Big News Tells Big Truths About the Alcohol Industry
There are a very small number of newspapers in America that still possess a combination of great prestige and serve as the information source for such a large number of people that it becomes important when these newspapers raise an issue or take a stand. I call this category of information sources “Big News”. Sitting atop this small group of newspapers are the Wall Street Journal and the New York Times. Like them or hate them, these two daily papers remain a critical part of our information culture and society.
When either of these two institutions raise and issue, take a stand or call something into question it is important because 1) so many people will be exposed to the position they take or situation they draw attention to and 2) because their position gives them a voice of authority.
It was this reality of the news and information culture that caused me to raise my eyebrow and wear a petty smirk when I read the following last Thursday in the Wall Street Journal:
“How can you tell when a particular industry feels threatened? One telltale is when its trade group issues a report promoting how many jobs the industry in question supports. The National Beer Wholesalers Association today put out a 125-page report detailing the economic benefits of the current system that governs beer distribution in the United States – a so-callled “three-tier” system developed as part of the legal framework to repeal Prohibition.”
This dismissive take on the release of the beer wholesalers’ self-serving report and their view of the perfection of the three-tier system came under one of the more snicker-worthy headlines I’ve seen in a while: “Beer Distributors Say Yes To Middlemen”
The piece in the Journal ends with this: “The jockeying among the interests in the beer supply chain reflects many larger disputes over whether government regulation of commerce protects consumer interests, or the interests of incumbents who profit from the regulatory status quo.”
Now, this last bit might just sound like the kind of rhetorical question a right-leaning, pro-free trade newspaper would make as a matter of course. But perhaps more than any industry, the alcohol industry can be said to be saddled with regulations that harm consumers, while propping up legacy actors, or “incumbents”, as the WSJ calls the wholesalers.
The state-mandated use of middle men in the alcohol industry remains in place in so many states due to two things: inertia and political payoffs. Nothing more. That the Wall Street Journal brought attention to the reality of this system helping the dwindling number of large wholesalers while harming consumers is important.