Michigan: Bring competition to liquor sales

Source: The Detroit News

Editorial

Sept. 13, 2017

Regulators don’t often decide to regulate less. Yet the state liquor commission is attempting to do just that. It wants to open competition in the liquor store industry, and that effort serves well consumers who have suffered under the monopolistic system now in place.

The Michigan Liquor Control Commission proposes to eliminate a rule that limits liquor stores from operating within half a mile of each other. It’s an archaic regulation that’s been in place since 1979, stifling competition and discouraging newcomers from entering the industry.

The commission argues that rescinding the half-mile rule once and for all will clear the muddy waters surrounding liquor license quotas and regulations on distance parameters, which should have been straightened out by a 2016 law governing beer and wine sales at gas stations, but apparently wasn’t.

Why the state government needs to be this involved in the allocation of liquor in the first place is a subject worthy of debate.

Other states are more market driven. But the liquor lobby in Michigan is powerful, and tight state control serves the interests of those who already hold licenses.

If the commission changes this rule, liquor store owners fear new stores popping up around them, or that gas stations will win the right to sell whiskey and other harder beverages.

Indulging the fear of competition is not the smart way to make policy. Store owners are hiding behind the contention that broader availability of liquor will lead to greater alcohol abuse, but that’s specious given how ubiquitous party stores and other outlets are now.

Still, those concerns should be aired during a public comment period. (The commission did try to skip that, and it’s something the current store owners deserve.)

The government shouldn’t be crowding out new businesses in the name of protecting the profits of existing business owners. The market will prove an effective regulator of the density of liquor stores. New business owners aren’t going to open up where there aren’t enough available customers to sustain them.

If a community is opposed to more liquor licenses or stores opening within its borders, that’s a matter for local government to sort out. The state doesn’t need a one-size-fits-all approach to controlling where every bottle of liquor is sold.

The Liquor Control Commission should be applauded for its rare attempt to open the liquor market to more competition.

Lawmakers should not stand in the way.