So Who Is Being Protected By Arcane Liquor Laws?

The recent kerfuffle over the planned ownership and administration of a liquor store adjacent to a Wegman's grocery "super-store" in Columbia highlights, once again, the inanity of the legal processes surrounding liquor laws not just in Maryland, but across the nation.

The purported rationale behind the general legal principle enforced in many states--that liquor license holders may hold only one license, and/or that corporations or "chain" operations may not hold multiple bar or retail licenses--is that small businesses need "protection" from, for example, Anheuser-Busch or MillerCoors or Samuel Adams coming into an area or state and opening multiple "tied house" bars or liquor stores, using their size and distribution network to drive out competition.  In some states (such as the People's Republic of Maryland), such measures keep chain mass retailers like Safeway, Giant, Wal-Mart, World Market, Trader Joe's, Target, or Costco, or even alcohol specialists like Total Wine,  Binny's,  or Spec's from opening multiple locations in a state or region.

Folks, this is as big a national joke as the 55-mph speed limit was. 

You know how to tell someone from the Northeast in a grocery or convenience store in the South, Midwest, or Southwest?  They're scratching their heads strangely at the alcoholic-beverage section of the store, with the "Does....  Not... Compute..." brain-gear-clashing almost audible over the hum of the coolers.  We're sitting among four of only eight states in the United States that ban, or for all practical purposes ban, beer sales in supermarkets (Md., Pa., NJ, and Delaware), and among only 19 states that ban wine sales in same.

Look at ANY regulation concerning ownership of an alcohol outlet.  Somebody has found a way to circumvent it.  You get a family member to sign on as the "owner" of the second (or third or more) establishment.  You hire a resident of the jurisdiction to be a partner to satisfy residency requirements.  This is all done quite openly.  It's all "wink and nod" at the liquor board hearings.  The only one I haven't seen circumvented regionally of late is the one about ownership of a second microbrewery--a rule that bit Bare Bones hard in the posterior when they opened up a second brewpub in Cockeysville and then had to shut down the brewery in the original Ellicott City location.  (The Cockeysville brewpub was sold shortly thereafter, leaving them no brewing location at all.)

And what for?  To "protect small business" from big corporate owners.  Well, come on, if we're going to do that to the alcohol business, and it's such a noble gesture, why not extend it to, say, the grocery store business?  Or the take-out fast-food business?  Or the general store business (only one Wal-Mart or Target or 7-Eleven in the state, please)?  Or the gas station business?  Or the hardware store business, or the automobile business, or the movie theater business, or the auto parts business, or even the "dollar store" business?

For the craft beer enthusiasts, the reality is that we're perfectly fine with certain chains--DuClaw, a potential Olivers Breweries outlet chain, Dog Pub, Capitol City, Sweetwater, et al--but we bristle at too much "success" and clout (Gordon Biersch?  Hops?).  In addition, we as Americans continue to stigmatize the alcohol business, and insist on this Kabuki dance for entrepreneurs who simply want to take a successful (i.e. good) thing further.

Maryland is hardly alone in such stupidity, as our neighbors to the north--double victims of a state-run liquor-store system and a requirement that beer be sold by the case--will hasten to tell us.  Every state and providence out there has something stupid, wacky, or downright inexplicable about its alcohol regulations; it's certainly the nature of the beast.  Certainly, someone can reply with a litany of the "horrors" of what happened to the beer business in Britain after the biggest brewers dominated the market with "tied houses."  And I'm sure there's at least one reader of this blog that would be perfectly happy to see all the "big" merchants banned or shut down in favor of quaint little farmers' markets, general stores, mercantile co-ops, and whatnot.  But the United States and the free market should be about choice and liberty, not regulation, nepotism, and sleight of hand.  Note the folks objecting to the Wegman's Columbia proposal.  They're not little producers or retailers afraid of being steamrollered by big business.  They're successful businessmen in an artificially-distorted business field, afraid of competition that would force them to work harder or share their lucrative pie with others. 

Do we turn all of this into the "Wild West" of totally unregulated booze businesses?  No, that's not what I'm calling for.  But we do have to stop pretending that this regulatory balderdash does one iota towards "protecting" the consumer or small business.  Otherwise, the future belongs to whatever entrepreneur can come up with the biggest family.