I was thinking about the political difficulty in breaking the three-tier model in a given state, and what the various interest groups are and how they can leverage their own self-interested arguments in favor of their political interests. In doing so, I wanted to think through the ideal arguments and location to break the current inefficient regulatory model, and pave the way for other states to innovate in the wine regulation space.
It seems to me that the core issue at stake in the regulatory debate around the high regulation of the wine industry is that there are key arguments that are off the table. Normally, any regulatory discussion around some kind of consumer good regulation involves two main threads - jobs, and consumer welfare.
The first argument is one where middleman wholesalers/distributors have an advantage. They are job creators (regardless of whether those jobs are economically productive), and can make persuasive and politically effective arguments to state legislators and regulators for the economic benefits of their existence. The difficulty lies in the fact that consumer welfare is not as effective an argument when applied to alcoholic beverages. Because many people view alcohol as a "sin" good, arguments for making it cheaper and more accessible are not nearly as effective as similar arguments about other goods.
Therefore, to make a persuasive argument in favor of dismantling inefficient middlemen, proponents of such a change need an effective and powerful retail coalition whose gains from such a reform carry strong political weight.
As I was thinking about how to frame this, I was considering model states where this dynamic might exist. One place that came to mind was Nevada. Casinos are immensely powerful political actors, and are also (I imagine) extremely large retailers of alcohol. If a state was to be the first domino to fall, then Nevada seems like an excellent battleground in which to engage. An alliance of majors casinos could provide a serious counterweight to wholesalers/retailers, and provide model for other states to follow when it comes to streamlining and improving alcohol distribution regulation in the United States.
The casino angle is an interesting one, although I wonder if that might add to the "sin" taboo associated with wine. I.e., if legislators are being lobbied by a casino coalition, might they perceive the movement as more "sinful" (alcohol + gambling) and therefore farther from the legislative end goal of consumer welfare?
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