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Thread: State laws

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  1. #1
    Taster
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    State laws

    Why is the sale of spirits regulated so strictly by the state gov. In my state a store owner must place his order with the ABC warehouse in our state capital and he might get what he orders or he might not it seems up to them who gets what. I find it hard to believe the 12+ casinos in my state follow this to stock their bars.
    Just my rant.

  2. #2
    Virtuoso
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    Re: State laws

    It's really a relic of prohibition. The 21st Amendment to the Constitution, repealing prohibition, provided that the states could regulate the importation of alcohol. So now the US has 50 different sets of laws on alcohol, some of which are quite bizarre.

    Also, I don't know much about Mississippi's casinos, but if they are on Indian reservations, as many casinos are, then they are probably not subject to state liquor laws.

  3. #3

    Re: State laws

    Almost all states' regulations vary regarding on-premise (the drink is consumed 'in the house') vs off-premise (the customers carries out the item for consumption elsewhere). Casino (and other) bars and restaurants are subject to on-premise laws, while your liquor retailer offers off-premise sales. In most states, including here in Tennessee, one can't do business with the other. For example, bars/restaurants cannot purchase the liquor they sell by the drink from a licensed retailer, only from the wholesale distributor.
    As previously noted, the hodgepodge of state laws is the remnant of Prohibition's repeal, accomplished with the promise of per-state regulations.
    Tim

  4. #4
    Connoisseur
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    Re: State laws

    Try living in a dry county. I have to go to MO to buy liquor or usually I buy it while we are traveling. I have to be careful about the amount I have on hand or it can be considered prima facia evidence of bootlegging! You think you got problems - remember, even windows have panes.

  5. #5
    Guru
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    Re: State laws

    Quote Originally Posted by TNbourbon View Post
    ... In most states, including here in Tennessee, one can't do business with the other. For example, bars/restaurants cannot purchase the liquor they sell by the drink from a licensed retailer, only from the wholesale distributor...
    Aside from protecting the wholesale distributor from competition by setting up a protected monopoly, what was the original purpose of such a system? It sure doesn't benefit the consumer.

  6. #6
    Bourbonian of the Year 2002 and Guru
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    Re: State laws

    It was essentially a quid pro quo, you (the state) ratify the 21st Amendment (repealing Prohibition) and we'll let you regulate the sale of alcohol within your state in whatever crazy way you want.

    Note the wording of the Amendment's second part:

    2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

    The key words are "in violation of the laws thereof."

    The main reason for the three tier system is that distributors, due to their state licensing, are under direct state control. Since most producers are outside a given state, the best way to control alcohol within the state "at its source" is by controlling the distributors. If retailers could buy directly from producers, then the state would have to heavily monitor retailers, which would be daunting since there are so many of them. Distributors provide a convenient "choke point" in the chain of distribution for state regulators.

    To see why direct sales are considered so heinous, you have to go back and read the history of the pre-prohibition period. Carson covers it pretty well in his Social History of Bourbon.

  7. #7
    Bourbonian of the Year 2009 and Virtuoso
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    Re: State laws

    I recall (at least here in Texas) there was also concern that the "criminal element" would retain control of distribution of alcohol post prohibition. Obviously, the distribution was controlled by criminals during prohibition. Not only was the three tiered system installed, but cross ownership of entities involved in the three tier system was prohibited. Primarily to give the state better control and keep criminals from getting into the business.

    Apparently, a favorite scheme of the "criminals" was to make a spirits delivery to a bar/restaurant and loan the proprietor the money to pay for the delivery. When the loan didn't get paid, they would coerce the owner to do any number of things........allow prostitution and gambling in the place, sell only their whiskey or beer, etc etc. So here in Texas distributors can't sell on account. A retailer must pay on delivery when beer or spirits are delivered. I worked for Coors during college and we kept a cash safe under the seat of our delivery trucks. Most bars paid in cash. If a check ever bounced, the state could withdraw the owners permits immediately. Even large grocery stores would pay in cash for fear a check might bounce and cause them headaches with the TACB.

    Randy

  8. #8
    Bourbonian of the Year 2002 and Guru
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    Re: State laws

    Here, from the Utah ABC, is a pretty succinct rationale for state control of beverage alcohol sales. Utah is one of the nine states that take "control" to the furthest extreme by making the state sole distributor and sole retailer of distilled spirits.

    "The purpose of control is to make liquor available to those adults who choose to drink responsibly - but not to promote the sale of liquor. By keeping liquor out of the private marketplace, no economic incentives are created to maximize sales, open more liquor stores or sell to underage persons. Instead, all policy incentives to promote moderation and to enforce existing liquor laws is [sic] enhanced. "

  9. #9
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    Re: State laws

    I would Imagine in Utah the Mormons exert a fair amount of political clout. I heard it was illegal for a restaurant to display or advertise any particular brand of alcoholic beverage. In other words if you are lucky enough to dine in one of the restaurants that has a liquor license you have to specifically ask for a particular item just to see if they stock it. Gee, how convenient. I suppose displaying what you have for sale would be considered "promoting alcohol consumption".

    I intend on looking for a copy of Social History of Bourbon. It sounds very interesting.

  10. #10
    Bourbonian of the Year 2002 and Guru
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    Re: State laws

    I visited Utah during the era when distilled spirits in bars and restaurants were sold only in 50 ml airline-type mini-bottles. Utah probably is the most extreme, but not by much compared with many Southern states. We're lucky in Illinois, which is among the most enlightened in terms of beverage alcohol regulation.

    I have reviewed the on-premise rules for Utah and can't find any prohibition on brand point-of-sale advertising. Establishments are required to provide menu/price-lists "containing current prices of all mixed drinks, wine, beer, and heavy beer," so I don't think it's quite as bad as what you portray. They may very well ban brand-specific point-of-sale advertising. It certainly would be within their authority to do so.

 

 

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