Saturday, April 27, 2013

End, Don't Amend, Liquor Licensing in New Jersey

AJ Sabath, the executive director of Retailers for Responsible Liquor Licensing, has called on his state's legislators to Free N.J.'s Market for Liquor. Sabath notes that "Lack of competition and egregious monopolies have plagued the liquor industry in New Jersey for far too long." He notes that state law allows only two liquor licenses per company, but cites a number of:

[L]iquor giants [that] have spent decades perfecting ways to play the system.... These modern-day robber barons and tycoons hold dozens of licenses by working the system to their advantage.

The state's liquor laws are outdated, he said, and called for revisions to "reflect the times in which we live."

Unfortunately, Sabath's proposed revisions do nothing to rectify the underlying problem:

Current law prevents a company from owning more than two retail liquor licenses. RRLL [Retailers for Responsible Liquor Licensing] is pushing legislation that would increase the number of retail liquor licenses to 10. 
This change would occur gradually over 10 years. Under this legislation, the total number of state licenses would remain the same.

Sabath concludes:

It’s time to “give a heck” about New Jersey consumers by providing good old-fashioned American competition. If Rockefeller and Carnegie were able to survive the dissolution of their monopolies, I think the liquor lobbies will do just fine in the American open market.

My posted comments:

The comparison to Rockefeller and Carnegie is not apt. They built their dominant market positions by successfully competing in the market through productive genius, not by means of legal restrictions on competitors.

The whole point of occupational licensure is to legally restrict competition and protect special interests. It is a formula for monopolies. Why merely change the formula? Why not eliminate liquor licensure altogether? As long as liquor licensing remains in effect, ways will be found to game the system and restrict competition. 

Licensing is also immoral. No one should have to get permission from the government to work in the occupation of one's choice, trade, and earn a living. Alcoholic beverages are a legal product, and any merchant should be legally free to sell them to willing customers.

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