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The "Right" Stuff: Beer banter

The "Right" Stuff: Beer banter
Date 11/17/2005 12:00 AM | Topic:
Cold hard fact: college students drink beer.

For these young
players in market capitalism, the economics of beer is a pivotal
issue, and the increasing role of government in regulating the beer
industry is one matter of which all college beer drinkers should
take heed. The price paid for drinking beer is rising and you, the
consumer, have the most at stake.
The most recent "traveshamockery" beer drinkers face is
Wisconsin's legislation to give more power to state wholesalers in
distributing small brand beers. The bill forces brewers that
produce over 50,000 barrels a year to sell to wholesalers even when
it would be to the brewer's advantage to sell directly to
retailers, offering few exceptions.

You don't need a semester of
principles to know this is pathetic economics. Liquor stores and
big retailers will have to reluctantly bump up prices, small
breweries will have to pay an unwanted middle-person and college
students - maybe even you - will have to cough up more of summer
The wholesalers love it, though, and so does the Wisconsin
Wholesale Beer Distributors Association, an officious interest
group that donated $6,000 to state legislative campaign committees
- both Republican and Democrat - during the first half of the year,
not to mention another $24,000 in the previous two years.
Wisconsin's audacious legislators would, of course, deny money's
influence on the bill's passage and argue that alcohol is a
dangerous product and it needs layered regulation.

The Supreme
Court seems to disagree, declaring last May that New York's and
Michigan's bans on direct interstate wine shipment to consumers
were unconstitutional and anti-competitive.
As deplorable as all that sounds, Wisconsin's plight is minimal
compared to Iowa's. Iowa already enforces a three-tier system
embedding a wholesaler between the manufacturer and the retailer.
Worse yet, the middle-person that Iowa liquor stores buy their
liquor from has to be the Iowa Alcoholic Beverages Division.

If you
thought government support of private wholesalers was ridiculous,
you're probably not too keen on the government installing itself as
a middle-person. But regardless of whether it is a private
distributor or a government enterprise, enforcing a middle-person
is inefficient. Even Decorah's popular Dry Run liquor store would
have lower prices if it did not always have to buy from the state
or its beer distributors in West Union and Coralville. If there is
a problem with illegal sale of beer, heighten law enforcement
efforts or stiffen the penalties, but don't sabotage the

Another problem is the legal drinking age: it is 21, the highest
in the world. This issue deserves much more space than it will get
here, but in short, to send the message to 18, 19 and 20 year-olds
that they are responsible enough to serve, kill and maybe even die
in the military but not ready for even "a drop" of alcohol - as
Minnesota's underage drinking law specifies - is baffling. To be
sure, 18 is a fitting age to begin military service, but match that
with the drinking age. Since it used to be a purely state-to-state
issue, some of us have parents who were legally able to drink as 18

A 1984 bill changed the drinking law, allowing states to
set their own drinking age but threatening to take away federal
highway funding if the age was below 21. In all practicality, the
drinking age is a federal issue but the discussion has to start at
the grassroots level.
All these issues boil down to the inefficiency of government
regulation. Let the free market be, and give the beer back to the

Pat Knapp

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