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What explains the peculiar web of regulations surrounding alcohol in America? At an AEI event on Tuesday evening, panelists discussed the current status and history of the regulation of beer, wine, and distilled spirits in America. Stephen George of Montesquieu Wines detailed his company's experiences in overcoming regulatory hurdles that prevent winemakers from selling their products directly to customers, and emphasized the increased costs this generates for consumers. Because of a patchwork of state laws, taxes, and regulation -- and a decreasing number of wine wholesalers to handle these logistics -- consumers must face restricted choices and higher prices, claimed George.
Brandon Arnold of the National Taxpayers Union explained how modern alcohol regulation began with the Reinheitsgebot, or German beer purity law. Ostensibly aimed at protecting consumers and ensuring the purity of beer, Arnold said that the law was in fact rooted in trade protectionism, price fixing, and cronyism. He related this to home brewing today and its role in America's beer renaissance.
Mixologist, blogger, and industry consultant Jacob Grier discussed the origin of America's three-tiered system of alcohol manufacture and distribution, which has been in place since the end of the Prohibition era. Grier outlined how the system protects incumbent interests and makes innovation more difficult, and highlighted America's nascent craft-distilling movement.
For centuries, the manufacture and sale of beer, wine, and spirits has been a highly profitable and highly regulated enterprise. And where profit and regulation meet, cronyism and rent-seeking frequently follow.
From moonshiners buying off politicians during the Prohibition era to liquor stores trying to ban supermarkets from selling beer today, regulation has been used to keep start-up brewers, winemakers, and distillers from manufacturing alcohol; to preserve inefficient distribution systems; and to restrict choices available to consumers. Frequently, this regulation has been used for “noble social goals” — hence the famous public choice example of "Bootleggers and Baptists."
Can markets and consumers win? Join us for a discussion of the history and future of federal and state alcohol regulation and competition, followed by a reception with beer, wine, and spirits.
If you are unable to attend, we welcome you to watch the event life on this page. Full video will be posted within 24 hours.
Brandon Arnold, National Taxpayers Union
Stephen George, Montesquieu Wines
Jacob Grier, Liquidity Preference
Timothy P. Carney, AEI
Adjournment and Reception
For more information, please contact Daniel Rothschild at firstname.lastname@example.org, 202.862.7155.
For media inquiries, please contact MediaServices@aei.org, 202.862.5829.
Brandon Arnold is the vice president of government affairs at the National Taxpayers Union. Before joining NTU, he was was director of government affairs at the Cato Institute. He has also worked in a variety of policy and communications positions in Maryland Governor Robert Ehrlich's office, the office of Rep. F. James Sensenbrenner Jr. (R-WI), Citizens for a Sound Economy, and the National Republican Senatorial Committee.
Timothy P. Carney is a visiting fellow at AEI, where he helps direct the Culture of Competition Project, examining barriers to competition in all areas of American life, from the economy to the world of ideas. Carney has over a decade of experience as a journalist covering the intersection of politics and economics. His work at AEI focuses on how to reinvigorate a competitive culture in America in which all can reap the benefits of a fair economy. Carney is the author of two books: “The Big Ripoff: How Big Business and Big Government Steal Your Money” (John Wiley & Sons, 2006) and “Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses” (Regnery Publishing, 2009).
Stephen George is vice president and general counsel at Montesquieu, a full-service wine group dedicated to making and sourcing for its clients handcrafted, unique wines from top vineyards around the world. George leads the company’s communications, marketing, and business development efforts and oversees all legal and regulatory affairs, managing licensing and compliance in over 35 states and the federal government. Prior to joining the wine industry, he worked as a civil litigator in the San Francisco office of Covington & Burling LLP. George holds an advanced certificate with distinction from the Wine & Spirits Education Trust and sits on the tasting panel for Wine & Spirits Magazine.
Jacob Grier left the world of DC think tanks for the vibrant food and drink scene in Portland, Oregon, in 2008. He now works as a freelance writer, bartender, and spirits industry consultant. He has published an introductory book of cocktail recipes, “The Cocktail Collective” (SK2R, 2010), and is working on a forthcoming book about beer cocktails. His articles on a variety of topics have appeared in The Atlantic, Reason, The Washington Post, and other publications. His current home behind the bar is Metrovino in Portland, and he writes regularly at his long-running blog Liquidity Preference (www.jacobgrier.com/blog/).