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

By PHILLIP CEASE

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.

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