Do you like microwbrews?
Fine, I’ll work on sundays.
That was my response to the law, or repeal of the law, that said that liquor stores could now be open on sundays. Big deal right? Well, if you have read my blog for a while then you know that I have been concerned about grocery/ convenient stores eventually being able to carry full-strength beer as opposed to the “3.2″ beer they are currently allowed to carry. I have so many problems with this issue that I don’t know where to start.
1. Part of the original agreement of liquor stores staying open on sundays was that this would not happen, grocery stores would just swallow the cost of losing money on 3.2% abv beer. If it wasn’t part of the original agreement, I doubt it would’ve ever happened, we’d still have our sundays off like everyone else. Plus, if this new law goes through, what’s going to stop them from doing it with wine? Liquor? Where does the protection of liquor stores come in? Everyone is arguing over the protection of grocery stores, that they shouldn’t lose money off of 3.2% abv beer, but why should liquor stores lose money? Is it just a question of who has more influence over our state senate/house? It seems that way.
2. 3.2% shouldn’t even exist. Grocery stores, with any sort of logical insight, would have stopped carrying 3.2% beer when the repeal first went through and they wouldn’t be losing any money whatsoever. That’s what we do if the product doesn’t sell, you move it off the shelves as quickly as possible, you don’t complain to the government about it. If it doesn’t sell, don’t carry it.
3. In Colorado the system for buying beer has already been set up. Why do you think that Colorado has soo many wonderful microwbrews? Because there is a market here. They’re sold at independently owned liquor stores and people have the wonderful option to buy whatever kind of beer they can dream of. Options are endless, and I will argue that options are the key to a successful economy, otherwise we start to resemble soviet grocery stores with grey boxes lining the shelves. Many, many breweries have already stated that if this law passes, they will be closing their doors. (Crabtree, Lefthand, Fort Collins Brewery, etc.) If they do so, what will the effect on Colorado’s economy be?
a. Tourism will decline. People from all over the United states come to Colorado for its wonderful festivals, local breweries, and things that are related to beer. The GABF (Great American Beer Festival) draws thousands of tourists every year and is seen as one of the best beer festivals worldwide. What constitutes the GABF? LOCAL MICROWBREWERIES. If half of the participating microwbreweries are from Colorado, and this law passes, you can expect half of those Colorado micros to close their doors. Thus, if enough microwbreweries close their doors, the GABF closes its doors (or moves), and Colorado misses out on millions of dollars in revenue. (This is just speculation, I have no idea how many breweries wiill or will not close their doors).
b. Lost jobs. Now correct me if I am wrong, but now is a time in our economy that jobs should be protected and created, not lost. This will have a much more profound effect than most realize; Liquor stores will shut down across the state, and employees at those stores range from 3-30 (I’ m guessing 30, I have no idea how many employees Wilbur’s or DaveCo employs). Also, liquor representatives will greatly deminish. Elite Brands is a small, but very reputable liquor distributor. They distribute mostly high-end beers, as well as wine and some liquor. Are grocery stores going to carry the Lost Abbey beers? Chimay? Port Brewing? I doubt it. So this will also effect the economies of outisde states as well. That ranges from California to Maine to Belgium. Less production means less jobs. (Shout out to Tia, Elite Brands rep).
c. I have been doing some serious thinking about the positive effect that this law will have. It will increase production for Kroger, and Wall-mart, and Safeway. It will be convenient. But what else will it do? The convenience arguement isn’t a sustainable argument, I have yet to find a grocery store in Colorado that doesn’t have a liquor store within 200 feet. i feel like the United States as a whole should appreciate the 20 second walk it takes to get to the liquor store. We should encourage convenience without dismantling every sort of physical exercise. I will spare you my argument against places like Wall-mart, because that is not the focal point of why i am writing this. This economic section of this post is to ask this: What growth will this create? The answer: none. It will only transfer the growth away from the creation of jobs (small businesses, microwbreweries, liquor reps) to corporations where an increase in employment is, at best, minimal. Keep in mind i’m not an economist. But I do care about the economy.
4. The price of hard liquor and wine will surely rise. Now that profits from beer have been diminished, it is essential that we (the liquor store) make up that money somewhere. The mark-up on beer, wine, and spirits are some of the lowest mark-ups in retail. Plus, you have to figure in: employee costs, insurance, cost-of-stock, electricity, theft, broken bottles, etc. Needless to say, the retail side of the liquor business skims its slim profits off the top, and hopes for big days to bring big profits. First off, we make most of our money on the cheap domestic beers. Those are also t he beers with the lowest margins of profit, but we rely on buying in bulk and selling mass quantities. So if 30% of our sales in in domestic beers (again i’m speculating), and we lost that 30% to grocery stores (they will be able to buy in larger bulk than us, thus driving their possible margins lower than ours, thus customers buying their domestic beers from grocers to save 50 cents), we would have to make that money up somewhere. If this law goes through, I imagine that liquor stores heavily raise their margins on liquor and wine in order to make up for it. We have to eat too.
I have more to say, but I already feel bad about leaving such a long post. Plus, I am more interested in the comments I get. I want to see what you all think about this so please, leave a response.
Regardless, I’ll smile cuz it feels good
Btho
Loading...
I do like microbrews.
I think at least some of (2) is caused by (1); 3.2% looks that much more attractive to grocery stores because their lack of sales will encourage the government to act in the grocery store’s favor, so they might still buy it even if there is no consumer demand for it.
But if the benefits of keeping this law really outweigh the costs, why not apply this sort of restriction in all markets? We could shut down Wal-mart all together, and it seems lots of specialized stores would open up that sell only tennis rackets, or only groceries, or only liquor. They would invariably use more labor in total to run the small stores compared to the relatively few workers needed to run just one wal-mart, so employment would go up. Recession ended.
But why stop there? At the risk of not being taken seriously, I will argue that we could shut down all stores. Because even liquor stores economize on the ability to put lots of liquor in one space, much like wal-mart saves money by selling as many goods as they can under the same rent bill. And finally, we could eliminate trade because specializing in the work that we are good at reduces the total number of jobs.
Alright, I know that sounds sarcastic, but its not meant to be. I just don’t understand, if it is the case that people would rather purchase beer cheaper and more conveniently from some where else, why don’t let them. And if other stores are particularly good at supplying liquor conveniently and at low cost, why don’t we let them? And if some businesses are not as good at providing these goods, why should the government protect them from competition?
Jesse - March 4, 2009 at 9:01 pm
Just cuz you make a good argument doesn’t mean you get to post it twice… lol
My only response to your (yes sarcastic) response is that your solution is going backwards. I’m not arguing for undoing anything. Don’t take anything away from anyone. Leave it like it is. This was never a big deal until grocery stores found a way to put people out of business, not vis versa. It is very tempting to go into a “wal-mart rant” right about now, but i’ll refrain. I’m not taking tennis rackets away from anyone. I’m not taking food away from anyone. I’m not closing anyone. I want that to be clear because it is fundamental err in your argument. wal-mart should thrive, fine. But don’t pass a law and get rid of my job for their sake. Don’t put thousands out of a job for wal-mart’s sake.
You don’t let them because it would cripple colorado’s economy, and many of those micros that you claim to like wouldn’t exist anymore. speakin of which, wanna split a beer?
btho - March 4, 2009 at 9:20 pm
The way I see it, the flaw in Jesse’s argument is that liquor stores can only sell alcohol, not clothing, not tires, not food, not gas. There is no level playing field here, if grocery and convenience stores can sell alcohol, then they take the advantage that liquor stores have, while liquor stores will not be taking anything away from those stores. I believe the world would be a much better place without all the big box stores, and I love the thought of going back to mom and pop stores and locally owned businesses, rather than big corporations running everything. Small businesses are an important part of the economy.
Laurie - March 8, 2009 at 8:37 pm
The problem with Jesse’s argument is that he places all beers on equal footing. Apparently Jesse doesn’t see the value of having small breweries or local businesses. Why would the government want to protect small breweries and small businesses from grocery store competition? Because it encourages creativity and innovation, niche markets, and better beer.
Jesse should be forced to drink Budwiser for the rest of his days as penance for his blind support of “The Market”. Budwiser sells more beer than anyone, therefore is must be “the best”, right Jesse?
chris r - March 12, 2009 at 9:20 am
WOOOHOOOO!!!! This law did not pass yesterday! Long live the micros and small businesses!!!
btho - March 12, 2009 at 6:56 pm
(and my job)!
btho - March 12, 2009 at 6:56 pm
Laurie, Chris r: How could the world be a better place without big box stores? Big box stores provide tons of goods at really low prices. Lower prices don’t just mean we can buy more things, they might, but they might also mean we don’t have to work as much and we can spend more time with the people love or doing the hobbies we love that don’t produce a substantial income. The only reason a big box store might put a local store out of business is because the local customers aren’t willing to pay the higher prices associated with buying local. But those prices are only reflecting real costs of producing local. Personally, I would rather pay low prices (and reap the above benefits) at target or walmart, rather than pay high prices (and sacrifice the above benefits) for specialized, local goods. In the case of beer, Person A might be willing to sacrifice a little bit of quality in beer for a lower price; He might not get his Pliny the Elder but he can drink a Pilsner Urquell instead. Person B may not want to make the same trade-off and choose to pay a higher price for the specialized, higher quality, higher cost beer. The government’s job isn’t to subsidize person B at the expense of Person A, because Person B is doing a “better” job at defining what is “best”, which is essentially what they are doing. In fact, I think economics show us that the government is doing more harm then good by restricting trade.
Jesse - March 13, 2009 at 11:59 am
Jesse –
That’s nice. Hope you’re enjoying your Budweiser. No arguments about Fat Tire; it emerged first as local brews sold through local markets and gained popularity through small stores. Oh, and say hi to the nice folks at Wal-Mart for me.
-Chris
Chris - March 14, 2009 at 4:52 pm
Chris -
I don’t understand the argument, or the rancor. No one is saying that local markets shouldn’t exist or that we should ban innovation, creativity, or niche markets. But you ignore the question, why should we be subsidizing high cost, local goods and specialized products, at the expense to individuals who would prefer not local, not specialized products for lower prices? My preference for beer is irrelevant but let’s say I do prefer Budweiser to New Belgium. Why shouldn’t I be allowed to buy Budweiser at Walmart, but instead am forced to pay higher prices at a local liquor store. If you want to buy New Belgium, you can go to a local liquor store and buy it, but why does that require you to restrict my freedom?
Jesse - March 15, 2009 at 5:14 pm
I have an idea, and this is just to play devil’s advocate, Why doesn’t all beer cost the same? Lets have the government TRULY subsidize the cost and raise/drop the price of all 6 packs to lets say 7.99, thats probably a decent median price. Then, lets see what the people want, what they buy. States like Pennsylvannia have already controlled the price of beer and liquor, and a beer like Yingling, which was a local beer at the time, is now a huge success all over the east coast, much like coors was at one point in the west (because of our liquor store law, not direct government intervention like PA). My point is that sometimes government intervention, whatever kind, can be ultimately good for the people (who jesse claims “choose” what they want) and and for huge corporations. Do you believe that? The government did something right! And hopefully, for companies like Odell (whos sales have expanded immensely), Breckenridge, FCB, New Belgium, etc, the government did something right again, by allowing for those businesses to expand.
btho - March 17, 2009 at 12:18 pm
Interesting blog, I’ll try and spread the word.
wonker - March 19, 2009 at 6:02 am
This blog’s great!! Thanks
.
matt - March 28, 2009 at 7:09 pm
Rancor, Jesse? I think not. Challenging an idea has nothing to do with malevolence. As we say in my country: Was man sich eingebrockt hat, muss man auch auslöffeln – look it up. I think you will concur. No insult intended.
Chris - March 28, 2009 at 10:25 pm
Hello!
Very Interesting post! Thank you for such interesting resource!
PS: Sorry for my bad english, I’v just started to learn this language
See you!
Your, Raiul Baztepo
RaiulBaztepo - March 30, 2009 at 12:10 am