Alcohol Myths Persist Beyond Prohibition

In a recent article for the Mackinac Center for Public Policy, I make the case that many elements of Prohibition did not fade away after the repeal of the 18th Amendment. In his October 13 opinion piece for The Detroit News, former police chief Jerry Oliver proves my point by digging up an old alcohol myth — one that was used to force Prohibition on the nation. In short, Mr. Oliver expresses the belief that producers of alcohol only seek to have customers consume as much alcohol as possible, thereby making it necessary for the government to intervene in the name of “moderation.”

Historically, it was unscrupulous alcohol producers selling directly to consumers or in cahoots with bars to sell only their products, sometimes at artificially low prices, that fostered an environment for abusive alcohol consumption. It was these excesses that helped trigger the Prohibition backlash.

…Today, most states require producers to sell to state-licensed distributors who in turn sell to local retailers. Exceptions abound where specific states allow direct-to-consumer shipments from wineries…

Critics of this time-tested approach argue the system is antiquated, citing its roots to the last days of Prohibition. That’s like arguing the Constitution is antiquated because it was written in the 1700s.

While Chief Jerry Oliver is correct that Prohibition was a backlash against Americans’ increasing alcohol use (or at least the perception of increasing use) there is no evidence that the system of direct sales or “unscrupulous” producers were the cause of increased consumption. His claim that “tied houses” (saloons owned or operated by alcohol producers) caused people to drink more is the same old myth used by the Temperance movement to push Prohibition on the country. However, we now have a large body of historical evidence that seems to debunk this presumption. Using cirrhosis of the liver as a proxy, historians have found that drinking sharply decreased in the decade preceding Prohibition — even though tied houses still abounded. While incidences of cirrhosis declined further at the start of Prohibition, they rose again toward its end.

This myth of “unscrupulous” producers has been used to maintain the mandatory three-tier system that forces alcohol producers, like brewers, to rely on a middlemen — wholesalers — to get their products into bars, restaurants, and stores. The only real reason not to shift to a voluntary system is to protect the profits of middlemen, who wield considerable political power. A voluntary distribution system would allow small producers to skip the middleman and cut costs, resulting in lower prices for consumers.