News From Terre Haute, Indiana


May 26, 2013

READERS’ FORUM: May 26, 2013


Greed not good reason to change state alcohol laws

In my experience, those calling for the deregulation of alcohol or the “modernizing” of Indiana’s alcoholic beverage laws are usually either trying to sell more alcohol themselves at the expense of their competition, or are ignorant about the history of alcohol in general or of Indiana’s alcohol history in particular.

Prior to Prohibition alcohol was basically unregulated, which lead to great abuses by suppliers, retailers and consumers. Breweries owned many of the taverns and tried to see how much beer they could sell to a poor, hard-working society (mainly men) desperate for companionship and escape from their harsh realities. Families were ruined as fathers drank and gambled their meager paychecks away at these unregulated establishments.

Prohibition was seen as an attempt to end this alcohol-fueled misery, but it was a total failure for several reasons. One, Prohibition raised no alcohol excise tax revenue via the illegal alcohol traffic, so states and local communities were left to police illegal activities as they saw fit and could afford. Two, Indiana, like some other states, enforced Prohibition vigorously, but many did not. Three, this meant alcohol was easy to get nearly everywhere and a new kind of lawless civil disobedience swept the country.

Eventually all but a few true believers came to admit Prohibition was a failure, but the question was what to do next? A teetotaler, John D. Rockefeller commissioned a report called “Beyond Liquor Control.” This report talked about steps that could be taken to regulate alcohol moving forward. After Prohibition ended, this report was used by the state legislatures as a guide to drafting their own state alcohol laws as called for in the 21st Amendment.

But here’s the rub. Each state crafted alcohol regulation laws that were similar in nature, but totally unique to that state, just as the Congress intended with the 21st Amendment. Prohibition had proved that different attitudes existed all over the country about alcohol consumption, so Congress decided the best way to reflect local attitudes and help ensure compliance with the alcohol laws was through the elected state legislatures.

To prevent the pre-Prohibition abuses of breweries owning the taverns and both trying to see how much alcohol they could sell, the states created state-regulated wholesalers and adopted what is known as the three-tier system of alcohol delivery. Now the suppliers would have to sell to the wholesalers representing the state, and the wholesalers would sell to the retailers. The wholesalers were to make sure their suppliers and retail customers were licensed and legitimate, the product was safe, and all the alcohol excise taxes were paid.

The wholesalers were also expected to treat all their suppliers and customers equally so that everyone got a fair shake. This has led to tremendous selections in the marketplace and benefits consumers.

Indiana has always been a conservative state as it relates to alcohol (before Prohibition it had 70 “dry” counties) and our laws reflect that, but that is exactly how the 21st Amendment works. Indiana’s laws reflect the attitude of its citizens through their elected representatives to the legislature. Indiana’s alcohol laws do not look like California’s, New York’s, Florida’s, or any other state, nor are they supposed to. They are unique to Indiana and have been for nearly 80 years. Each change to those laws should be debated in the legislature and should be considered against the history of alcohol law only in Indiana.

To cherry pick laws from other states and compare them to Indiana after 80 years of unique evolution is to be either disingenuous or to ignore the history of alcohol in Indiana and in those states. It doesn’t matter how or what they do in other states, it only matters what we do and have done in Indiana. Due to the fact there are only so many alcohol sales in Indiana every day (and they are all being made now), every change we make to Indiana alcohol law is going to help someone and hurt another. There needs to be a better reason for a change than simple greed. Legislators, especially those on the Senate and House Public Policy Committees, need to study alcohol law changes carefully before making them so the consequences are intended, not unintended. The welfare of Indiana family businesses are at stake as well as the accurate reflection of overall public opinion.

It is OK to be frustrated by what you see as “antiquated” alcohol laws in Indiana, but please remember this system of careful regulation has worked basically as intended for nearly 80 years. Indiana families have made business decisions based on Indiana alcohol law at the time their decisions were made, and deserve the checks and balances the legislative process brings.  

Since 1933, the 21st Amendment intended for the legislatures to be the battlegrounds for alcohol debates, not the courts. We need to insist on that if our alcohol laws are going to continue to reflect the wishes of the majority of Hoosiers.

— Marc Carmichael, president

Indiana Beverage Alliance

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