BOOZE TALK: State Monopoly on Liquor Questionable, Says Mackinac Center
Advisory Committee Recommendations to Gov. Snyder Awaited
(EDITOR'S NOTE: The Mackinac Center, a non-profit 501 (c) (3) "think tank" organization in Midland, Michigan, has published the conclusions of a report on alcohol policy that may be of interest to readers of MyBayCity.com)
Why do we have to buy liquor through the State of Michigan?
Michigan's wholesale hard liquor monopoly and retail alcohol restrictions do not provide discernible public health and safety advantages, according to a policy brief released recently by the Mackinac Center for Public Policy.
With policymakers discussing reform of the state's alcohol distribution system, such regulations of the alcohol marketplace should be scrutinized, according to authors Michael LaFaive, fiscal policy director at the Mackinac Center, and Antony Davies, associate professor of economics at Duquesne University.
Governor Rick Snyder has created the Office of Regulatory Reinvention (ORR) of Michigan's government. The primary goal of the ORR is to work with the various state departments to amend duplicative, obsolete, unnecessary or unduly restrictive rules. This will lead to a regulatory environment that is simple, fair, efficient, transparent and conducive to business growth and job creation, according to the governor's office.
Governor Snyder has directed the ORR to review all existing rules and regulations. The ORR has already identified nearly 19,000 formal rules and regulations, in addition to the thousands of informal guidelines and actions that will be reviewed by the ORR. To monitor the progress of the ORR, visit its dashboard at www.michigan.gov/orr.
The only mid-Michigan member of the 21-member Alcohol Regulatory Committee is Mike Telliga, Midland, Director of Government Affairs and Special Projects, Midland Area Chamber of Commerce.
Northeastern Michigan is represented on the committee by Gerald Smith, Lewiston, Owner/stockholder: Talley's Log Cabin Bar, Inc.
Department of Licensing and Regulatory Affairs Chief Deputy Director Michael Zimmer chairs the committee, which was formed and held its first meeting last August.
"The main defense of Michigan's convoluted and monopolistic system is that it enhances public health and safety," said LaFaive. "The evidence, however, does not suggest that ending state government's hard liquor monopoly and retail density restrictions would lead to worse health and safety outcomes. Michigan consumers and businesses are experiencing higher alcohol prices and reduced availability to comply with state regulations that appear to be ineffective."
Free Republic, a Fresno, California, group, recommends: "Eliminate beer and wine distributor monopoly mandates. Strip from the Michigan Liquor Control Code the mandate that suppliers of beer and wine grant exclusive sales territories to a select group of wholesalers.
"These protectionist stipulations result in consumer dollars simply being transferred to distributors. Wholesalers provide valuable services, but supplier-wholesaler relationships should be voluntary, not coerced. The code seems rife with legal privileges accorded to millionaire monopolists. The exclusive territories mandate is unfair, unnecessary and costly to consumers."
LaFaive and Davies provide original analysis of the data and a review of existing studies. The Policy Brief examines such statistics as total alcohol-attributable deaths, binge drinking and alcohol-impaired and alcohol-involved traffic fatalities.
In keeping with comparisons made by opponents of alcohol market reform, U.S. states are divided into two basic groups: the 32 license states, which simply license private alcohol producers, wholesalers and retailers; and the 18 "control" states (including Michigan), where state government acts as a wholesaler of beer, wine or hard liquor.
LaFaive and Davies also subdivide the 18 control states into "heavy," "medium" and "light" control states, but find that regardless of the degree of control, these states did not typically achieve better alcohol-related health and safety outcomes.
The authors also review two studies of retail density regulations, which limit the number of bars and alcohol stores in an area. This discussion includes a 2010 doctoral thesis by a University of Michigan scholar who found that a higher density of retail alcohol establishments in rural Michigan areas was actually associated with less alcohol consumption, binge drinking, and drinking and driving.
Davies noted that many state strictures designed ostensibly to protect public health and safety do neither. "When it comes to reducing alcohol-related fatalities," he said, "those who are more concerned with results than appearances need to take a close look at the effects of alcohol control policies. In a best case scenario, state control of alcohol markets has no effect on alcohol-related fatalities. In many cases, state control is associated with increased alcohol-related fatalities."
Last year, a state Liquor Control Advisory Rules Committee was charged with developing alcohol control policy reform proposals for Michigan. The release of the committee's recommendations is expected this summer.
The Policy Brief, titled "Alcohol Control Reform and Public Health and Safety," is available online at http://www.mackinac.org/16902. Other essays on reform of Michigan's regulation of alcohol distribution are posted at http://www.mackinac.org/16531.
Government Article 007119
Dave Rogers is a former editorial writer for the Bay City Times and a widely read,
respected journalist/writer in and around Bay City.
(Contact Dave Via Email at email@example.com)
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