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Monday, November 28, 2011

Is Privatizing Liquor Sales Effective

The following is a guest opinion written by Elaine Hirsh, November 28, 2011:

It is not uncommon in the American liquor industry to hear phrases like "big brother" being thrown around in reference to state controlled liquor sales.  In states where liquor has been totally privatized, and when they can sell liquor.  However, opponents of privatized liquor cite a wide range of real and perceived consequences to the notion of removing state control from the liquor industry.

The argument over the legitimacy of private v. public liquor sales is nothing new; the argument between public/private sales is covered in every Masters Degree in Economics curriculum link .  Many American states and Canadian Provinces that have switched over to private liquor regulation and sales have actually felt the sting of complaints from within the industry.  Notably in 2006 when Connect Logistics, a liquor distributor, suffered some setbacks with retailers complaining they had empty shelves and were not receiving their stocks on time.  This resulted in legal action   in drastic changes in pricing regulations.

In the United States, most states still have some laws regarding which alcoholic beverages and containers can be sold and a majority specify spirits with a high alcohol content can only be sold in liquor stores and other specific venues.  In eighteen states liquor stores can only be legally owned and operated by the state government.

For example, Idaho law limits alcohol sales to 16% ABV.  Any beverages with more than 16% ABV must be sold in a state-run liquor store.  In Mississippi,  privately owned liquor stores must have a state contract.  In Minnesota, various cities have their own laws, some allowing totally privatized liquor sales and others only allowing city-owned stores to sell liquor.

According to and independent study, Pennsylvania Governor, Thomas Corbett announced the state would realize an estimated $1.5 billion if the state were to privatize liquor sales..  The article goes on to advocate for regulation due to alcohols negative societal effects but the numbers speak for themselves.  During a time when municipal governments are running huge deficits, privatizing liquor sales could provide the boost they need to dig themselves out of an ever deeper hole.

Roughly one fourth of the US population lives in states where the government controls or has an outright monopoly on liquor sales.  Manny critics suggest this is, in fact, taking a toll on both the economy and the small businessman in states like New Hampshire, where independence and personal freedom are highly valued.  

In states like Michigan where the government is holding a monopoly on the liquor market, liquor prices are usually higher due to lack of competition, licensing fees, and alcohol taxation.  States such as Wisconsin have privatized liquor sales and clearly demonstrated it's possible to have regulated (21+) alcohol sales without the state regulating the substance.  It is understandable the powers be would want to maintain control of the alcohol market but the call for independent alcohol sales is being made loud and clear all over the United States.  

Here are some links related to the above story:

for "master's degree in economics":">master's degree in economics">Alberta Liquor and Gaming Commission


  1. It is time for the legislature to phase out the State Liquor stores and turn it over to private buisnesses with restrictions on where in the store it could be sold. If the upcoming legislature doesn't act a statwide ballot would be the next step. That would settle it one way or the other for a long time

  2. Through a fog the above post and links seem to make the point that with private ownership of liquor stores, control can be maintained at a lower cost/increased revenue to the government. In Idaho's case the control objective seems to me to be a little muddy. For example promoting SW Idaho,s Wine Region and tasting rooms etc, and selling beer and wine literally everywhere, but selling distilled spirits in State liquor stores, except in private authorized stores in smaller towns where the state wouldn't be able to operate them profitably. A change from our present system could be justified but the discussion is going to be very boring unless an overall policy is addressed and a method of evaluation determined. Maybe the point was abolutionists love very small and inconvenient state operated liquor stores and the lush wants private drive thru's everywhere especially next to churches.


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