Time for the state's antiquated alcohol laws to give way to the free market

January 29, 2018

 

Last week, Mississippi Attorney General Jim Hood told the press that his office and the Department of Revenue had filed suit against four winemakers that shipped wine into the state.

 

The state would've missed out on $6 dollars for every $25 bottle of wine and some of those, heaven forbid, were shipped to dry counties. The state wants the four winemakers caught in the sting to train their employees that it's against the law in Mississippi to purchase wine except through the DOR's Alcohol Beverage Control apparatus and to run disclaimers that the wine can't be shipped to the Magnolia State.

 

The attorney general is simply enforcing the law as written, but those laws need to change to embrace free market principles and reflect a changing marketplace, not outdated laws dating back from the Prohibition era.

 

After Prohibition was repealed by the passage of the 21st Amendment to the U.S. Constitution in 1933, states were free to allow the sale of alcohol again. To prevent what were considered some of the abuses of the previous alcohol sales system, Congress and the states began to institute what is now called the three-tiered system that forced producers (breweries, distilleries and wineries) to use separate distribution companies that producers weren't allowed to own to bring their products to market.

 

The fear was that bars that were exclusively supplied by a single producer as in the pre-Prohibition era and that would lead to the abuses of the saloon, where prostitution, gambling and violence were rampant.

 

In Mississippi, the state functions as the distributor for both wine and liquor, while private distributors work with out of state beer producers and the state's craft breweries. This explains why the state owns the largest warehouse in the state in Gluckstadt with space for 400,000 cases of spirits.

 

With the market in beer, wine and spirits moving to a more decentralized model with more choices and more local producers known as craft breweries and distilleries, even the state's giant warehouse is running out of space to handle all of the liquor and wine. Twenty years ago, big producers such as Anheuser Busch owned the majority of the market, but now the marketplace has expanded as people want more choices with a local flavor when they enjoy an adult beverage. 

 

In an illustration of the absurdity of state regulations, the state's four distilleries have to ship their product to Gluckstadt to be distributed statewide. 

 

While it's illegal for state residents to order wine online, it's also illegal to bring in that bottle of Chardonnay you bought on a trip to a winery or a case of beer from an out of state craft brewer. In that respect, the law has made nearly everyone a bootlegger.

 

Allowing people to bring in a bottle or two and/or a case of beer home when they go on an out-of-state vacation would be a smart step to removing most of the state's population from the rolls of lawbreakers, even if the law isn't heavily enforced.

 

The state has made progress at overhauling its antiquated laws. In 2012, a new law allowed the sale of high-gravity beer with an alcohol content of more than 5 percent with a maximum of 8 percent, which opened the door for the expansion of the state's craft brewing industry. In 2013, the state legalized home brewing and in 2017, state breweries were allowed to sell their wares on premises. 

 

More positive steps could be in the offing. This session, there is a bill that would legalize the online ordering of wine and another that would allow distilleries to sell their products to visitors on site like the craft breweries can.

 

More needs to be done. The state needs to get out of the wine and liquor distribution business and allow private distributors to pick up the slack or allow producers to distribute their own product statewide. This would allow more choices than the state's warehouse can accommodate and allow the state to eliminate the cost of maintaining a giant warehouse. Prices would go down as more choices enter the market and tax revenues would increase as choice wouldn't be limited by the size of the state's warehouse. 

 

Similarly, the state's craft brewers should be able to distribute and sell their own wares and not be required to enter into contracts with distributors working primarily for large, out-of-state brewers. It would also lead to lower prices as each step in the three-tier model adds costs for consumer.

 

It's time for our law to reflect the present reality of the marketplace, not post-Prohibition concerns that have no bearing on us today.   

 

Steve Wilson covers state and local government for the Mississippi Independent News Service. You can follow him on Facebook and on Twitter.

 

 

 

 

 

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MississippiMatters is a news blog of cooperative writers, videographers and podcasters published by  The Well Writers Guild, a 501c3 devoted to mentoring Mississippi writers and to addressing uncovered or under-covered topics.  MississippiMatters focuses on offering creative "takes" on our state's culture, ideas, events and more.