Repeal Post and Hold Alcohol Rules

Beer and wine wholesalers gain, consumers lose

(Editor’s note: These are remarks delivered recently by Michael LaFaive, director of the Morey Fiscal Policy Initiative, to the Michigan Liquor Control Commission.)

Thank you Commissioners. My name is Michael LaFaive and I am director of the Morey Fiscal Policy Initiative for the Mackinac Center for Public Policy.

I am here today to exercise my right to request the partial rescission of two rules, R.436.1625 (1-4) and R.436.1726 (1-2). These are commonly referred to as "post and hold" rules. As you know, these rules mandate posting of price schedules for beer and wine and the holding of those prices for a length of time depending on the product.

Research shows that these rules suffocate competition to the benefit of narrow special interests, such as Michigan's beer and wine wholesalers, and do so at the expense of consumers.

In fact, one working paper published in 2010 and titled, "State Regulation of Alcohol Distribution: The Effects of Post & Hold Laws on Consumption and Social Harms," found that such laws increased price of beer and wine by between 6.4 percent and 30 percent, depending on the product.

I have for each of you the copy of a letter that I have formally mailed to Chairman Deloney, and an essay I published in 2012 titled, "Unnecessary State Rule Enriches Crony Capitalists."

Thank you for your time and attention in this matter.