Some lawmakers want to bottle up competition

April 7, 2017

Inside Insight, Uncategorized

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Sneak attack on liquor stores pops up in budget


Yesterday, during the budget debate, the Senate took up an interesting piece of legislation. Amendment 39 would require any retail liquor dealer that wanted more than three stores to pay a fee “equal to the average gross sales” for each of the retailer’s other locations during the past 12 months. It would ensure that any chain of liquor stores would not be able to profitably operate more than three locations in South Carolina.

This bizarre amendment is a direct response to the South Carolina Supreme Court’s recent ruling that the current laws dealing with liquor store licensing, specifically the limit on a company being able to have more than three retail locations, was unconstitutional. The ruling isn’t surprising given that if you substitute for “liquor store” pet store or clothing store, the premise sounds ridiculous.

A few senators’ knee-jerk reaction was to introduce this amendment to make it impossible for a company to profit from any more than three stores.

Those supporting it kept insisting that not passing it would ensure that mom-and-pop liquor stores would be run out of business by larger retail chains.

Let that sink in.

The same senators that stumble over themselves to offer taxpayer dollars to large, successful corporations (Boeing, BMW, Volvo, et al.) are now concerned about small businesses. Granted, there aren’t many mom-and-pop airline manufactures or car-makers, but the principle is the same. When the government picks winners and losers, through tax incentives, tax breaks, or regulations, someone gets the short end of the stick — and that’s not how free markets work.

If a mom-and-pop shop charges $45 for a product that a large box store sells for $35, the consumer should have the ability to choose between the two. Sometimes the chain store may get the sale, and sometimes the mom-and-pop store will.

Consumers may save money by going to the larger store, but it may take more time and the employees may not have as much expertise as the ones at the mom-and-pop store. Ultimately, though, where people shop should be left up to consumers, not politicians.

The crazy amendment passed after a spirited debate but it still must make it through conference committee with the House, and past the governor’s possible veto. If it fails to make it into the final budget, liquor stores still could have as many locations as they can profitably operate — which should be good news for all imbibing consumers.

Nerve stories are always free to reprint and repost. We only ask that you credit The Nerve.
  • Charles Boone

    Seprate Corperation. Each store stands alone

  • Bill

    Was it a roll call vote? Can you show us who voted for this amendment?

  • Pingback: Update: legislature introduces bazaar amendment in response to SC Sup Crt liquor ruling. – State Supremes()

  • Todd Mozingo

    It might be fair to allow big box chain stores to provide competition to mom and pops if they also had to comply with existing laws in the state concerning private labels. Stores that challenged the 3 store limit violate the laws concerning liquors and wines availability to every retailer in SC. Legally, a SC retailer must purchase product from a distributor. These big box stores get around this law by simply setting up a dummy distributorship and claim to buy product from them, when in actuality the product is shipped straight from manufacture to the retail location. Furthermore, these big box stores use international brands as advertisement at cheaper than cost to lure in customers. Sales associates then try to persuade shoppers to buy their own brand rather than the advertised product. Associates who do not prove a high success rate in this selling model do not last long in these jobs. Loss leaders are not illegal. Many stores do it. The illegal part is that all liquors and wines available to one retailer are required to be offered to all retailers, and this is just simply not the case to the box stores. If we allow them to operate like this, then yes mom and pops need some protections. Another fair question is why would any SC representative choose to help send money out of the state, which is what happens to any money spent at big box stores head quartered out of state.

    • swampland

      If there is a law somewhere that requires liquor stores to buy their inventory from only from distributors and not straight from the distillers, that is a crony capitalism law that restricts free enterprise.

      Apparently, South Carolina’s liquor distributors offer a service that some retailers would refuse to purchase without the heavy hand of government requiring it.

      In America, you know, land of the free, any retail store should allowed to purchase any legal product for resale from any manufacturer or wholesaler willing to make a deal.

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