Time for a Free Market in the Alcohol Industry

The following article by Linn and Ari Armstrong originally was published December 10 by Grand Junction Free Press.

Has Colorado’s liquor enforcement finally become so absurd that legislators will reform the laws to allow free markets? The point of Prohibition was to stop people from drinking. Now laws stemming from Prohibition will force people to buy higher-alcohol beer in restaurants and taverns.

Jessica Fender wrote up the sad story for the Denver Post. While grocery stores can sell only low-strength beer, new rules will prohibit restaurants and taverns from selling anything less than “4 percent alcohol by volume or 3.2 percent by weight.” Fender adds, “Beermakers will have to test their suds and submit an affidavit stating their alcohol content to authorities.”

Apparently, in this time of economic trouble and budget cuts, it is a pressing state priority that people get as drunk as possible at bars and that small business owners spend more resources fighting through red tape.

Unfortunately, the state does far more than control the potency of beer. Politicians ban liquor stores from opening franchises. They ban liquor stores from selling food, except for “liquor-filled candy” and “cocktail garnish in containers up to sixteen ounces.” They ban nearly all grocery stores from selling wine, liquor, and regular-strength beer; only one store in a chain can sell those products.

The state’s liquor laws make a mockery of justice and the law. They benefit some special interests at the expense of consumers, and they ensure that liquor lobbyists perpetually kiss the backsides of legislators.

Perhaps a glance at history will help put the matter in perspective. When Ari lived east of downtown Palisade back in the 1970s, that area was called “Vineland,” though it was covered in fruit trees. Where did the name come from?

In his book “The Story of Colorado Wines,” Abbot Fay writes, “By the spring of 1882 settlers were bringing fruit and grapevine stock” to the Western Slope.

ColoradoWine.com adds, “Governor George A. Crawford, who founded Grand Junction in 1881, plant[ed] sixty acres of grapes and other fruit on Rapid Creek above Palisade.”

But anti-liberty activists and politicians soon destroyed the wine industry. “The Women’s Christian Temperance Union became very active in Colorado at the beginning of the twentieth century,” Fay continues. Mesa County “went dry in 1909,” and “by 1916 the State of Colorado as a whole had adopted Prohibition.”

Fay writes, “As a result of Prohibition, many grapevines in the Grand Valley were uprooted, and the Palisade area was re-planted — mostly in peaches.” And “it took almost half a century before” farmers started growing grapes again. So that explains why, for several decades, Vineland featured practically no vines.

We are heartened that Colorado, once an early adopter of Prohibition, now blossoms with wineries and brew pubs. The Colorado Department of Agriculture reports that the number of wineries in the state has reached 100. As of 2008, the wine industry generated over $17 million in revenues and sold around 100,000 liters. Vineland is back!

For beer, the Colorado Brewers Guild reports that Colorado is home to 130 breweries, giving the state high rankings in terms of numbers of breweries and volume of beer produced.

Unfortunately, some of those producers have forgotten the history of oppression in their own industry and have turned to oppressing others. For example, earlier this year the Brewers Guild opposed a law to allow grocers to sell regular-strength beer to willing customers.

To get back to the basics, the proper purpose of government is to protect individual rights to produce and interact voluntarily with others. Colorado’s liquor laws instead violate people’s rights by restricting production and people’s ability to trade.

The government does play a legitimate role in alcohol and other industries: to ban the use of force and protect the right of consenting adults to contract freely.

The government may properly restrict the sale of certain potentially dangerous items to minors, on the grounds that minors are not mature enough to reasonably consent to the exchange. (However, we would add, once a person turns 18 and can vote, go to war, and sign contracts, that person is no longer a minor.) And, so long as the government controls the roads, part of its role must be to keep people safe from drunk drivers.

All the statutes beyond those basic functions should be repealed. The liquor enforcers should be released and allowed to seek useful employment at a real job. Working at a meaningless, socially destructive job at taxpayers’ expense must take a mental toll on those enforcers. The tax money currently wasted enforcing stupid liquor laws should be returned to those who earned it.

Colorado made a bit of progress toward free markets in allowing Sunday liquor sales. It is time to finish the job and establish consistently free markets for wine, beer, and liquor.