Wine Wholesalers Insist You Were Born Yesterday

Posted by Tom Wark on May 7, 2012

Barry Nolan over at Boston Magazine makes a point that flies in the face of what many politicians will tell us:

"The business sector actually desires regulation and corruption."

Interestingly, his primary evidence for this seemingly counter-intuitive conclusion is the wine industry, and particularly the Massachusetts regulatory scheme:

"Massachusetts is one of the few states where you can’t get a special bottle of wine delivered to your house by FedEx or UPS. Some may try to tell you that this is because people are looking out for your well-being. But unless you were just born yesterday, you know it’s actually because Massachusetts’ liquor wholesalers are trying to protect their profit margins and burden their competition with regulations. They don’t want competition from out-of-state wineries. As the Globe recently pointed out, since prohibition:… 'liquor laws in Massachusetts have tilted in favor of the only group with the money and organization to shape them — the wholesalers who distribute alcohol to bars, restaurants, and package stores.' "

I would contend that those who defend protectionist regulatory schemes like the three tier system, based on the idea that we all were born yesterday, play a significant role in the cynicism and disgust that plagues our political culture today.

As the Boston Magazine article points out, it's not merely the wine industry in which smoke screens consisting of cries of "protect the public" arise from those protected by the regulations they ask for. Other industries possess similar poorly cloaked cries by the protected that their protections are good for the public. But, what I know is the wine industry…so, I'll stick to that.

For many years, wine and beer wholesalers anxiously informed lawmakers, the media and the public that if direct to consumer wine shipping were allowed, minors would actively consume more alcohol, state tax coffers would be ripped off by bootleggers, and the entire regulatory system, "that has served us so well for so long," would fall to pieces. None of this came true and those who bought into and extolled these claims now look particularly stupid.

But in all these cries about drunk children, lost taxes and a broken regulatory system, the promoters of this dystopian fantasy world never mentioned that their concern for the public good also happened to square up perfectly with their own economic interests. What do you know?

The result was that you got these really weird discussions in state committee hearings, at meetings of alcohol regulators and in the media where where the possibility that direct shipping of wine was really a potentially dangerous thing was actually discussed, when everyone knew it was not a dangerous thing. Everyone in the discussion, from wholesalers to alcohol regulators to politicians and even those that wanted to ship direct indulged in a conversation they knew was off point, rather than addressing directly what was at issue: whether it was good policy to reward campaign contributing wholesalers with the restrictions on competitive commerce, while screwing consumers, retailers and wineries.

This discussion of winery to consumer shipping is over. No one talks about the practice of winery to consumer shipping in this surreal way, with the exception those in a few states like MA. There is still silly and surreal talk about retailer to consumer shipping as that battle rages on, despite the fact that a retailer shipping wine across state lines is in no way different than a winery shipping wine over state lines to a consumer.

Today, the focus of the con artists that would replace "our own interests" with "the public interest" in discussions of alcohol regulations has turned to a doubly surreal subject matter: "Deregulation".

Recently The Center for Alcohol Policy held a sparsely attended forum in Michigan to discuss alcohol policy in that state and nationally. A number of public officials, industry representatives, researchers, lawmakers and others spent an entire day essentially discussing how important it was to hold firm in the face of "deregulation" efforts. They sat in the metaphorical circle, pointed their mouths at each other, and spewed on about how public safety would be endangered, how people would fall into abusive patterns and how states would loose significant revenue if any changes came to the three tier system. There was not a dissenting voice in the room.

The Center for Alcohol Policy is a creation of and funded entirely by…wait for it….beer wholesalers.

This is a perfect example of the kind of thing that Barry Nolan at Boston Magazine is talking about in his article when he notes that "Some may try to tell you that [they] are looking out for your well-being. But unless you were just born yesterday, you know it’s actually because…wholesalers are trying to protect their profit margins and burden their competition with regulations."

It's also an example of public policy experts and politicians and regulators playing along with the industry's nonsense because they see something in it for themselves, be it more campaign contributions, more grants for studies of England's drinking culture that are of limited value other than for propaganda purposes, or as a way to protect their positions in the alcohol regulatory establishment.

So, here's the rule you need to be aware of:

Whenever an alcohol industry person advocates a policy by saying that it is good public policy or that they are simply looking out for the public good, but don't make note of what sector of the industry the policy they are pushing will help, they are almost certainly assuming you were born yesterday.

Don't give them a pass. Point out their hypocrisy. This is particularly important if you think of yourself as a consumer since those who play the "You Were Born Yesterday" game have never taken into consideration what is best for consumers, but rather only their own bottom line. That makes them not only enemies of reason, but also enemiies of the marketplace and the consumer.