Colorado is one of those states that has made it illegal for grocery stores to sell alcoholic beverages. I am not sure of the history of this state of affairs but I know that it has little to do with the free market and a lot to do with government creation of monopolies. In a free market any person is free to sell anything to anyone at anytime. That is the way it should be. Then some person figures out that he can get career politicians to create laws for him, in exchange for his vote, that will give him an unfair monopolistic advantage over his competitors. Career politicians and their bureaucratic lackeys come rushing in, creating laws and enforcing rules all ostensibly designed to be in the "public interest," whatever that is.
Since politics is now inextricably linked to free market business activities it is inevitable that each election cycle is going to witness competing parties seeking to obtain the favor of the career politicians in support of their cause. Every year that I can recall a group of people has sought to overturn the law that says alcohol may only be sold in government approved liquor stores. They want booze to be sold in grocery stores as well. And every year when this group advocates for more liberal sales of beer, wine and whiskey, the owners of liquor stores and their supporters rise up and declare that proposal to be immoral. It is fascinating to see the same arguments trumpeted year after year. People who make their living selling booze produce commercials telling me that booze is extremely dangerous to use and making it available in grocery stores is going to bring about the end of civilization as we know it as teenagers steal it, drive drunk, kill people and generally ruin everyone's life. On the other hand, grocery store owners and their lobbyists tell us how great it would be if demon rum was more conveniently purchased at the neighborhood grocer. Each casts his argument in moral terms and each vilifies the other.
Michael Mazenko, of Greenwood Village, wrote a letter to the editor of the Denver Post last week in support of the existing law that prohibits the sale of booze anywhere other than in government approved liquor stores. I suspect Michael is either a liquor store owner or closely related to someone who is. Michael attempts to make several logical arguments in favor of his position and that is what I would like to discuss here today. His attempts at rational thought are laughingly absurd and illogical. He serves as a classic example of what passes for a logical argument these days. He is also a fine illustration of the 3rd Welsh Rule of Human Behavior. That rule states, "Never expect a person to understand a rational argument if doing so will cost him some of his money."
Michael's first argument is, "Allowing supermarket liquor sales will decrease choice for Coloradans by putting many independent store owners out of business while creating a beer-wine monopoly of the Big Three grocers." Do you see the two illogical arguments contained in that one sentence? Michael believes that expanding the total number of locations where alcoholic beverages are available is going to decrease the number of alcoholic beverage choices available. The validity of his argument is not immediately apparent. In fact, it is a generally accepted economic principle that greater availability of a product usually results in greater selection of that product, not less. The greater market share and purchasing power a store has the more likely that store will increase its selection of products, in an attempt to garner even more market share. Michael is exactly backwards in his understanding of the economic principle of market share.
Michael rightly believes that allowing grocery stores to sell booze will likely drive liquor stores that are operating on the margin out of business but he wrongly declares that that state of affairs constitutes a monopoly on the part of the grocery stores! The mere fact that sovereign consumers exercise their free choice to purchase liquor from a grocery store, largely because it is more convenient than making a special trip to the liquor store, does not constitute a monopoly. A monopoly exists when the government forbids one group of people from competing with another group of people, not when the consumers choose one group of people over another. The only monopoly that exists presently is the one that forbids grocery stores from selling booze. Government approved liquor stores are the beneficiaries of the present monopoly and they do not want to give that up. Arguing that consumer freedom constitutes a monopoly is an absurd and ridiculous way to try and maintain the status quo.
Michael's second argument sounds like something right out of the Communist Manifesto as he writes, "Supermarkets are not hurting for business, and they do not need to sell everything. Clearly their limited shelf space and narrow purchasing practices will not offer consumers the vast varieties of small craft beers, wines and spirits available in the state's 1,600 independent liquor stores." Somehow an omniscient Michael has determined what supermarkets should be permitted to sell, how much business they should be permitted to have and why they should not be allowed to sell booze. Normally it takes a bureaucracy staffed with thousands of zombies and a billion dollar budget to figure out such things. Where does Michael get the right to determine how much business a supermarket should be allowed to have? How does Michael define a supermarket? What amount of annual revenues makes a market become a supermarket? May a market be permitted to sell alcohol? What if a group of bakers gets together and decides that grocery stores don't need to sell bread? Do they have the right to obtain a government monopoly that forces consumers to go to bakeries for their daily bread? What about ice cream makers? What about candlestick manufacturers? The list goes on.....
Michael also returns to his "greater availability reduces selection" argument when he stupidly asserts that grocery store chains have limited shelf space and narrow purchasing practices when compared to tiny, dark and cramped liquor stores. If any store suffers from the problem of limited shelf space it is small volume liquor stores. Huge grocers, like Wal-Mart, have plenty of space for new products, especially when they are profitable. What planet does this guy live on?
Michael concludes with the powerful assertion that, "Coloradans appreciate the choice offered by individual liquor stores with knowledgeable staff. Supermarkets do not need to monopolize beverage sales, and Colorado does not need a pointless and unnecessary new liquor law." Well there you have it. I am a Coloradan and I have never gone to a liquor store to interact with a knowledgeable staff member, so I reject Michael's first premise. Furthermore, I am unwilling to pay more for my booze simply to have a knowledgeable staff member on site because I will never use him. Let someone else pay a premium for their ignorance of their purchases. Michael's emotional reaction to the proposed elimination of a law creating a liquor store monopoly blinds him to the fact that a monopoly already exits by government fiat. He is right that Colorado, whatever that is, does not need a pointless and unnecessary liquor law. What he does not see is that the law we do not need is the one that already exists.