Liquor to Go: An Idea Whose Time is Now

It seems much of the state’s liquor code and rules are written for a protected class

For years, the Mackinac Center for Public Policy has argued for reforms of the state’s alcohol control regime law and associated rules. Many are archaic and do little more than protect the profits of Michigan’s beer and wine wholesaler monopolists. There’s a new problem now with law and alcohol: Shutdown orders have threatened the livelihood of bars and restaurants that sell it.

There has been movement to loosen several alcohol-related restrictions in Michigan. All deserve applause. Most recently, and to help businesses recover from the COVID-19 pandemic, the Michigan Liquor Control Commission said it would offer more businesses in the alcohol trade the opportunity to sell beer and wine for carry out. This is good news for some Michigan bars and restaurants but it doesn’t go far enough. Many Michigan on-premise licensees already possess an extra license to do that, so this liberalization of the state’s alcohol control regime isn’t as big of a deal as it may seem.

What was missing from the reforms announced by the commission, however, was permission for these very same businesses to sell mixed drinks on a to-go basis. We hope this was an oversight. Bar and distillery owners apparently do, too. A number of them have started a petition for the state to allow such sales during the pandemic. Their voices appear to have been heard as on May 21 legislation was introduced to permit cocktails-to-go in Michigan.

The order for restaurants and bars to close in Michigan, save for carry-out orders, has had a devastating impact on the economic wellbeing of the owners and their employees. Loosening regulations on to-go sales would give businesses an opportunity to increase revenues and provide job opportunities at a time when they are struggling to survive. The LCC seems to recognize this but only insofar as it involves beer and wine. But why?

Critics will no doubt suggest that permitting to-go sales of mixed drinks is a bad idea. The LCC has already done so, but they have not publicly explained why. I will look forward to hearing their evidence against this type of change.

I would also like to hear a reasonable argument about why hard liquor needs to be treated so much differently than beer and wine in state law. Consider a few examples:

  • A bar or restaurant, for example, that has obtained a retail license to be a “specially designated merchant,” may, in addition to selling beverages on site, sell beer and wine for consumption off its premises. By contrast, it cannot do so for mixed drinks. This despite new changes by the LCC to allow for more on-premise licensees to be able to sell beer and wine off premise.
  • Stores that sell liquor for consumption off premise must possess a “specially designated distributor” license that is strictly limited by a quota based on local population. Quotas for licenses to sell beer and wine for off premises exist too, but they are not as strict and come with broad waiver and exemption opportunities.
  • The state allows on-premise licensees such as bars to purchase up to nine liters of liquor from retailers each month. This can help tide over a busy business until its next shipment arrives via a state-picked distributor (the state acts as wholesaler for all liquor). The same bar owners are prohibited from doing so for beer and wine.

It sometimes seems much of the state’s liquor code and related rules are written for a protected class of apparently influential beer and wine wholesaling monopolists.

Even consumer safety seems a distant second to these interests, especially considering data shows heavy state control of alcohol markets isn’t the elixir government and consumers should look to for better social outcomes regarding alcohol use. This is important to remember, because opposition to selling mixed drinks for takeout may congeal around some safety argument.

Michigan needs a major alcohol control reform effort. One positive baby step in the right reform direction would be to permit those businesses who already have the right to sell alcohol to do so for takeout, including for cocktails. Doing so could make for a few happy hours on the way to reopening society.

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.