Alcohol wholesaling laws

Laws in most states ordain an artificial niche for the business of beer and liquor wholesaling, and it gets worse:

Some states, for example, give wholesalers exclusive rights to distribute alcohol in a particular region, effectively creating government-enforced monopolies. Other states (including Arizona) have enacted “franchise termination laws,” which make it more difficult for retailers and/or producers to switch distributors once they’ve started doing business with one. Producers and/or retailers get locked in. If they feel their existing distributor is taking too much of a markup, isn’t offering a wide enough variety, or is otherwise performing poorly, there’s little they can do.

(Radley Balko, “How Your Beer Bought John McCain’s $500 Loafers”, Reason, Oct. 15). Cited in the article is an Independent Institute monograph by Glen Whitman, “Strange Brew: Alcohol and Government Monopoly“, which sounds like it’s worth reading on the subject.

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