It’s Time to Modernize Alcohol Laws
May 25, 2016
Bethany Dame, Vice President, Client Relations, and Georgina Malloy, Senior Associate, Client Relations
As originally seen in Beverage World.
In 1933, the construction of the Golden Gate Bridge commenced, the price for a gallon of gas was only 10 cents, Larry King was just a baby, and President Roosevelt uttered his famous words: “The only thing we have to fear is fear itself.” 1933 was also the year that the Eighteenth Amendment was repealed, supposedly ending the Prohibition era.
The 21st Amendment handed the responsibilities of alcohol regulation over to states and localities, yet there are still countless outdated, Prohibition-era laws in place. Only 53 of Texas’ 254 counties are “wet,” happy hour is outlawed in Massachusetts, blue laws restricting Sunday sales still reign supreme in 12 states, and in a whopping 17 states the government has a monopoly on liquor sales.
Not only are these laws archaic, they have real implications for jobs, consumers, and the states as a whole. States, which were constitutionally delegated this power, need to understand that consumers have the right to make their own choices and it’s with their buying power that tax revenue, jobs, and businesses are kept afloat.
The U.S. alcoholic beverage industry accounts for over 4.3 million jobs, is responsible for over $455.7 billion in economic activity, and generates almost $47 billion in state and local taxes. The distilled spirits industry alone accounted for $23 billion in supplier sales and over $20 billion in tax revenue for all levels of government in 2014, making the liquor business a huge driver for the consumer products market and U.S. jobs. State politicians should recognize the importance of the industry and know that by lifting blue laws and privatizing the industry where controls exist, they can create more jobs and economic growth in their districts.
With both genders in the workforce and more spending power seen from the millennial generation, shopping habits have changed since many of the liquor laws were enacted. Shoppers spend 21 percent more on Sundays than on any other day of the week and are more likely to make impulse purchases on this day—making Sundays more profitable than ever. Blue laws and dry counties do more than simply close a particular type of store on a particular day; they literally drive profits, jobs, and revenue to other towns, cities, and states across border lines. Control states are arguably even more problematic as these state-run monopolies limit the power of the free market; there is no competitive pricing, a limited choice and availability of product, and in many cases, little convenience to the consumer. When state politicians limit consumer choice, they limit their tax revenue, they limit the profitability of their small businesses, and they limit their economic growth.
Updating these laws may also do the states themselves some good. Washington State, for example, saw an increase of over 18 percent in revenue collected from liquor sales after they privatized this sector in 2012, and after Connecticut lifted restrictions on Sunday alcohol sales, they saw a $1.3 million surge in alcohol excise taxes. By letting go of the reigns and allowing the free market to play out, the states can be among the biggest benefactors of modernized liquor laws.
Across the country, state politicians need to modernize their approach to alcohol sales in order to cater to their voting consumers. The message for consumers, beverage companies and others to make to state capitols is clear: reduce state controls, reform blue laws, and repeal redundant prohibition era policies.
The year is 2016. Gas costs $2.23 per gallon, the Golden Gate Bridge has celebrated its 75th anniversary, and Larry King has retired from CNN’s longest running program. It’s time to retire those old blue state laws, too.