FILE - Wine Bottles Cellar

Horizontal rows of wine bottles in a cellar

Americans have always had a mixed relationship with alcohol. We are a nation of prohibitionists and moonshiners, puritans and imbibers, teetotalers and Tom Sawyers. How much regulators should have a say in people's drinking habits remains a live question nationwide.  

Coloradans will soon vote on a trio of ballot measures – propositions 124125, and 126 – that would increase personal freedom and expand consumer choice in the alcohol industry. Upon passage, Prop 124 would immediately allow liquor store owners to operate up to eight locations, an increase from the current limit of three. This cap would be periodically raised until 2037 when it would be removed completely. Prop 125 would allow retailers now authorized to sell only beer to sell wine too, and Prop 126 would allow the delivery of alcohol via third-party services and make permanent restaurants’ ability to offer alcohol for takeout.

These small regulatory tweaks raise a larger question for business and consumer freedom: Is it right for the government to use its monopoly on force – i.e., armed officers of the law – to dictate what private arrangements citizens can make among themselves? Or to consider it another way, shouldn’t you be able to dispose of your property – e.g., your money – as you see fit? I would say one should be able to do business and take recreation freely, provided no third party is unjustly harmed, and Props 124–126 would loosen the government’s hold on Coloradans’ pursuit of both activities.

Several concerns arise from the legal status quo, which will continue if the three propositions are defeated. First off, there is no reason a successful entrepreneur should be unable to open additional stores, serve more customers, and increase earnings (Prop 124). And does the state have a compelling interest in preventing a citizen from purchasing a bottle of wine and a six-pack at the nearby convenience store? There is no societal benefit created in the 10 extra minutes he must drive to another location that has a different type of liquor license (Prop 125). Similarly, there is no harm in a business increasing sales and improving customer service by contracting third-party delivery services, and the citizen shouldn’t be barred from enjoying his favorite restaurant’s signature cocktail in the comfort of his own home (Prop 126).

While the government can justly limit one individual’s freedoms to protect those of another, the arguments advanced against the propositions – largely by self-interested liquor-industry incumbents – show there is no good case for intervention in this instance.

Keeping Colorado Local, a coalition of liquor-store owners opposed to Props 124-126, has a financial interest in seeing the propositions fail – a fact it is open about. “If Proposition 124 passes, large, corporate conglomerates will be allowed to move into Colorado, popping up on every corner and driving out our local businesses,” the KCL says. “Without community stores, we would lose the variety and unique character we’ve come to love by keeping Colorado local.”

Here KCL admits some of its members wouldn’t be able to compete in price or product selection with large retailers. But instead of allowing consumers to weigh their options and decide for themselves between larger businesses and local shops, the coalition wants the state to barge in and artificially prop up one side of the industry.

What’s more, the coalition is likely overestimating the danger posed to smaller stores. BevMos and Total Wines can coexist with numerous small liquor outfits (Americans drink a lot of alcohol). Doubtless, some small stores would fold if Prop 124 were adopted, but many would not. And most importantly, regardless of the outcome, the post–Prop 124 liquor-store landscape would be determined by freer competition and more robust consumer choice than currently exist.

Chris Fine, a KCL board member and executive director of the Colorado Licensed Beverage Association, wrote in a recent op-ed, “We can’t let these big profit-driven companies dictate Colorado alcohol sales and regulations.” This is a gross mischaracterization of deregulation: In a free market, no one dictates where consumers shop. If other Coloradans value small liquor stores as much as Fine, they will continue to frequent them. Coercion occurs when the government steps in to limit consumer choice in service of a special interest. 

The industry incumbents’ desire for an artificially protected market share is no justification for continued government intervention. Propositions 124, 125, and 126, incremental as they are, offer meaningful expansions of Coloradans’ freedom to associate with one another and enjoy their lives as they choose. The alternative is the continuation of crony capitalism. This is a simple choice for the Centennial State.

 

David B. McGarry is a consumer choice fellow with Young Voices. He writes extensively on tech policy and consumer-choice issues. Follow him on Twitter @davidbmcgarry.