Thursday, March 05, 2009

End the Protection Racket

The Rochester Business Journal came out strongly this week for deregulating the sale of wine: "Here’s the real question: Is there a compelling reason to preserve the wine-sale monopoly now granted to liquor and wine stores and to wineries? No, there is not."

And the Journal ridicules the "Last Store Standing on Main Street" plea: "The liquor store industry and its supporters have branded their lobbying effort against this provision as the Last Store on Main Street, suggesting that they are the final defense against the demise of small business in New York. In fact, they represent only a very small portion of the state’s small businesses; should legal protection also be extended to the rest?"

As we have pointed out-and this is particularly true of NYC-the most important stores in the neighborhoods are the bodegas and local supermarkets. The local liquor store has no function beyond the sale of wine and hard liquor; while the others mentioned are the linchpin for neighborhood economies and healthy eating.

That doesn't mean that we would want the liquor store to be put out of business; but changes in the law are needed by this niche as well: "Grocery stores should be free to sell wine, period. But likewise, liquor stores should be permitted to sell beer, food items and other products that now are off-limits for them."

The bottom line here is that consumers are the real beneficiaries of a competitive market-something that the Business Journal underscores: "Fair competition brings out the best in superior companies of all sizes. And let’s not forget that it benefits consumers." All small stores are important, but we need a public policy that promotes equity and not any special exemption from fair competition.