Monday, July 15, 2013

Don't Forget: it's not just the State Stores and the Case Law

I don't want to lose focus on privatization, because we've all got to keep letting our representatives and senators know over the summer that we want them to use the September legislative session to get this done: no linkage to the Transportation bill, no linkage to Corbett, just "linkage" to what their constituents have wanted for 40 years... We hear about "package reform," which is Legislaturese for "fixing the case law," but their idea of "package reform" is just another set of stupidly arbitrary limits on how much we can buy and where we can buy it. It's really simple: no limits on how much or how little beer we can buy in one transaction at one store. Fix it.

But there are other problems. I was reminded of one of them while I was reading this Washington Post article on how the beer scene is growing in Washington, DC. Washington beer bars have -- have always had -- a regulatory edge on their competition in Maryland and Virginia: no registration laws, no wholesaler exclusivity laws. The reporter explains how that works by comparing the two situations:
Suppose a Maryland or Virginia beer bar wants to sell a hot new release. The beer bars have to make sure it’s approved for sale in the state, call a distributor to see if it’s available in the warehouse, then arrange delivery to the bar. (This is what’s known as the three-tier system.) If a D.C. beer bar wants to bring in the same beer, it just calls the brewery or the local beer rep, orders the beer, has it delivered and pays D.C. sales tax on the purchase price of kegs or bottles. Any beer, from anywhere, can be sold here.
The article goes on to point out that enterprising retailers have driven hundreds of miles to purchase rare beers and bring them back. And...what would be so horrible about that? Well, for one thing, the Pennsylvania beer excise tax would have to be paid. It's not much, one of the lowest in the country (which means one of the lowest in the world, hallelujah), but it does have to be paid. Luckily, it's based on something very simple: volume, which means a standard table could be whipped up pretty quickly for 24-bottle 12 oz. cases, sixtel kegs, 12-bottle 22 oz. cases, and so on.

The major difference for the State? The bar would be responsible for paying that tax rather than a wholesaler, and would, presumably, be responsible for keeping a paper trail. Still...most bars would continue to buy the same old stuff from the same old wholesalers; that's where wholesalers in other retail markets make their money, off convenience and service, rather than laws that force retailers to buy from them at whatever price the wholesaler happens to set (or is allowed to set; some states have maximum markup laws).

Getting rid of beer registration would be ridiculously simple. It was obvious during the Beer Registration Raids Hearings that no one could give a straight answer on why beer registration even existed. It's likely that the reason it does is closely linked to wholesaler exclusivity; beer registration involves the brand, the producer/importer...and what wholesalers have the rights to sell that beer in the state.

So the two are linked. Well...maybe it's time to take a serious look at this anti-competitive combine of laws, and determine whether it's really serving the Commonwealth and its citizens, or if it's only serving a small number of businesses at the expense of the Commonwealth's beer drinkers.

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