DELIBERATE LAWBREAKING LEADS TO HIGHER CONSUMER PRICES …
|| By FITSNEWS || We’ve written previously on how a so-called “free market” liquor bill moving through the S.C. General Assembly is really nothing but a special interest handout – one benefitting some very bad actors.
The good news? The liquor bill is on the rocks …
State lawmakers – usually eager to sell their souls to the highest bidder – have been surprisingly leery of cozying up to the special interests pushing this legislation ( including Maryland-based Total Wine and More). In fact the legislation faces an uphill battle – in part because of legitimate job and revenue concerns associated with its passage, but also in part because this particular company’s reputation has preceded it.
Hell, even one of the bill’s staunchest supporters told us recently, “I don’t care if you rip on Total Wine.”
Total Wine’s business model is simple: Defy state liquor laws so as to maintain an unfair competitive advantage over smaller retailers.
“What they do is, being as big as they are and having as much money as they have, they test the legal bounds of how to do business,” said John Farrell III, vice president of sales for a Minneapolis-based liquor store chain that has competed against Total Wine in Minnesota.
That’s putting it politely …
Total Wine has been referred to as a “bully in a sandbox” in Minnesota, where its competitors have accused it of engaging in “deceptive trade practices.”
A recent trade publication noted the company actually called out smaller mom-and-pop shops “informing them that they were going to put them out of business.”
“Their history is troubling,” a city official told the Minneapolis/ St. Paul Business Journal. “Probably more troubling than any other liquor dealer that I’ve seen.”
Responding to our original article, a skeptical commenter asked us to go into a bit more detail regarding how Total Wine “defies state liquor laws.”
Well, one way the company “games the system” is to manipulate the price and availability of certain “proprietary” products.
“Total Wine has some wines marked up more than 400 percent with the majority of these proprietary labels marked up around 140-150 percent,” explained Brenda Visnovec, president of the Minnesota Municipal Beverage Association (MMBA), in a recent newsletter.
In Minnesota – as in South Carolina – any wine brand carried by a wholesaler must be made available to all retailers who ask for it.
According to Visnovec, Total Wine gets around that requirement by “(overinflating) the retail prices of these (proprietary) products while selling other items at or below cost.”
In South Carolina a company called Liquid Culture brings in Total Wine’s “proprietary” products. Rather than make these products available per state law, the company has done the math and decided it makes more sense to incur the occasional fine from the S.C. Department of Revenue (SCDOR) – which enjoys a cozy relationship with its Palmetto State lobbyist, Baylen Moore.
The result? Artificially inflated prices on consumers – like $5.00 bottles of wine selling for $14.99.
Were these products available in mom-and-pop liquor stores – or grocery stores – they would likely sell for $7.99. Medium-sized liquor stores could probably even sell the wine for less.
But that’s not happening because the law is being deliberately ignored.
Both small and mid-sized liquor retailers have told FITS they are “waiting patiently” for SCDOR to start enforcing the law.
“Imagine the cost of wines in South Carolina dropping to reasonable prices simply by the state enforcing its liquor laws,” one Beaufort, S.C. liquor store owner told FITS. “If that were to happen, the hundreds of wines they sell at a 150-400 percent markup would be available to consumers at much, much lower margins.”
We’ve said repeatedly that we don’t believe government should be in the liquor regulation business. In fact if it were up to us, there would be no government limits on the number of wine licenses certain companies could receive – nor would there be any mandates on which products manufacturers, wholesalers or retailers could produce, distribute or sell.
We’d open the whole damn thing up, personally … (which, by the way, is the exact opposite position of the mid-sized retailers we’ve been accused of shilling for on this bill).
But if a law on the books is being ignored in such a manner as to artificially raise prices on consumers – and if existing laws are being “reformed” in such a way as to jack those prices even higher, then we’ve got a big problem with that.
That’s neither a free market nor a fair market … it’s a rigged market.
And South Carolina’s market is already far too rigged in favor of special interests like Total Wine.
You have no idea what you’re talking about – but as long as the checks clear…
FITS wants to talk about ANYTHING but the candidate’s big announcement…
FITS has to figure out how he’s going to defend that ugly witch for 1.5 years…while acting like he’s not….
Marco Rubio announcing today…hit piece on way…
Conversing with yourself now? You are stooping to a new low, GT.
I just went online and checked booze prices on Total Wine for Minnesota and SC…same damn prices and comparable to my local package store and Wal Mart…this article makes no sense…
I hate to say this, but this “Red Dot” government protected industry should just be eliminated by allowing grocery and convenience stores to sell liquor. Put a hefty tax to deal with its social consequences and enforcement and be done with it. I believe that is how other states like Louisiana do it.
In some states you can only have so many ‘liquor’ licenses in an area…the owner retains it until he/she sells it…
And put all us family owned Liquor/Wine stores that have been in business for over 30 years out of business. Stores with head quarters out of state take their money out of state. My families money stays right here locally. Which is better for our community?
Those who have invested in the current system should be compensated, but, in the end, the only reason any business should exist is because it provides a market sustainable service. No business should exist merely because of unnecessary government regulations. That waste resources that could be put use use providing needed services.
I thought DOR was owned by the wholesalers and distributors who oppose Total Wine?? How can they be cozy with both? Or is this site also owned by the wholesalers and distributors?
Those with interests in the current system are nice and cozy with state government too. It’s a rigged system as well. Here in Republican Nirvana, let’s get the government out of the liquor business. How about a true free market? I don’t buy liquor or wine at Total Wines. Why? Their prices are too high.
“Here in Republican Nirvana, let’s get the government out of the liquor business.”
But then the Republicans would have to turn their hypocrite cards back in.
” How about a true free market? I don’t buy liquor or wine at Total Wines. Why? Their prices are too high.”
Kudos to your for seeing why the prices are high and what the solution is to lowering them.
Sadly, our masters can’t be bothered with allowing in state plebs the luxury of counseling and/or fun out of a bottle without paying homage to their betters.
We should all be thankful they aren’t taxing the air we breathe yet. So we still have the luxury of free breathing for now.
Wonder if lobbyist Balen Moore and DOR director Rick Reams are tight? You know, those good ole boys stick together right. Someone should check if Moore hunts at Reams’ plantation in the low country.
A young man is sent to the state pen and is put in a cell with an old man.
The young guy asks, “Hey, old man, what are you in for?” The old geezer
says, “Moonshine, boy.” “Huh, old man, was it any good?” “Hell yes, son –
I got one year to the gallon!”