For those outside the Beltway, Washington is often a punchline for bloated and dysfunctional government. In fact, cynicism toward the nation’s capital often feels like one of the few truly bipartisan activities left in our country. But as a slate of recent changes in the district’s alcohol laws underscores, D.C. is a leader when it comes to forward-looking and rational drinks regulations.
Federal Prohibition was repealed more than 80 years ago, but most states still suffer under restrictive and backward regulatory regimes for alcohol. After Prohibition, states rushed to enact their own rules that either prohibit or tightly regulate every corner of the drinks market, and many of those rules still survive.
The worst post-Prohibition vestige likely is the three-tiered alcohol distribution system that mandates a strict wall of separation between producers, wholesalers and retailers. For most alcohol producers—from brewers to vintners to distillers—this antiquated system arbitrarily limits their ability to sell products to the public and stunts their efforts to grow to full capacity. The results are less economic growth, less entrepreneurial spirit-making and, ultimately, less craft booze. A recent example of the stifling effects of the three-tiered system can be seen in North Carolina, which prevents breweries producing more than 25,000 barrels annually from self-distributing their own beer. This has led to breweries in the Tar Heel State slow-rolling their growth to stay under the cap, and one North Carolina brewery even warned that it would potentially have to eliminate up to 11 of its sales and delivery positions if it was forced to use a middleman distributor.
D.C. has proven an exception to this dreary state of affairs, as shown by a bevy of alcohol law changes that took effect in the District last week. Among other reforms, the new laws will expand the capabilities of bed-and-breakfasts and hotels to sell alcohol directly to their guests. Grocery stores may now also sell wine, cider and mead in growlers, and distilleries and wineries will be able to sell their spirits in cans or kegs, rather than just bottles. Perhaps most exciting is the reform allowing distilleries to mix cocktails that contain both their own spirits as well as those of other brands, vastly expanding the types of drinks they can offer to visitors.
Although these changes may seem small at first glance, they are part of a larger trend toward more liberalized drinks laws in the district. In 2014, the city government passed an earlier round of alcohol reforms, which expanded Sunday alcohol sales, among other changes.
Furthermore, while alcohol retailers in most states must order booze exclusively through a regional wholesaler, retailers in the district can order spirits directly from alcohol producers. Not only does such an arrangement cut out the wholesaling middleman, but it also allows venues like local brewpubs to offer an elite selection of both local and out-of-state beer, rather than be limited to their supplier’s selections.
This means D.C. bars can serve beer from small breweries across the country that ordinarily would not have the capacity sell their products outside their home states. Such a setup has helped upstart distilleries in nearby Virginia, since they can sell their liquor directly to D.C. bars, a practice prohibited under Virginia’s own draconian state-run ABC system.
To be sure, D.C.’s legal regime for booze still has room for improvement and D.C. residents should be wary of attempts to reverse the recent reform progress. But states across the country should follow D.C.’s lead and start implementing sensible changes to their alcohol laws. In the drinks reform arena, at least, D.C. is the furthest thing from a punchline.
Image by Nicholas Haro