Message From Michigan: “We Hate You, Wine Lovers”

michiganHatesThe list is already quite long but it appears that lawmakers in Michigan have one more way to screw wine lover in that state.

Representative Jim Stamas has introduced a bill that would (finally) give MI wine consumers the ability to bring a bottle of their own wine into a restaurant to consume with their meal. However, the law REQUIRES that restaurants charge diners AT LEAST a $25 corkage fee for the privilege.

AT LEAST $25.

Since when is the state in charge of setting the price of corkage? Surely such a law might say restaurants MAY change a fee. But telling them they MUST and then setting $25 as the minimum? This kind of screw-the-consumer stupidity must have a source. Of course it does. That source is the notorious Michigan Beer and Wine Wholesalers Association, the most anti-consumer, anti-business organization in the state of Michigan and among the most prolific purchasers of politicians in America.

My sources tell me that originally this association of Michigan wholesalers demanded that the minimum fee be set at $50 for a consumer to bring a bottle of wine into a restaurant and consume it. This kind of absurd demand by the Wholesalers was surely a negotiating position in order to assure that what minimum fee was placed into the bill was put in the bill in the first place and that it was relatively high and that so that the Wholesalers could look like compromisers, and still have their profits protected. They way they see it, every time a consumer enjoys their own wine in a restaurant, that’s a bottle that they sold to a restaurant not leaving the restaurant’s inventory, making room for another of their wines to be placed in the restaurant’s inventory.

But they really had no need to compromise on their demands.

It turns out that the sponsor of this corkage bill, Representative Jim Stamas, has receive thousands of dollars in “campaign contributions” from the Michigan Beer and Wine Wholesalers Association over his past few elections. In fact, during Rep. Stamas’ past three elections, the Wholesalers were his largest campaign contributors. HIS LARGEST.

But here’s the punchline concerning the proposed $25 minimum corkage fee: The Beer and Wine Wholesalers are touting it as a money saver for consumers:

“And ultimately, it may even lead to some savings for restaurant-goers:

‘It’s very hard to say what the average markup is on a bottle of wine at a restaurant because it varies, but it’s significant,’ [Mike] Lashbrook  of the Michigan Beer and Wine Wholesalers said. ‘It can often be 100 percent or more. Between a $25 uncorking fee or a markup, I’d say the markup is going to be more most of the time.”

Michigan is among the most anti-wine consumer states in the country because its lawmakers are in the grip of what is easily one of the most anti-consumer wholesaler associations in the United States. The Michigan Beer and Wine Wholesalers Association are group that worked as hard as they could to stop direct shipping in that state, with the help of lawmakers. They hare the ones who, upon learning that the ban on out-of-state wine stores shipping to Michigan consumers was overturned in the courts, proposed a law that would allow such shipments from out-of-state, but only if the wine stores used their own vehicles to deliver the wines and prohibiting the use of FedEx or UPS to ship the wine. That law was written and passed in a matter of days by lawmakers who had received thousands of dollars from the wholesalers.

The point of a law that requires a $25 minimum fee to be charged for corkage is simple and straight forward: Do what you can to prevent consumers from taking advantage of the privilege, while looking like you’ve actually granted consumers something of value. It’s cynical. But, it’s par for the course for the bought and paid for Michigan lawmakers and for the most anti-consumer group of wholesalers in America.


9 Responses

  1. Charlie Olken - October 30, 2013

    The sheer stupidity of this move is overwhelming. It will cost the Michigan Wholesalers money because less wine will be ultimately sold in Michigan.

    Look at it this way. In order to bring a bottle of wine into a restaurant, you have to purchase it first. And, in Michigan, you have to purchase it from one of their people.

    Corkage actually encourages wine consumption by keeping the costs of enjoying wine low. And it encourages wine consumption by rewarding folks who cellar a few bottles of wine for special occasions.

    I know I drink more wine when I bring a bottle to dinner because I not only consume the bottle I brought, but my wife and I also tend to buy an introductory white. With both bottles, I am under no obligation to drink the whole thing, and I have often sent the other half of a great bottle to the kitchen when I am finished with the meal.

    As to the fee for corkage, well $25 is a bit high by CA standards but not unheard of. Most mid-priced restaurants in the Bay Area are a little lower than that while a few nose in the air places (the ones I love to eat at when someone else is paying the bills) will charge more.

    Aside from the amazing notion that the Govt knows how to set corkage fees, the existence of the fee at $25 is small positive that Michiganders should now set out to change over time. And that has to be a more positive situation than no corkage of any kind allowed.

    So, if Michigan got an “F” previously on this point, I say move them up to C-.

  2. Thomas Pellechia - October 30, 2013

    If minimum wholesale pricing has been deemed unconstitutional, the govt setting a minimum price to consumers must be a constitutional violation.

  3. Joel Goldberg - October 30, 2013

    Tom, one additional point worth mentioning: the proposal would allow BYO only at restaurants that are already licensed to serve wine — which, in Michigan, excludes an awful lot of places, particularly the smaller, less-well capitalized (such as many ethnic) restaurants. In other words, you’d be able to bring in wine where you can already buy it. And not where you can’t.

  4. Marc S. - October 30, 2013

    Being a wine director in a state that doesn’t allow restaurant customers to bring wine in at all, I’m not sure which is worse. The problem is, shortsighted business owners thin this is goodfor them and support the law.

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  6. Bobby Frank - November 4, 2013

    Excellent point Joel, about this leaving out small restaurants that don’t have a liquor license. Unfortunately, we are probably a long way from getting that as a possibility. However, this $25 corkage minimum is absurd. Leave it up to the restaurant. Just came back from northern California. While some top restaurants charged up to $50 for corkage, there were a fair number in the $15 range. Some had specific nights where there was no corkage fee. Freedom of choice for restaurants to choose their fee!

    • Joel Goldberg - November 4, 2013

      Bobby, of course you’re right that obligating restaurant owners to charge $25 corkage is absurd.

      But I’m guessing that most of our state’s folks who read this blog would still jump at the chance to pay $25 to bring in their own, properly aged wines of choice instead of being forced to choose from the truncated selection of current releases at 3X markups that grace most Michigan restaurant wine lists.

      And my secret guess is that those places that (like us) find $25 mandatory corkage aburd will be able to find a way around it. For example, how about a free dessert for anyone who brings in a bottle and pays corkage?

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