Coyote Blog

A few days ago, there was an article in our daily fishwrap that said something I found hard to believe.  It said that the state had initiated a crackdown on unlicensed shipments of wine from out of state at the behest of a letter from the Goldwater Institute.  It even had a picture (at least in the online edition) of Clint Bolick, Goldwater's chief of litigation.

Essentially, most states do not allow or severely restrict direct purchase by consumers of liquor products from out of state.  As usual for such protectionist stupidity, it is claimed to be for the children, but in fact mainly is meant to protect a small, very powerful group of liquor distributors who make a fortune from their state-granted monopoly on liquor wholesaling.  Basically, by some outdated post-prohibition laws, every drop of alcohol in the state must pass through the hands of a couple of companies, who of course extract their toll like Baron's of old with castles on the Rhine.

I simply found it unfathomable that Clint Bolick, a founder of the Institute for Justice (IC) for god sakes, would be pestering the state to more vigorously enforce stupid, outdated, and protectionist licensing laws.  And it turns out I was right.  

Clint Bolick, the Goldwater Institute’s director of litigation, said he sent the state a letter in November 2012 asking it to get rid of a rule that required customers to show up at certain wineries annually in order to get direct shipments to their homes.

Bolick’s letter, which he provided to The Republic and azcentral, said that rule made no sense and would stop Arizonans from joining wine clubs, where wineries send a designated amount of wine to customers each year, sometimes including wines not available to the general public.

“A requirement of annual presence also does not serve any obvious public purpose, given that the purchaser has established age and identity at the time of the order,” he wrote.

Bolick said he met with the director of the department at the time, Alan Everett, who told him the department would start a regulatory review.

So it turns out that Goldwater was trying to ease regulation and make it easier for consumers to have some choice and access to more suppliers.  All good.

But it turns out "regulatory review" means something different to a state regulator.  I suppose it was too much to think that they might have a review to see if their regulations went too far.  In fact, the "regulatory review" seems to have focused on how they could tighten regulations even further.  The result was not the one Goldwater hoped for ... instead of making things easier on consumers, the state went all-in trying to make things even worse for consumers.

Hill said Bolick's 2012 letter made the department question whether the wineries sending club shipments into Arizona were all licensed.

“It was the basis for us starting to ask questions about who is shipping liquor into the state of Arizona that does not hold an Arizona liquor license,” Hill said....

So far, the department has investigated 223 violations at a total of 199 wineries, according to records obtained through the Liquor Department’s website.

Additionally, somewhere between 250 and 300 wineries were found to have not filed their production reports. Once the department receives those, it could cause some or all of those to be found in violation. Some of those wineries, in order to comply with state liquor laws and have their cases closed, might also agree to not ship wine to Arizona.

Customers frustrated that they cannot get their wine shipped anymore are funding a renewed effort to change the state’s shipping laws. Two California-based groups, The Wine Institute and Free The Grapes, said they are work

It is clear that Goldwater, representing consumers, has very little influence on the state agency.  So who does?  Well, you have probably guessed:

Hill said last Thursday the crackdown came at the request of a member of the Arizona wine industry, saying it was an example of government and industry working together.

Ugh, what a happy thought -- government and industry working together to protect incumbents from competition and restrict consumer choice.