Maybe We Should Save Money by Trimming the Liquor Control Board's Budget


The AP has an article today on the likely legislative disputes over Washington's "three-tier" system for wine and beer distribution. Under this system, breweries and wineries sell their products at a 10% mark-up to distributors, who sell at a 10% mark-up to stores. Parties in one tier are banned from having a financial stake in another. Also prohibited are quantity discounts, buying product on credit, and retailers storing product in a central warehouse. (The WSLCB says it may be willing to loosen the warehousing provision.) The system was put in place when prohibition ended and recently survived a legal challenge from Costco.

Why do we have it? Rick Garza of the Washington State Liquor Control Board tells the AP:

"The reality is those laws are set there to create a level playing

field...and those pricing regulations are there to raise the

price of alcohol to deter people from consuming too much alcohol."

This from the folks who teamed up with the legislature to give us cost/benefit analyses on opening liquor stores on Sundays, who then boldly floated a trial balloon, just to make sure that one more day of buying liquor wouldn't lead to End Times. The same folks who believe that four-foot high railings prevent the corruption of minors. The same folks who stop in your neighborhood bar to make sure that the performer on stage isn't drinking a beer. The same folks who helped Nickels, Rasmussen, and the other Seattle finger-waggers institute the completely ineffective Alcohol Impact Areas. (See also here.) Question for the WSLCB: If the three-tier pricing scheme is so effective at regulating price and deterring consumption, why does anyone need an Alcohol Impact Area to prohibit the sales of cheap, high-ABV product? (Brian Smith of the WSLCB says that the three-tier system is meant to prevent retailers from flooding the market with below-cost alcohol.)

Prohibition was a disaster, and this sort of prohibition-lite is comical. Reducing alcoholism and public nuisance is a legitimate goal--there's definitely a place for the WSLCB's education work--as is protecting microbreweries from predatory pricing. But in this game, demand rules. There will always be demand for both high-quality and high-alcohol product, so the supply will materialize, regulated or not. We might save a little money and a lot of annoyance by cutting back on nitpicking rules and bar patrols and letting someone else pay liquor store clerks.

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