Re: Beer & Wine Price Fixing Takes A Hit
- From: "Jerry Okamura" <okamuraj005@xxxxxxxxxxxxx>
- Date: Sun, 07 May 2006 17:29:11 GMT
Interesting posting....thanks...
"Jim Higgins" <gordian238@xxxxxxxxxxx> wrote in message
news:125rp0ekmmksb2e@xxxxxxxxxxxxxxxxxxxxx
http://www.hollandsentinel.com/stories/050706/business_20060507058.shtml
Sunday, May 7, 2006
Losing control? Federal court ruling could change how Michigan handles
beer,
wine
By PATRICK REVERE Business editor
Michigan has some of the highest retail prices in the country for beer and
wine, but a recent federal court ruling in Washington state could
drastically change the way alcohol is distributed here and drive down
prices
for consumers.
U.S. District Court Judge Marsha Pechman sided with Issaquah, Wash.-based
retailer, Costco, regarding its claim in a suit against the Washington
Liquor Control Board that a state's right to regulate beer and wine under
the 21st Amendment does not supersede federal anti-trust laws aimed at
creating a fair and competitive marketplace.
Washington's liquor board is appealing to the 9th U.S. Circuit Court of
Appeals in San Francisco, but if the decision is upheld it would eliminate
key statutes in so-called "control states."
Michigan, like Washington and 24 other states, has laws that prohibit
retailers from buying alcoholicc beverages directly from manufacturers,
require wholesale distributors to wait at least 180 days between price
adjustments, require uniform pricing statewide, prohibit credit purchases
of
alcohol and volume discounts from wholesalers. The laws also prohibit
retailers from using central warehouses for beer and wine and require that
the product be sold at a price not lower than wholesale cost.
While a final ruling may involve a decision from the U.S. Supreme Court,
changes to these Michigan "temperance" laws could come within the next two
years.
"I can think of a couple large retailers, like Meijer and Wal-Mart, that
would really love to see this change happen in Michigan," said James
Storey,
the state liquor control commissioner for Ottawa and Allegan counties.
"They
could go straight to the manufacturer rather than dealing with half a
dozen
wholesalers. They also could load up beer and wine for their stores at the
same time they're loading their soup and soap."
Storey said the repeal of laws that have been place since the end of
Prohibition in the late 1930s would cut the cost of a bottle of wine or
six-pack of beer. But the change, he said, could come at a cost to public
health.
"This industry has distinctive laws, and for good reason. The period
before
Prohibition was brutal because of overconsumption," Storey said. "One main
reason is that there was vertical integration - manufacturers owned the
saloons and their objective was to drive up consumption.
"The reason this three-tier system (between manufacturers, wholesalers and
retailers) was put into place was to create a buffer between the powers
and
protect consumers," he said.
Storey said the ruling in Washington specifically addresses beer and wine
sales, and likely would have no affect on how the state manages
distribution
of spirits such as bourbon, gin and vodka.
Benjamin Rudolph, chairman of the Grand Valley State University marketing
department, said the liquor business is the only consumer-based industry
with such protections. The state liquor industry has never wanted to
compete
on the basis of price, but Rudolph said the time has come to level the
playing field.
"I hope that this precedent applies here in Michigan and that someone sues
the state to get this changed," Rudolph said. "What business wouldn't want
that? But this industry should not be any different from other industries.
This is pulled off largely because politicians and people in the industry
want to view it as a kind of 'sin tax,' but it's not. It's simply a bunch
of
little state granted monopolies, and it does nothing for the consumer. If
drinking is a sin, than it should be outlawed, but everyone saw how well
that worked out in the 1920s."
The unintended victim of the Washington decision would be the middleman,
the
state's beer and wine wholesalers. Michael Lashbrook, president of the
Michigan Beer and Wine Wholesalers Association, said the state has more
than
75 distributors, employs about 5,100 people, paid wages of about $290
million in 2004, and that year shipped more than 100 million cases of beer
for sales of $1.59 billion.
"The wholesalers are the local faces of the industry. They are large
employers that pay good wages and benefits and uphold the standards of
their
region," Lashbrook said. "It is a product that traditionally has been
subject to local control, and that's what the 21st Amendment has all been
about.
"The current norm toward alcohol de-regulation would throw that all out
the
window," he said.
Dan Andrakowicz is general manager for Mervenne Distributing, a 38-person
operation at M-40 and 142nd Avenue that delivers Anheuser-Busch products
to
stores and bars in the Holland area.
"We're concerned," Andrakowicz said. "We're a small wholesaler that
employs
local folks. This could eliminate businesses like Mervenne. If retailers
can
go straight to the manufacturer, what use is there for us?"
Andrakowicz said the state will have a difficult time promoting safe
drinking of beer and wine and preventing underage consumption of alcohol
if
the local distribution systems is sacrificed.
"We work on education programs with local police, and the Ottawa County
Sheriff's Department," Andrakowicz said. "We helped develop a program
called
CHOOSE, which stands for Communities Helping Ottawa Obtain a Sober
Environment.
"We make sure we get to the schools during prom season to help enforce
responsible rules that help make sure alcohol doesn't get into the hands
of
someone who shouldn't have it," Andrakowicz said. "If you eliminate the
wholesaler or cut them back, will those things continue to be done?"
Bob Byars, owner of King's Cove Party Store, at 531 W. 17th St., said the
ability for a retailer to have greater power over whom it purchases from
and
at what cost it buys products seems attractive on the surface, but really
benefits only the larger retailers.
"I think the little guys would be left to buy from the wholesalers that
survive while a place like WalMart can negotiate a price directly with an
out-of-state manufacturer and get deep discounts," he said. "Little guys
like me don't have the ability to drive a truck to St. Louis to pick up an
order from Anheuser-Busch, which means our products are going to cost more
off the shelf.
"We're always going to have a convenience factor, but we'll struggle. I
might fight to survive, but some of the local places are going to go out
of
business. It may not be their objective, but for WalMart it's just another
little retailer off the street."
--
"A democracy is a sheep and two wolves deciding on what to have for
lunch. Freedom is a well armed sheep contesting the results of the
decision."
Benjamin Franklin
.
- References:
- Beer & Wine Price Fixing Takes A Hit
- From: Jim Higgins
- Beer & Wine Price Fixing Takes A Hit
- Prev by Date: Re: Ambien linked to sleep-driving
- Next by Date: Re: Study: Americans sicker than English
- Previous by thread: Beer & Wine Price Fixing Takes A Hit
- Next by thread: Car sales are soaring in foreign markets
- Index(es):
Relevant Pages
|
