Lost amid the drive to expand alcohol delivery in the wake of COVID-19 has been the corresponding push—actually starting even before the pandemic—to allow more types of stores to sell alcohol. While more and more states have allowed grocery stores to sell booze in recent years, these efforts have been fiercely resisted by independent liquor store owners who claim that their small businesses will be forced to shutter if large chain retailers are suddenly able to sell alcohol.

Up until now, these debates have largely been devoid of actual data, but new empirical research has been published showing that grocery store alcohol sales don't really impact mom-and-pop liquor stores after all. At long last, this is one protectionist argument that can finally kick the bucket—if only policy makers will let it die.

Currently, 11 states still forbid wine from being sold in grocery stores while four still prohibit beer. In recent years, states as politically diverse as Mississippi, Connecticut, and Maryland have considered bills to expand wine and/or beer to their grocery store outlets, only to be met with a tidal wave of opposition. Any place where such reform legislation appears, it is immediately opposed by liquor stores in the state—sometimes called "package stores"—which already sell wine and beer and want to prevent any grocery store from becoming their new competitors in the market.

The impact of this protectionism extends far beyond the alcohol market, as well. It is why less populated states that restrict grocery store booze, such as Mississippi, have only one Costco and one Whole Foods in the entire state—and zero Trader Joe's outlets. These stores often depend on their alcohol selections, including their private-label alcohol offerings, to make their business models viable in more locales. Restricting grocery store booze can actually lock entire food stores out of a state.

This setup works just fine for liquor store owners. As one store owner claimed when discussing a Mississippi reform bill: "out of state retail corporations harvest money that could be recirculating in our local economies….Big out-of-state grocery and box retailers have had years of practice of profiting off the destruction of public health in other states." He went on to note that alcohol markets are "unable to regulate themselves without being destructive to public health and safety" and that if alcohol consumption increased, it would put "undue burden" on taxpayers, public safety officials, and the health care industry. One would be hard-pressed to find a business owner who so loathes the very product he sells, but these arguments are sadly par for the cronyist course when it comes to blocking grocery store booze sales.

While it is unclear how one might go about "harvesting" money, it is clear what this package store owner is really concerned about: protecting his bottom line. Unfortunately, package and liquor store lobbying associations are extremely influential in many states, which leads to reform efforts silently dying in committee year after year.

That's why states like Oklahoma and Colorado have opted for ballot initiatives to expand grocery store alcohol sales, as consumers overwhelmingly are in favor of it. But even successful ballot initiatives have not ended the debate, as a group of Colorado legislators introduced a bill in this year's legislative session to overturn the state's wine-in-grocery-stores ballot initiative (which only went into effect in 2023).

The main argument in favor of this repeal bill? "I don't want to see the independent liquor stores put out of business. They are owned by diverse entrepreneurs—50 percent are women- and minority-owned businesses—and provide jobs," said Colorado state Rep. Judy Amabile, a Boulder area Democrat who cosponsored the legislation. 

In other words, Justice Antonin Scalia's famous quip about the notorious Lemon test in Supreme Court jurisprudence—analogizing it to "some ghoul in a late night horror movie that repeatedly sits up in its grave and shuffles abroad, after being repeatedly killed and buried"—could just as readily apply to antigrocery alcohol claims.

After years of scaremongering and anecdotal supposition about whether grocery stores will or will not kill off mom-and-pop booze stores, facts have finally been injected into the debate by FMI, a food industry group. A new FMI paper by Vincenzina Caputo of Michigan State University studies the impact of Tennessee's 2016 reform that allowed wine to be sold in grocery stores in the Volunteer State. The paper compared the number of liquor licenses in post-2016 Tennessee with a hypothetical "synthetic version" of Tennessee in which the reforms were never passed. (This was done via a weighted average of control states that did not pass wine-in-grocery-store legislation.)

The report—a copy of which I obtained from FMI—shows just 62 fewer liquor stores selling wine in postreform Tennessee compared to the nonreform synthetic version of Tennessee—a result which was found to be not statistically significant. Overall, the quantity of liquor stores selling wine in Tennessee increased from 505 stores in 2004 to 733 in 2022, and liquor stores still held the greatest number of wine-selling licenses in the state in the postreform years. 

Further, the Tennessee wine-in-grocery-store reform accounted for a 23 percent increase in wine sales tax volume for the state—undermining the idea that chain stores "harvest" away money from local economies and the tax base.

These results show that our favorite mom-and-pop shops can do just fine in the wake of grocery stores being allowed to sell alcohol. In fact, many of these smaller stores have found a niche specializing in craft beer or hard-to-find wines and liquor that grocery stores have little interest in carrying, a point that both independent store owners and economists have made.

This new research provides a much-overdue corrective to the protectionist claims that small liquor stores have been peddling for years. Now lawmakers just need to listen.

The post Grocery Store Booze Doesn't Hurt Mom-and-Pop Stores appeared first on Reason.com.

The new plan to keep kids from drinking alcohol: Ban kids (and some adults) from buying drinks containing zero alcohol.

No, it doesn't make much sense.

But that's the argument being made by Molly A. Bowdring, a clinical psychologist at Stanford, who wrote this week in STAT that nonalcoholic drinks meant to resemble beer or cocktails are "a potential public health crisis."

The zero-proof beverage market includes brands like Athletic Brewing, by far the largest nonalcoholic beer brand, as well as a growing number of wine and spirits varieties. While nonalcoholic drinks still account for a tiny sliver of the overall beverage market, the rate of growth in recent years has been impressive—driven by consumers who are looking to enjoy a drink without getting drunk.

But won't someone think of the children, frets Bowdring. "While it's great that more people are taking to heart public health messages that reducing alcohol consumption can improve well-being and extend life, an important lesson from vaping as a replacement for cigarettes is being overlooked: What may be good for adults may be harmful to kids."

After contacting alcohol regulators in every U.S. state, she writes that she was shocked to find drinks that contain no alcohol are generally not subjected to limitations placed on drinks that do contain alcohol. Imagine that.

"Children and teens are, by and large, legally permitted to purchase non-alcoholic beverages. This is a huge liability," warns Bowdring. "The path from non-alcoholic beverage consumption to alcohol use among youths appears to be fairly direct….Among minors, consuming non-alcoholic beverages can socialize them to the drinking culture, with the beverages being perceived as cool, adult, and modern."

Goodness gracious, not that.

The logic here is seriously flawed in several ways. Most importantly, banning the sale of nonalcoholic drinks to individuals under 21—which includes a lot of adults, by the way—isn't going to make "drinking culture" seem much different. And even if it did, it is absolutely not the government's job to police what subcultures seem cool or interesting.

If there's a compelling reason for the state to prohibit the sale of alcohol to some individuals, it's on the grounds that consuming alcohol can increase the risk that they harm themselves or others. But kids are already prevented from legally purchasing or consuming alcohol—and someone who is purchasing or consuming a nonalcoholic drink is, by definition, not consuming alcohol in the first place!

Finally, Bowdring isn't arguing that kids who buy nonalcoholic drinks go on to become raging alcoholics or drunk drivers or anything dangerous like that. She's panicked over the possibility that they'll have an increased interest in drinking, period. But learning to drink socially and responsibly—which might include the consumption of nonalcoholic drinks at times—is a key part of being an adult.

This isn't an argument for banning video games because some kids who play video games will someday commit a school shooting. This is arguing for banning video games because some kids who play video games might someday drive a few miles per hour over the posted speed limit.

The post Will Banning Nonalcoholic Beer Save the Children? appeared first on Reason.com.

During the height of the pandemic summer of 2020, the proprietors of the Burning Bridge Tavern worked with local officials in Wrightsville, Pennsylvania, to host a series of outdoor gatherings for the community.

For their trouble, the bar's owners got slapped with a series of citations by the Pennsylvania Liquor Control Board (PLCB), the government agency that oversees and manages the sale of alcohol in the state. The citations were ticky-tack offenses, according to Burning Bridge's chief financial officer, Mike Butler. Twice, the bar was cited for noise violations because they'd allowed a band playing at the gathering to plug into the tavern's electricity supply. Another offense occurred when the owners and some family members were drinking inside the tavern, which was closed to the public, during a period when indoor dining was prohibited.

A frustrating situation, but not the end of the world. Burning Bridge's owners paid the fines associated with the citations and assumed that was that. But then the bar had to renew its liquor license.

"They denied it. They said, 'Oh, you're the guys that got all those citations,'" Butler says. "It was a real gut punch."

Turns out, over the past two years the PLCB has pushed dozens of Pennsylvania establishments that racked up pandemic-​related citations to sign "conditional licensing agreements" to renew their liquor permits. In some cases, those agreements have forced the sale of licenses—but in most cases, as with Burning Bridge, they've added additional conditions to the license that could prevent a future renewal from being approved.

While the PLCB cannot revoke existing licenses, the board is empowered to object to the renewal of a license or to demand the license can only be renewed conditionally. "In extreme cases," PLCB Press Secretary Shawn Kelly says, the PLCB can force the sale of a liquor license, though the board only pursues that option when "there is an operational and citation history that calls for such an agreement."

Even though Burning Bridge's owners weren't forced to sell their license, Butler says signing the conditional licensing agreement has come with real costs: The bar's insurance premium tripled as a result of being viewed as a greater risk.

Typically, those agreements have been used to curb nuisance bars or force establishments with a history of legal problems, like serving underage patrons, to clean up their acts. Recently, however, the PLCB has taken a hardline stance against establishments that violated pandemic-era rules.

"The people who violated the governor's mandates and orders should face some consequences," argued Mary Isenhour, one of the PLCB's three board members, at a January 2022 meeting where the first several of the COVID-related conditional licensing agreements were approved.

Isenhour was responding to an objection raised by a fellow board member, Michael Negra, who argued that the PLCB should take the view that businesses had "paid their dues" during the pandemic and should not face additional sanction now. Negra left the PLCB in June 2022 and now works for a ​Pittsburgh-based lobbying firm. He did not return requests for comment.

After Negra's departure, the PLCB has unanimously approved dozens of conditional licensing agreements for COVID-​related violations, including at least 10 that have required the sale of a license, based on a review of PLCB meeting minutes.

Kelly, the PLCB spokesman, maintains that licensees are "under no obligation" to sign conditional licensing agreements.

But any licensee that refuses would face a set of unattractive alternatives: not having the license renewed, or being drawn into a legal battle against the PLCB in state court.

"Do you risk your entire business, your license, the loans, all of that to fight" in a real court, asks Butler. "Or do you just kind of hold your nose and take your medicine? Tactically, for us, we weren't in a position to say, 'Yeah, we'll run that risk.'"

Chuck Moran, executive director of the Pennsylvania Licensed Beverage and Tavern Association, acknowledges that pandemic-era public health orders left many establishments with a difficult choice between following the law and surviving financially. Fairly or unfairly, "those who broke the rules went the wrong way and now they're paying the price," he says.

The whole matter raises some complicated questions about how our political institutions ought to handle, with the benefit of hindsight, the unprecedented circumstances created by the pandemic and policy makers' response to it.

"The feeling was that our government really isn't working to try and help us," says Butler. "At this point, it feels like they're coming after us."

The post Liquor Regulators Are Seeking Revenge on Bars That Broke Pandemic Rules appeared first on Reason.com.

Inflation stressing you out? Making you wish you had just a touch of nicotine in your system? Unfortunately, that'll cost a lot. While prices economywide have risen 3.1 percent in the last year, cigarette prices have jumped 8 percent. On top of federal and state taxes that often make up half the price of a pack, tobacco companies tend to raise their prices faster than inflation to make up for declining sales volume. These and the rest of the numbers in the Reason Sindex use data from November 2023.

The post The Sindex: Cigarette Prices Outpacing Inflation appeared first on Reason.com.