On Feb. 20, Michigan Sen. Howard Walker (R-Traverse City) introduced Senate Bill 216 in an attempt to update the state’s alcohol control laws. The bill is an answer to recommendations made by the Office of Regulatory Reinvention, which was created by Gov. Rick Snyder to deal with outdated industry regulations. Walker is confident that the bill would allow Michigan businesses to thrive and keep consumers content.
“The wine, beer and spirits industries are critical to the success of Michigan’s economy,” Walker said to news outlets in an earlier interview. “These industries contribute billions of dollars annually to our economy, but antiquated regulations have stifled development. This bill will modernize our liquor code and remove these artificial barriers to growth.”
When Prohibition was repealed in 1933, it was left up to the states to determine how they would regulate the distribution of alcohol. Michigan, with the passage of the Liquor Control Act of 1998, became an alcohol control state, which meant that the state effectively could manage the distribution aspect of the state’s alcohol industry. This created a three-tier system where producers sold to distributors who then could sell to certain retail outlets. Many believe that this regulatory method is ineffective because it creates a monopoly and inhibits competition between distributors.
“The Liquor Control Act reduces supply and increases the price of liquor, beer, and wine and creates inefficiencies,” said Professor of Political Economy Gary Wolfram, who wrote a critique on Michigan’s Liquor Control Act in 2000. “To the extent that the bill removes these things, then that’s a step in the right direction.”
If passed, the bill would eliminate unnecessary licensing fees, give restaurants the opportunity to control their liquor stock without cap restraints, and allow small brewers and winemakers to ship directly to retailers.
“I think the bill would be great because I’d get to try out beers that I’ve never had before,” Hillsdale College senior Jonathan Martin said.
The bill would aim at consumers; many locally-brewed beers are not available in certain retail establishments because these places are somewhat limited in regards to which distributors they can purchase from. Senate Bill 216 would do away with this limit on distribution and permit a greater variety of beer to be available to potential purchasers.
“It would open the entire market to us,” said Mick Ritter, owner of Broad Street Downtown Market. “It would definitely be an advantage and we would not have to be going through selective distributors. The disadvantage would be that we would not have time to deal with every single brewer or every single winemaker and from that standpoint the distributors work fairly good because they handle a number of them because you’re not talking to a whole lot of people. Who knows where [the bill] may go, but less regulation usually benefits everyone.”
rthompson@hillsdale.edu
