Time to Uncork Beer and Wine Reforms?

Office of Regulatory Reinvention seeks input

The Office of Regulatory Reinvention granted permission to the Michigan Liquor Control Commission to open a review of alcohol control rules. The Mackinac Center for Public Policy weighed in on two (beer and wine) of them today.

The Mackinac Center has long had an interest in the state’s beer and wine rules because they, among other things, raise the cost of beer and wine in the state while enriching a handful of crony capitalists. One study indicates that these rules may raise the cost of beer and wine by 6.4 percent to 30 percent, depending on the price.

The rules mandate that beer and wine wholesalers post their prices with the Michigan Liquor Control Commission and then hold them for some length of time, depending on the product. This has the practical impact of state endorsed, legal price collusion. It allows manufacturers and wholesalers to know what their competition is charging and it limits the amount of product-specific price changes.

Both mandates suffocate competition and raise prices. We’re not the first to notice. Former Gov. William Milliken asked that these rules be eliminated in 1979. Last June the Center made its first request to have rules R.436.1625 (1-4) and R.436.1726 (1-2) partially repealed. Our request was rejected for three reasons. One of those was that the MLCC would be taking up a comprehensive review of its rules later and that would be a good time to consider the rules’ efficacy.

The ORR page is inviting recommendations now and their site for doing so reads in part:

Michigan's citizens deserve a regulatory system that fosters business growth and job creation. The Office of Regulatory Reinvention (ORR) is dedicated to working with all citizens to identify obsolete, burdensome and unnecessary regulations that are limiting economic growth.

We need your help. We would appreciate hearing your thoughts regarding which existing regulations could be changed or eliminated in order to make Michigan's regulatory system more simple, fair, efficient and transparent.

I submitted a one sentence recommendation for repeal along with a link to our previous request.

These are archaic rules that reward more than 60 beer and wine wholesale businesses in Michigan at considerable expense to consumers. They should be repealed and the sooner the better.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.