) who's sole purpose is
to waste taxpayer money on sting operations at bars and push for esoteric laws
that make it harder and harder to get a drink.

Make no mistake -- alcohol boards and organizations like MADD are simply neo-
prohibiitonist movements co-opted by religious zealots.

------
bencollier49
It made sense until he advocated home-distilling.

~~~
sejje
What's the problem with home-distilling?

~~~
gallerytungsten
Among other reasons, it's relatively easily to have a catastrophic fire.
Unlike winemaking and brewing, where your end product will be in the range of
4% to 13% ABV, which generally won't burn, you can easily distill to 150 proof
(75% ABV) with a simple pot still (or 190 proof with a column still).

150 proof is a highly flammable liquid. The vapor is flammable. If you have a
vapor leak it can ignite. The flame is invisible. In other words, it's not
something to take lightly.

In the micro distilling industry, I personally know of a half dozen fires over
the past couple years. It's easy for something to go wrong very, very quickly.

Here is an article on the most recent fire: [http://newsok.com/blast-rocks-
moore-distillery/article/49079...](http://newsok.com/blast-rocks-moore-
distillery/article/4907972)

~~~
wtbob
Yeah, catastrophic fires are an issue. And yet we've no problem with home
storage of gasoline for lawn mowers (and yes, we don't typically collect
gasoline in gaseous form over heat sources).

Catastrophic fires are also an issue with deep-frying turkeys, and in fact
with deep-frying anything.

And we do already have a well-formed body of law dealing with responsibility
for fires, damage to neighbour's homes &c.

'Someone might maybe do something wrong' isn't really a good reason for there
to be a federal ban on most behaviours. I'd be much less incensed were it at
the city or even neighbourhood level.

~~~
gallerytungsten
I mentioned fires as a point I would be concerned about.

While distilling is heavily regulated at the Federal, state, and local levels,
the Feds did not ban it due to concerns over fire safety. Rather, a chief
reason is "to protect the revenue," which, in the case of Federal excise
taxes, is substantial. ($13.50 per proof gallon; a proof gallon is 1 gallon at
50% ABV.)

The Feds don't really concern themselves with fire safety. Rather, just as you
desire, that's regulated at the state and local level. The TTB outlook is that
you have to satisfy the local and state levels as far as fire safety is
concerned.

~~~
refurb
Sort of off-topic, but back when I worked in a lab, we often needed 200 proof
ethanol that wasn't denatured with methanol or some other noxious substance.
The company I worked for had an ATF license to purchase ethanol without the
associated tax.

The cost of 1 gallon (3.79 L) of 200 proof ethanol was $8. You could dilute
this with 1 part water and end up with the equivalent of vodka for $4 per
gallon. It goes to show how much alcohol taxes are.

That being said, the 200 proof alcohol was pretty vile. It smelled like the
cheapest vodka you could buy. I remember a few gallons going missing over the
years, so somebody didn't mind the taste.

