LIQUOR 101—THE LEGAL CONSTRAINTS TO FREE ENTERPRISE
Let’s be clear from the start: I’m a proud liquor license holder, a general manager to be precise, who enjoys all the benefits and duties associated with the license. I don’t have a grudge or an axe to grind. On the contrary, I find the local authorities to be appropriately concerned and vigilant about what matters most: upholding the letter of the law and ensuring safe drinking in this town. What prompted me to write about this is the fact that a very high city official invited me to join a wine club that receives monthly wines from around the country. He thought that I could then sell them in my restaurant, and was shocked to hear that it would e illegal for me to do so!
But, as a citizen of this state who has some knowledge of the liquor law, I have some concerns that I’d like to share with like-minded entrepreneurs who are unaware of how misguided our legal structure remains when it comes to liquor licenses. These laws can be changed by the public, they are not handed down from Mount Sinai (except for federal laws which are). My guess is that some of these laws carry with them the residual effects of the Prohibition (1920-1933; the 18th Amendment to the US Constitution; repealed 12/5/33 with the 21st Amendment to the Constitution). The level of control, scrutiny, and constraint (on who can manufacture spirits and what licenses one must have to distribute liquor, and the conditions under which consumption of alcoholic beverages is permitted) is beyond anything that free enterprise or American capitalism would ever suspect. Let me indulge you with what are outdated laws and regulations that are reminiscent of the former dictatorship of the Soviet Union.
First, you must buy all your liquor from approved distributors only. You cannot buy wine directly from vineyards or distilleries. This means that if a certain wine or liquor isn’t sold through the accredited distributors, you are not allowed to buy it. Example, when I had a previous license at a different location the father of a bride who owned a California vineyard couldn’t ship his wine directly to the facility for his daughter’s wedding!
Second, because of the constraints on who is allowed to sell what spirits in this state, if a bar owner wants to buy a particular vodka, for example, s/he must buy it from the one distributor who is licensed to sell this particular vodka. This, therefore, gives the distributor a monopoly power to command whatever price it deems right. No competition is allowed, since other distributors don’t have the license to sell that particular vodka. Given national branding and marketing, owners who respond to their clients’ requests are bound to deal with one lucky distributor and one only. The local bar cannot shop for the “best deal” because there is only one deal in the state! Moreover, it’s illegal to buy directly from out of state distributors or producers. In case you ever try to circumvent the system, you must keep your purchase records on file and available for inspection 24/7.
Third, the buying power of a single bar or restaurant or liquor-store owner is limited. In an open market, you can increase your bargaining power if you joined other buyers and created economies-of-scale to counterweight the selling power of distributors. In our state you cannot buy together or buy from a large store that can afford to buy hundreds of cases at a time. You stand alone and have no bargaining power. As a restaurant owner, you are limited to buying $1,000 per year in emergency situations.
Fourth, you are not allowed to let your customers bring their own wine or liquor into a restaurant. Whatever the reasons for this law (probably restaurant owners’ lobbying), it’s not up to the discretion of the restaurant owner to allow this. Regardless of the historical rationale of this law, just like the “Sunday blue law” that were repealed recently, perhaps it’s time to revisit it. Wine collectors and connoisseurs should be able to bring wine from their private collections while less-affluent diners should be able to buy inexpensive wines at the liquor store and bring them into restaurants if the owner permitted it. Freedom of choice can be respected.
Fifth, restaurants cannot sell liquor as retailers and retailers cannot sell liquor as restaurants; under some circumstances liquor stores can have “tastings” and under some circumstances restaurants can let their guests leave the restaurant with an open but corked bottle of wine. Really? What if I got a great deal on a case of wine and wanted to sell some bottles to my friends and clients? I can’t, plain and simple, it’s the law!
These are just a few examples of how state liquor laws are overly restrictive and outdated. I understand that there are many interests involved and lobbying groups who have pressured legislators to vote for these laws. But as some legal thinkers have argued for decades (Hart), not all human activities should be regulated by laws: they can be left open to social conventions, moral norms, and cultural habits. As such, they would change over time and be responsive to local interests and demands. Should there be state laws about alcohol? Of course, just as there should be laws about which side of the road to drive on. We all like some commonsense regulations that prevent disasters and minimize dangerous behavior, that protect us from others and at times from ourselves. But this alone doesn’t justify silliness and hypocrisy, and here I address issues that transcend state liquor laws: what about drinking age?
We have created an untenable situation when it comes to the legal classification of adulthood: fourteen-years-olds can choose where to live in a divorce case; sixteen-years-olds can drive; eighteen-years-old can vote, join the military, smoke cigarettes, marry and have sex; twenty-one-years-old can drink; and twenty-five-years-olds can rent cars. So, adulthood is between the ages of fourteen and twenty-five…you can die protecting your country but can’t have a beer at a bar when you return as a civilian…you are rational and mature enough to vote for the president and your local representatives but you aren’t mature enough to drink…and so the confusion ensues: am I too young or too old? Am I responsible enough yet?
This inconsistency is hypocritical (my partner, Perry Sanders has a lot more to say about these issues at StoptheH.com) and we all swallow it without protest, I can see our soldiers feeling a bit hurt; I can see our voters getting confused. But what we forget along the way is the fact that sixteen-years-old adults are in fact criminalized. And when they drink and drive we are all concerned about accidents and about the police catching them without realizing that what we should be concerned with is the fact that we have raised another generation of criminals—young adults who skirt the law, evade the authorities, and thinks that it’s totally okay to do so. Why wonder when they end up cheating on their taxes or their spouses? We have trained them to cheat and evade and skirt the law…we have told them that the law makes no sense and as such it should be disobeyed. If we decided that eighteen is the magic age of adulthood and that all rights and duties of adulthood revolve around this age of maturity, we would be consistent and rational, make sense to every generation of young adults: that’s the age when you can drive and vote and join the military and marry and rent a car and drink in public.
My plea, then, is about logical consistency as an antidote to hypocrisy: make sure liquor laws make sense to us who still believe in American freedom and individual rights, in the free marketplace and the possibility that we all deserve to be treated fairly and equally, that we can pursue our dreams (of selling liquor or serving drinks at bars and restaurants) without some Big Brother watching our every move. If we turn out to be criminals and tax-evaders or cheats, then by all means prosecute us; but other than that, let us be free to sell and buy what we want and however we want to do so!
Raphael Sassower is a professor of philosophy at UCCS and the proprietor and general manager of Il Postino which has a liquor license.
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