Wiggy: Legislature Brews Up Interference in Free Market

I have an acquaintance, TJ Buczak, who is a pretty good plumber. Everyone should know a good plumber, right? But what makes this plumber even better than most is that he has put his knowledge of liquids and pipes into a very fun hobby, making his own beer.

Unlike a lot of home brewers, our plumber friend TJ is actually pretty good at making his own beer. I know this because I’ve sampled it. TJ is now at the stage of entering his different types of beer in competitions and, very soon, he will start selling the beer to other people. With any luck, our friend will someday join the sixty commercial craft brewers that make up 5% of the beer market in Wisconsin.

It’s the Wisconsin dream. Frederick Miller. Frederick Pabst. Gottlieb Heileman. Jake Leinenkugel. And now?

Making beer is something Wisconsinites are naturally good at. That’s not surprising considering how much we consume. Heck, legislating in Wisconsin is a two-drink minimum. We even have a baseball team named after the brewing industry in a stadium named for a brand of beer.

Unfortunately, the state legislature may make it harder for craft brewers. The Joint Finance Committee (JFC), in a move designed to stifle competition with MillerCoors from Anheuser-Busch, adopted as part of the state budget changes in the way beer can be distributed in Wisconsin. The biggest change in the law would prevent brewers from owning beer distributorships.

Wisconsin already has an arcane system of rules governing the way beer is sold in Wisconsin known as the three-tier system. Manufacturers (tier 1) sell to wholesale distributors (tier 2) who sell to retailers (tier 3). Most of us then buy our beer from tier 3 rather than the manufacturers or even the wholesalers.

The excuse we’re given for the three-tier system is that it protects competition because the distributors have a vested interest in meeting the demands of the consumers in what types of beer it provides rather than the needs of the manufacturer to maximize market share. The distributors also claim that the system aids in the collection of taxes (something attractive to lawmakers) because of the accountable nature of the system, and the excise tax on beer is collected from wholesalers.

continue at MacIver Institute

Spot on. 

"Too much capitalism does not mean too many capitalists, but too few capitalists." - GK Chesterton