Laws Entrench Liquor Wholesalers At Drinking Public’s Expense

As part of their regulation of alcohol sales, an estimated 33 states maintain so-called At Rest laws, which require that bottles spend time in an in-state warehouse before being sold to consumers. The laws limit competition, drive up prices to consumers, and make it harder to special-order less common labels. Now, as the New York Post revealed in a Sunday exclusive, New York may join the list following generous donations to Gotham politicians from an in-state wholesaler. State Sen. Jeff Klein (D-Bronx) alone got $33,000 from Empire Merchants LLC.

David Waldenberg, of BNP Distributing Co., said 180 small-and medium-sized New York distributors will hurt by the measure.

Those businesses have offices in New York that employ hundreds of people, he said, but use New Jersey storage facilities.

If their warehousing costs go up, these businesses will die and jobs will ultimately be lost, he said.

“The price of wine — it’ll go up $7 or $8 a bottle,” warned wine connoisseur and writer Jesse Nash. “The consumer is going to get nailed.”

In an (alas) still-relevant 1985 article (PDF) in Cato’s Regulation magazine, Federal Trade Commission attorney David Spiegel analyzed how anti-competitive state liquor laws exploit consumers. [adapted and expanded from Overlawyered]

Update: Tom Wark at WineInterview.com (via Michelle Minton, CEI) believes the New York bill as of this point is "going nowhere" following a vigorous campaign against it by small wholesalers who would be hurt by its provisions.