The craft beer, farm wine, and small-batch spirit industries are creating some of the most exciting businesses in Arizona. Yet the laws that govern alcohol distribution in this state, many enacted following Prohibition nearly a century ago, often look like arbitrary mishmash. And as consumers and businesses demand choice, those laws are becoming increasingly difficult to defend, especially by the special interests who benefit from this antiquated system.
Let me give you two examples. Did you know that if you want to order wine from your favorite vineyard on the Internet, you have to show up in person at the winery first? That’s right – whether the winery is in Sonoma or Sonoita – you can’t have it shipped to your home unless you were physically present at the winery.
Sound silly? Try this one.
A shop owner in Arizona cannot provide samples of beer or wine without a government permission slip, unless that shop is over 5,000 square feet, in which case, no government permission slip is necessary. So, Bevmo! can pour endless samples of pinot noir, but your neighborhood mom-and-pop shop cannot without special government permission and impenetrable red tape.
This sampling restriction became very real to Danielle Middlebrook and Craig Dziadowicz, the owners of the Hidden Track Bottle Shop in downtown Phoenix. Hidden Track is a small, 600-square-foot retail store in a business building at Second Avenue and Monroe Street that specializes in carefully curated beer and wine selections from around the world. It is precisely the type of small business that policymakers claim they want to encourage in downtown’s central core. Yet, when they arranged a sparkling wine sampling on New Year’s Eve, they had to turn away 25 loyal customers after getting tangled in sampling restrictions.
Of course, defenders of consumer choice and the right to earn an honest living did not advocate for these restrictions in the law. Large and powerful alcohol distributors and big box shops did. And they care little about consumer choice or small business if it impedes their government-conferred monopoly or eats into their bottom line.
Fortunately, a group of courageous lawmakers is trying to eliminate these protectionist restrictions.
SB1381 would remove the in-person purchase requirement for direct shipment of wine. HB2182 would jettison the 5,000 square footage requirement for sampling privileges.
I say courageous because even simple, common sense reforms like these are opposed tooth-and-nail by the special interests who benefit from protectionist legislation.
The opponents of the direct shipment bill, for example, claim that Internet orders of specialty wine will increase the ability of minors to access alcohol. While underage drinking may be a valid concern, the legislation specifically requires age verification, and there has never been any evidence – ever – that direct shipment of wine increases the risk of underage drinking in the many states where direct shipment is already permitted. Moreover, this argument has been directly rejected by the U.S. Supreme Court in a case involving direct shipment of wine.
The alcohol laws in this state are in need of major reform. Reforms based on the propositions that consumers should be able to choose the products they want without government-mandated middlemen, and businesses should be able to stock and advertise the legal products their consumers desire. Allowing for more liberal direct shipment of wine and eliminating an arbitrary square footage requirement for sampling are small steps in the right direction of bringing Arizona’s alcohol laws into the 21st century.
– Jon Riches is the director of National Litigation at the Goldwater Institute.