Alcohol Industry Infighting Leads to Wacky and Costly Regulation

If the ban on alcohol-containing energy drinks tells us anything, it’s that American alcohol policy continues its tradition of being very wacky. If you need more examples see Enobytes: Top Ten Wackiest Wine Laws.  And not all of this dumb regulation is old. These days, it’s hard to find a public park with you can enjoy a glass of wine at a picnic, as many have recently banned this “egregious” activity.

Such anti-consumer regulations are advanced for a number of reasons. Blogger Tom Wark points out that the absence of a consumer advocacy organization has led lawmakers to simply serve special interests at the expense of consumers. Another key problem is that various parts of the alcohol industry work at odds. This situation eventually undermines the credibility of the whole industry.

For example, consider the infighting between wine, beer, and spirit producers regarding privatization of spirits and supermarket sales. As it now stands, 19 states do not allow spirit sales in supermarkets but allow supermarkets to sell beer and wine (some only allow beer in supermarkets). This simply makes life less convenient for consumers. Wine and beer lobbies don’t seem to mind discrimination against spirits probably because they think it makes them more competitive. For example, a comment to a recent post on noted one reason wine and beer industry players opposed Washington State ballot initiatives on spirits privatization (The Washington Wine Institute opposed privatization, for example): they fear losing supermarket-shelf space.

Ironically, wine and beer folks do not help themselves with such positions. They simply reinforce the idea that their very own products–which also contain alcohol–are somehow bad for consumers. That idea helps push regulation on the entire industry.  In fact, that was one factor that advanced the concept of prohibition. Richard Mendelson points out in his book From Demon to Darling: “Wine and Beer Interests proved themselves willing and eager to throw the liquor men to the drys,” he notes (pg. 46). Yet that strategy simply helped build the case for prohibition of all alcohol.

It was would wiser for wine, beer, and spirits industry players to understand the value that comes from working together to promote the image of the entire industry. Alcohol producers and retailers would benefit if they all promoted a positive image of the industry and supported market competition. The end result would be more rational and fairer regulatory policies for everyone rather than wacky and special-interest regulation.

Image credit: Joe Shlabotnik’s flickr photostream.