The amount of red tape in the liquor sales business is legion. It's so bad that apparently our elected representatives don't have any idea of how to fix it.
Lawmakers, Wal-Mart seek to end liquor sales prohibition. Neil Morton, SA Express-News via Houstonchronicle.com ($$$)
By now you know the drill, ChronBlog has decided that they don't want people reading their journalism so I'll just cut out a small piece, and encourage you to go read the rest:
The state's alcoholic beverage code currently prohibits publicly traded companies, such as Wal-Mart, Costco and Target, from selling spirits here. But House Bill 1225 and Senate Bill 609 would eliminate that prohibition and remove a cap on the number of liquor stores one company can operate.
However, those bills would continue to ban operators with mixed-beverage permits or permits for on-site wine and beer consumption from enjoying the same access to the state's lucrative liquor market.
Call this the "Wal-Mart Liquor Monopoly" bill then. Because, in effect, it gives Wal-Mart a huge advantage over the smaller players due to their volume advantage while limiting the access of other high-volume competitors into the market.
The most damning part of all of this? Look at this:
State Rep. Jason Isaac, R-Dripping Springs, introduced HB 1225 last month, but said he was unaware the bill's language wouldn't benefit H-E-B or Whole Foods. And Sen. Kelly Hancock, R-North Richland Hills, who filed companion legislation in the Senate, confirmed his office has started researching the issue.
Remember when Republicans made much fun of Nancy Pelosi for saying "we have to pass the bill before we find out what's IN the bill" in reference to the ACA?
Pot meet kettle.
In the comments to this story many people seem confused why Fiesta & Costco have liquor outlets but Sam's Club and Wal-Mart don't. It's very simple. The liquor stores at Costco are not owned by Costco. They're owned by a company based out of San Antonio called "Western Beverages" and they lease the space. (Full Disclosure: My wife is a former Western Beverage employee). They have to have separate entrances and they cannot sell anything in their store that is sold in the main Costco.
The bigger problem here is the Byzantine system that Texas has set up for liquor sales and delivery. Limiting ownership, the implementation of the three-tier system and many other things make purchasing liquor a chore in Texas. The justification to this goes back to prohibition, and illustrates the fact that Texas is, in fact, a very large part of the so-called Bible Belt.
Anytime you deal with liquor legislation it's very wise to follow the money. There is no legislation in this area that is truly "consumer friendly" as the State's leadership has allowed it's aversion to "sin" to cloud their thinking when it comes to free market principles. This is why you see elected representatives who might otherwise be conservative put forward a stinker of a bill such as this. It's also why Texas' Republican government passed a bill last session which stripped craft-brewers of their local distribution rights, a matter that's still being bounced around the courts.
What I see, in the long term, if this bill passes is a business environment where there is less competition not more. By limiting the market and insulating Wal-Mart from meaningful competition they will eventually use their size advantage to put pressure on smaller companies such as Spec's. Without allowing other major grocers to get involved competition will suffer.
Many will look at this and blame Wal-Mart, which I think is foolish. I'm not a believer in the evil Wal-Mart theory of economics but I do think they are savvy and realize weakness in both politicians and political regulation when they see it. They are then smart enough to take advantage of that weakness and craft an environment that's profitable for them. Who you need to blame are the politicians, both the ones that set up this awful system way back when as well as the ones who are perpetuating it today.
I've written a lot here about the Houston Area Leadership Vacuum and how it imposes itself on our quality of life. It's probably time to take a hard look at the Texas Leadership Vacuum as well. Because, increasingly, the conservatives we elected are acting an awful lot like the Statists we supposedly told to shove off.
