Free Beer: Liberating Libations from ‘Bootleggers and Baptists’

Event Summary

What explains the peculiar web of regulations surrounding alcohol in America? At an AEI event on Tuesday evening, panelists discussed the current status and history of the regulation of beer, wine, and distilled spirits in America. Stephen George of Montesquieu Wines detailed his company’s experiences in overcoming regulatory hurdles that prevent winemakers from selling their products directly to customers, and emphasized the increased costs this generates for consumers. Because of a patchwork of state laws, taxes, and regulation — and a decreasing number of wine wholesalers to handle these logistics — consumers must face restricted choices and higher prices, claimed George.

Brandon Arnold of the National Taxpayers Union explained how modern alcohol regulation began with the Reinheitsgebot, or German beer purity law. Ostensibly aimed at protecting consumers and ensuring the purity of beer, Arnold said that the law was in fact rooted in trade protectionism, price fixing, and cronyism. He related this to home brewing today and its role in America’s beer renaissance.

Mixologist, blogger, and industry consultant Jacob Grier discussed the origin of America’s three-tiered system of alcohol manufacture and distribution, which has been in place since the end of the Prohibition era. Grier outlined how the system protects incumbent interests and makes innovation more difficult, and highlighted America’s nascent craft-distilling movement.
–Dan Rothschild

Event Description

For centuries, the manufacture and sale of beer, wine, and spirits has been a highly profitable and highly regulated enterprise. And where profit and regulation meet, cronyism and rent-seeking frequently follow.

From moonshiners buying off politicians during the Prohibition era to liquor stores trying to ban supermarkets from selling beer today, regulation has been used to keep start-up brewers, winemakers, and distillers from manufacturing alcohol; to preserve inefficient distribution systems; and to restrict choices available to consumers. Frequently, this regulation has been used for “noble social goals” — hence the famous public choice example of “Bootleggers and Baptists.”

Can markets and consumers win? Join us for a discussion of the history and future of federal and state alcohol regulation and competition, followed by a reception with beer, wine, and spirits.

If you are unable to attend, we welcome you to watch the event life on this page. Full video will be posted within 24 hours.