Despite progress, Georgia’s alcohol laws are still a mess
Georgians love their wine, beer and spirits, and it especially flows freely around Christmas and New Year’s Eve. Yet despite Georgia’s long-term relationship with alcohol, the state only recently began repealing some of its downright puritanical alcohol laws. Out of the many, most were created—in part—to restrict access to the delicious concoctions.
In fact, only in the past decade could localities begin permitting Sunday off-premises alcohol sales and allow restaurants to serve alcohol before 12:30 p.m. on Sundays, and just this year, direct-to-consumer beer and wine delivery became a reality. Regardless of these successes, silly alcohol regulations remain in place that make these products more expensive and harder to obtain than necessary, and these realities might hurt your holiday buzz.
As it stands, the Georgia alcohol industry is largely at the mercy of the state’s three-tier system. Essentially, it is a legal framework that only empowers alcohol producers to sell their goods to a wholesaler who can, in turn, only sell to retailers, and they are the only entities whom individual customers like you and I can buy from. While there are some exceptions to this paradigm, including for brewpubs and some wineries, Georgia’s state statute mostly mandates a rigid bifurcated model.
Nearly every state, including Georgia, adopted this system following Prohibition’s demise, and it has remained largely intact ever since. While its supporters struggle to defend it, it seems that the real reason for its creation is that it gives the state more control over the alcohol industry and gives it more opportunities to tax different levels of the alcohol business—thus generating state revenue.
The ridiculousness of this model is astounding and imminently evident—especially when you imagine if it had been adopted universally for all industries. If it were, then I wouldn’t be able to purchase my airline tickets from Delta Airlines. Rather Delta would have to sell its tickets in bulk to a wholesaler who would then sell them to retailers—perhaps like Travelocity—where I could pay for my tickets.
Likewise, I couldn’t buy my Macbook Air from Apple. The tech company would be compelled to sell their products to a middleman who would then sell them to a retailer like BestBuy. Only then could I purchase the computer. To be clear, there’s absolutely nothing wrong with BestBuy or Travelocity (I have shopped at both), but requiring such a convoluted system would be absolutely ludicrous.
While I have no doubt that the three-tier alcohol model has become a financial boon for the state’s coffers, it’s an unnecessary impediment and doesn’t benefit consumers. For one, it interferes in the market and hamstrings companies from pursuing more innovative, efficient approaches.
I’d wager that if it were legal, more producers would like to sell their products directly to consumers and, in many instances, bypass wholesalers and sell directly to retailers. By cutting out superfluous steps and middlemen, producers could avoid extra costs, taxes and markups—passing the savings on to the consumer by providing less expensive products.
Adopting a new, streamlined model is easier said than done. Opposition to comprehensive reforms of the three-tier system has been fierce. After all, a number of individuals have learned how to benefit financially from the arrangement, and they worry that dismantling the three-tier system will hurt their bottom line. In fact, liquor compliance law expert Jeffrey C. O’Brien witnessed a prime example of this. When attending a panel, he heard a straightforward answer from a beer wholesaler lobbyist about their opposition to three-tier system reforms: “we like the way the current system works because we make a lot of money under it.”
Of course, this sentiment isn’t representative of all wholesalers—many of whom I have spent time with and are wonderful people—but the poorly conceived statute creates financial incentives that serve to inhibit more substantive reforms. The result stymies business innovation and keeps costs high for Georgians who imbibe. Certainly, the Peach State can do better.
So, as the holiday curmudgeons stay at home responsibly nursing their adult beverage this year, I recommend that they turn their ire on the regulations that made their cocktail more expensive.
Image credit: tristan tan