Last Friday, I helped to organize a “beer smash” protest against beer protectionism. I joined other speakers in making the case for free markets in beer sales. Right now Colorado grocers are legally forbidden from selling regular beer to consenting adults.
A Monday story from the Denver Daily News quoted me and another like-minded fellow:
“Competition is competition,” said John G., who wouldn’t disclose his last name. “If liquor stores can’t compete with the big bucks stores, then that’s just the nature of capitalism.”
Ari Armstrong, publisher of FreeColorado.com, is a vocal advocate of getting a version of HB 1192 on the Nov. 2010 ballot. The Web site publisher staged an event at the Capitol on Friday where he smashed bottles in protest of the grocery limits, arguing that not allowing grocery stores to sell full strength beer is “using the force of the government to harm competitors and favor certain businesses.”
“Protectionism is wrong,” he said. “What we want instead of protectionism is a free market, where merchants and customers can come together voluntarily of their own choice and associate in the way that they deem best. What we need, in a word, is liberty.”
During my brief talk, I also explained that Colorado’s beer protectionism is endorsed by “an unholy alliance of special-interest groups.” The first group is liquor stores, which stand to gain financially by legislatively damaging their competitors. The second group is (some) small brewers. The third group consists of “self-righteous moralists who think it’s their job to tell the rest of us how to live our lives.”
This newspaper line is particularly illustrative of the “Bootleggers and Baptists” sort of special-interest convergence: “[T]he Colorado Licensed Beverage Association and others, including Mothers Against Drunk Driving, said teen convenience store clerks would possibly cave to peer pressure and start sneaking full-strength beer out to their friends.”
I’ve addressed arguments about underage sales previously. Here I want to focus on the arguments of the brewers:
Brian Dunn, president of Great Divide Brewing Co., said consumers would likely have seen less variety of beer throughout Colorado as a result of House Bill 1192. He said large supermarket corporations would not stock as much variety as liquor retailers do, but that retailers would go out of business, leaving less variety on the shelves.
“One of the reasons that the beer is so good here is because the independently owned liquor stores are willing to carry a very wide variety of beer that is produced by the craft brewers,” said Dunn. “That variety will be seriously hindered if this bill passes.”
Colorado beer drinkers who favor economic liberty may want to note that Great Divide has added its name to the list of those pushing protectionism.
Dunn’s argument is ridiculous. He is basically claiming that brewers will be hurt by having more merchants to sell their beer to.
Beer protectionism has nothing to do with the success of Colorado brewers. Instead, Colorado is known for its beer for two main reasons. First, Coloradans like good beer: they demand it and buy it. Second, as I’ve mentioned, legislative changes in the 1980s allowed brewpubs to do business.
Beer Advocate notes about 1982 — just a year after the Great American Beer Festival began in Colorado: “For the first time since prohibition, a brewery is allowed to open that not only sells its’ beer at its’ own bar on premises, but serves food to boot. In Bert Grant’s Yakima Brewing and Malting Co., Inc., [in Washington] the Brew Pub is born.” Obviously, such legal changes have a lot to do with the success of Colorado’s brewing industry, while beer protectionism has nothing to do with it.
The fact is that Colorado brewers are in business today because protectionism against their industry was lifted. Now some of these same brewers hypocritically wish to impose similar protectionist policies on other merchants.
Is it true that brewers would have less of a market if grocery stores could sell beer? I grant that, while the figures put out by the liquor store industry strike me as fear-mongering, probably some liquor stores will close. But if they’re only in business because they legislatively harm their competitors, they don’t deserve to be in business. Liquor stores that offer genuine value to their customers, through better selection, better service, etc., will continue to thrive. Not only that, but many grocers will carry a large selection of craft beer.
I went to two local liquor stores yesterday. One carried four brands of Colorado beer; the other carried five. Both stores sold only a tiny fraction of available Colorado craft beers, and both stocked far more big-name and non-Colorado beer. This is typical of smaller liquor stores I’ve seen. No doubt at least some grocers would stock a larger selection of Colorado craft beer than those liquor stores stock. Larger liquor stores, on the other hand, feature a spectacular selection and would compete with grocery stores successfully on that basis.
Let us look to Arizona, where grocery stores sell beer, wine, and liquor. A search of liquor stores in Tucson hardly shows a dearth of them.
Meanwhile, an employee of the St. Mary’s Safeway in Tucson told me, “We have quite a few off brands” from “all over America,” including Sierra Nevada (California), New Belgium (Colorado), and Four Peaks (Arizona).
Protectionism artificially creates winners and losers by legislative fiat. Once that protectionism is removed, winners and losers will again be chosen by consumers on a free market. That makes for hard times for those who benefited from protectionism. But protectionism is unjust, and it harms consumers and select merchants.
Those favoring protectionism like to tell hysterical stories about what allegedly will happen once the protectionism is repealed. But the sky has not fallen in other states that lack such protectionism, and it will not fall in Colorado, either. A free market in beer sales will instead restore the right of free exchange and offer greater value to consumers.
Give us liberty in beer sales.