How Your Beer Bought John McCain's $500 Loafers

Uncovering the government subsidies behind Cindy McCain's family fortune

Radley Balko | October 15, 2008

Sen. John McCain (R-Ariz.) has made no bones about his disgust for greed. In the primaries, he contrasted his own record of public service with the private sector career of opponent Mitt Romney, whom McCain derided as a "profit manager." More recently, as the world’s capital markets fell into a full-blown crisis, McCain has struck a populist chord, lambasting the "unbridled greed" that he says drives Wall Street.

Though ostensibly more free market than his opponent Sen. Barack Obama (D-Ill.), McCain (he of the eight houses, 13 cars, and $500 loafers) has never been shy about laying into what he feels are the excesses of capitalism, including the way lobbyists can bribe lawmakers to jigger the system to their liking. The problem for McCain is that the fortune he married into came by way of alcohol wholesaling, an industry that isn’t remotely free market, is awash in excess, and that wouldn’t exist were it not for rigorous system-jiggering from high-powered lobbyists.

When McCain married his second wife Cindy Lou Hensley in 1980, he became one half of a very wealthy household. By some estimates, Cindy McCain’s stake in her family’s Hensley & Co. beer distributorship puts her net worth around $100 million. The Hensley company gave McCain an executive position shortly after he married the heiress, helped catapult him into public office, has thrown heaps of money at his campaigns over the years, and in addition to providing him with a charmed life, has played a significant role in putting him an election away from the White House.

Over the course of his career, media outlets covering McCain have delved pretty extensively into the history of Cindy McCain’s father and his company, as well as the ethical issues McCain will have to face if he’s elected and his wife still serves as the company’s president (McCain generally recuses himself from federal legislation pertaining to alcohol regulation—he won’t have that option as president). But thus far, there’s been little examination of the beer wholesaling industry as a whole. To be blunt, the entire industry is a farce. It’s an artificial, anachronistic, government-created entity that’s anti-competitive and full of lobbyists and special interests. It raises the cost of each bottle of beer you drink, though “Joe Six Pack,” as McCain’s running mate might put it, receives no value for the added cost.

Alcohol wholesalers (in this context, wholesalers and distributors essentially have the same meaning) thrive thanks to what’s known as the "three-tier system" of alcohol distribution, a series of laws that date back to just after the end of prohibition in 1933. The 21st Amendment gives states the power to regulate the sale of alcohol within their borders. Some states decided to assume control of all alcohol sales (they’re known today as control states). Most of those that didn’t adopted laws mandating a state-based middleman between alcohol producers (brewers, distillers, wineries) and retailers (restaurants, grocery stores, liquor stores). There are some exceptions, but generally in three-tier states no one is allowed to buy directly from a producer. Everything must go through a distributor. And while it’s possible to envision a role for a beer or wine distributor in a freer market for alcohol, it’s clear that the industry wouldn’t be nearly as lucrative or prominent as it is today were it not for these protectionist laws.

In the book Strange Brew: Alcohol and Government Monopoly, California State Northridge Professor Glen Whitman explains the origins of the antiquated system. It was put in place largely to appease temperance activists, who still held sway in some parts of the country. Angsty prohibitionists feared what they called "tied houses," bars that were owned by liquor producers. Before prohibition, tied houses, they said, had lured blue-collar workers in with free salted pork sandwiches on their lunch breaks. The salty meal would make the laborers thirsty, at which point they’d purchase alcohol from the bar—leading, the temperance activists said, to decreased production, drunkardness, and all-around moral decay. (According to Whitman, this is also the origin of the phrase, “There’s no such thing as a free lunch.”) A state-mandated middleman, the thinking went, would prevent these devious marketing practices.

The wholesaling industry has thrived ever since. For decades wholesalers have quietly added 18-25 percent to every bottle of beer, glass of wine, and shot of liquor you pour down your gullet. And there's been little resistance to them, for a few reasons. First, wholesalers don’t interact with consumers. They take their markup between producer and retailer, out of the sight of the people whose money they’re ultimately taking. Second, they’re rather powerful. Alcohol wholesaling is a lucrative, concentrated industry that reaps enormous benefits from policies whose costs are spread out across the general public. Which brings up the third reason distribution laws aren’t frequently challenged:  They haven’t had many obvious opponents. Until recently, the only people hurt by the three-tiered system were consumers, and again, the cost per consumer was too negligible, hidden, and entrenched for anyone to notice.

That’s changing. Bulk retailers like Costco and Wal-Mart have waged lawsuits against some of these laws, with mixed success. The popularity of microbrews, niche wineries, and the ability of both to reach consumers over the Internet has also put a dent in the distributors’ empire; wholesalers are among the leading advocates for banning alcohol sales over the web.

But it gets worse. Many states have placed further restrictions within this already artificial market. Some states, for example, give wholesalers exclusive rights to distribute alcohol in a particular region, effectively creating government-enforced monopolies. Other states (including Arizona) have enacted “franchise termination laws,” which make it more difficult for retailers and/or producers to switch distributors once they’ve started doing business with one. Producers and/or retailers get locked in. If they feel their existing distributor is taking too much of a markup, isn’t offering a wide enough variety, or is otherwise performing poorly, there's little they can do. The effect is to squeeze out the upstarts and the competitors. According to Whitman, the number of alcohol wholesalers nationwide has shrunk by 90 percent since the 1950s.

The Hensley company provides a good example of how these laws can hurt consumers. Hensley is the fourth largest beer distributor in the country, one of the largest privately-held companies in Arizona, and holds a 60 percent market share in the parts of Arizona it serves. It also distributes Anheuser-Busch products exclusively. Beer-producing giant Busch began an incentive campaign in the late 1990s aimed at getting distributors to drop the products produced by its competitors. In those parts of the country where a given distributor has a huge, government-abetted market share, such arrangements put the squeeze on the variety of options available to consumers (Anheuser-Bush’s national market share rose five percent during the campaign, to 50 percent nationally).

Alcohol wholesalers put out several arguments to justify their existence. None of them are very convincing.

First, they say that wholesaling provides a convenient bottleneck for the government to collect taxes on alcohol. Given that state governments manage to collect sales tax at the retail level on just about everything else, that isn't terribly persuasive.

Three-tier advodacy groups like the National Beer Wholesalers Association also improbably argue that without their members' careful scrutiny and warehousing, we’d be seeing outbreaks of death and disease caused by tainted alcohol—as if the existence of wholesalers and their markup is all that’s preventing alcohol producers from poisoning their customers. Again, not all that persuasive.

For its next argument, NBWA then employs Frederic Bastiat’s Broken Window Fallacy, boasting that the government-created industry adds 91,000 jobs and effects an impossible $15 billion impact on the U.S. economy. If those figures are accurate, why not require all consumer products to pass through three tiers? In fact, why not add a fourth or fifth tier, too? We could wipe out unemployment! The argument, of course, is preposterous. Without laws mandating their existence, whatever it is that beer distributors claim they generate for the economy wouldn't disappear. That money would merely go to consumers in the form of cheaper beer, wine, and liquor.

The most dubious argument from wholesalers is that because of the potential for abuse, alcohol is different, and therefore consumers and retailers can’t be trusted to buy it directly from producers—and certainly not off the Internet. That argument reeks of posturing because the same wholesalers invoke the mantra of "personal responsibility" (correctly, in my opinion) when they lobby against alcohol regulation in every other form. Browse a few wholesaler trade publications, and you’ll usually find an article lamenting the government paternalism inherent in excise taxes or restrictions on marketing alcohol in the same issue as, for example, an article warning that America will turn into a nation of winos and drunkards if we let Costco or Wal-Mart buy directly from alcohol manufacturers so they can give their customers a bulk discount on booze.

But let’s get back to John McCain. What does the candidate lecturing Wall Street about greed think about the alcohol wholesaling industry? Is it fair? Should government be subsidizing (if not outright creating) an industry by forcing consumers to pay more for alcohol—for which they get little to no added value in return? And who's greedier, the family who exploits that system to amass a small fortune, or the brokers and traders McCain derides for pursuing profits in a free market?

Radley Balko is a senior editor of reason.

Comments

Secret Squirrel|10.15.08 @ 3:05PM|#

"Spanish and Muslim will be added as the second and third official languages of the United States. These languages will be taught in schools from kindergarten on, with classes being conducted trilingually"

TRILINGUAL! Just like Janet Reno!! Learn about Obama's SECRET PLAN to implement BLACK SOCIALISM in America! None dare call it conspiracy!! Time is running out!!

Naga Sadow|10.15.08 @ 3:06PM|#

Hmmm . . . LoneWacko is that you? Your spacing has improved but the craziness is still there.

|10.15.08 @ 3:09PM|#

Okay dokey. 2 questions:

1. Did Reason ever receive any contributions from Coors Brewing Company?
2. Did Coors ever receive any government subsidies?

Secret Squirrel|10.15.08 @ 3:11PM|#

DON'T LET EASTERN MEDIA ELITE LIBERAL NUTCASES LAUGH AT YOU!!!!

Learn the truth about Obama SECRET PLAN before it's TOO LATE! None dare call it conspiracy!!

Naga Sadow|10.15.08 @ 3:12PM|#

I call it conspiracy.

Pham Nuwen|10.15.08 @ 3:13PM|#

Seconded.

SIV|10.15.08 @ 3:13PM|#

Thanks Radley,

Most people outside the industry(and State legislatures) have no knowledge of how this works.I haven't checked all your links but what has always fascinated me is how they decided who to grant the monopoly distributorships.That is handing out a license to print money.

BDB|10.15.08 @ 3:14PM|#

Ok, who is playing "Secret Squirell?"

It's pretty funny.

Doug MacKenzie|10.15.08 @ 3:15PM|#

That's a big bottle of beer, eh?

|10.15.08 @ 3:18PM|#

I call shenanigans on your conspiracy.

|10.15.08 @ 3:24PM|#

Yeah, it's a completely ass-backwards system of bureaucracy... but it's nice work if you can get it. Couldn't fault somebody for taking the position if it fell into their lap.

What would be more interesting is to actually get McCain's opinion on alcohol regulation on record. Heck, if he's willing to, on record, go against his financial interests, it could even strengthen his credentials. Not likely, mind you, just saying that it would.

(Being from Kalamazoo, we know all about how twisted beer wholesaling is, especially in nearby Illinois, and how said laws have affected the largest brewery here from selling its product in the Land of Lincoln)

|10.15.08 @ 3:24PM|#

"I can't believe it! He drank it all!"

|10.15.08 @ 3:28PM|#

Good show Radley Balko!

It's this kind of ire-raising, cat-twirling, pile-driving hijinx that make me enjoy this site so very much.

I LOVE being all riled up! Imma go compile like there's no tomorrow! YEEHAW!

Invisible Finger|10.15.08 @ 3:30PM|#

Jesse Jackson's kids also have a piece of a distributorship and one of those kids is a US Congressman who voted against the bailout until Obama fellated him.

ed|10.15.08 @ 3:32PM|#

alcohol wholesaling, an industry that isn't remotely free market

Is it a failure of character to be forced to work within a system that big government has wrought? Methinks Radley is complaining that McCain is an American. He's blaming the baby for the bathwater we're all drowning in.

|10.15.08 @ 3:43PM|#

All fair comments on the system. However, McCain is not involved with his wife's company and has tried strenuously to keep it that way (attempting to avoid conflicts of interest). His wife inherited the system as it is. McCain couldn't change it if he wanted to. He is a federal senator, and alcohol is regulated by the states.

Yes, the system is poor and disfunctional, but seriously, just what do you expect either McCain to be able to do about it?

Just as an aside, do you also condemn Ted Kennedy because his fortune was made by running alcohol? Perhaps he should be condemned for his ancestor's violation of prohibition? :)

JMR|10.15.08 @ 3:47PM|#

The REAL connection to make is the one between the Vietnamese beer activities of Budweiser and McCain's truly disgraceful & shitty treatment of POW/MIA folks (mostly VERY motivated wives, but McCain and his buddy/best-man Kerry also ignored US intel info on POWs which the MSM refuses to cover).

This stuff, while distasteful, is well documented: "The sum of the secrets McCain has sought to hide is not small. There exists a telling mass of official documents, radio intercepts, witness depositions, satellite photos of rescue symbols that pilots were trained to use, electronic messages from the ground containing the individual code numbers given to airmen, a rescue mission by a Special Forces unit that was aborted twice by Washington and even sworn testimony by two defense secretaries (James Schlesinger and Melvin Laird) that 'men were left behind,'" Schamberg writes. Partisan Republicans know it's true, but nobody wants to hear about it, and even Democrats aren't taking advantage (perhaps in part because of the actions/votes of McCain's buddy John Kerry?). Given the extensive media attention to John Kerry's Vietnam experience, this is hard to understand. But one thing's for sure -- you can get Bud & Bud Light all over Vietnam, which is teeming with beer drinkers.

Mike|10.15.08 @ 3:48PM|#

Bill and Ed,
Where in the article did Radley "blame" McCain. He is critical of the government regulation that creates this windfall for a chosen few, but I don't see where he does anything other than draw attention to some irony in regard to McCain.

|10.15.08 @ 3:52PM|#

Yes, the system is poor and disfunctional, but seriously, just what do you expect either McCain to be able to do about it?

While, as a homebrewer and beer geek, I have a very personal interest in the effects of the three-tiered system, I think from a political perspective one need not differentiate one subsidy/protectionist policy from the next. Maybe McCain can't do anything about beer distribution laws, but as a "maverick" he could step up and speak out against subsidies in general (ethanol, anyone?). It's the entire culture of government protectionism that's to blame and I would think that McCain, as a senator and presidential candidate, could do something about it. He just chooses not to.

voxpo|10.15.08 @ 3:53PM|#

Excellent article. I believe the most important challenge confronting libertarians in the next twenty years is popularizing the truth that free markets are the most feared threat to entrenched big business (Folsom's "political entrepreneurs"). Present, past and future. Now, animate this piece and make it into a cell phone game...

Secret Squirrel|10.15.08 @ 3:55PM|#

"Oil and gas furnaces will be outlawed and all homeowners will be required to install atheist windmills and pagan (Sun God) solar panels."

Libertarians are BLACK SOCIALISTS in disguise!! Beware Obama's SECRET PLAN in disguse!!

|10.15.08 @ 4:04PM|#

Maybe McCain can't do anything about beer distribution laws, but as a "maverick" he could step up and speak out against subsidies in general (ethanol, anyone?).

He has spoken out against ethanol subsidies... one of the reason why Obama is completely massacring him in Iowa polling. McCain's effectively turned a fairly reliable red state into the Heartland equivalent of Massachusetts... apparently they got the message.

|10.15.08 @ 4:10PM|#

He has spoken out against ethanol subsidies...

I stand corrected (at least according to his webpage). I guess when somebody opposes free markets as much as he does, it's easy to forget the few times he actually defends them.

Secret Squirrel|10.15.08 @ 4:20PM|#

DO NOT LET THE STELLA ARTOIS-SIPPING EASTERN LIBERAL MEDIA ELITE LAUGH AT YOU FOR CHUGGING BUDWEISER!!!

Read THE SECRET PLAN before it's too late. SOYLENT GREEN IS PEOPLE!!!

kinnath|10.15.08 @ 4:27PM|#

While, as a homebrewer and beer geek, . . .

Homebrewer and mead geek, glad to meet you.

troll|10.15.08 @ 4:34PM|#

Secretsquirrel, I, the lowly troll, am the only one listening.

|10.15.08 @ 4:43PM|#

Can't resist ... from Secret Squirrel's linkspam:

18. "The Star Spangled Banner" will be redone in a hip-hop version, with the words "mofo" and "bitches" sprinkled throughout.

I mean, right there you got my vote! Gotta go bone up on my "Muslim", now.

BakedPenguin|10.15.08 @ 4:44PM|#

Another one of the few points Carter had in his favor: he re-legalized homebrewing and vinting.

kinnath|10.15.08 @ 4:50PM|#

Another one of the few points Carter had in his favor

Wasn't aware of that, but now I need to tip one in his direction.

Andy|10.15.08 @ 4:56PM|#

This is one of those articles that pushes me closer to the conclusion that certain bureaucracies are so entrenched that revolution is the only option. And by revolution, I mean buying moonshine.

Where's the Beer Baron when you need him?

|10.15.08 @ 4:59PM|#

Where's the Beer Baron when you need him?

I believe he's down at Barney's Bowl-a-rama, sucking like a fox.

|10.15.08 @ 5:15PM|#

Well, I'm operating under the assumption that Obama is a secret Muslim who will sell us out to bin Laden on Inauguration Day and that McCain is a brainwashing victim of the North Vietnamese who will announce that "Today begins Year Zero" during his inauguration speech. . .and things will go down hill from there.

Secret Squirrel|10.15.08 @ 5:17PM|#

16. Any criticism of liberals, women, or homosexuals (including in e-mails and telephone conversations, which will be monitored) will be deemed hate speech, with the perpetrator given community service on first offense, a three-month term in a reeducation center on second offense, and a five-year prison term on third offense. You don't want to know what happens after that. Let's just say that we ain't closing Gitmo, and we're not not going to make it any less fun for the guards, either.

Read the SECRET PLAN!!!

Amakudari|10.15.08 @ 5:22PM|#

What if you criticize them in Muslim?

vinter|10.15.08 @ 5:23PM|#

Time to feed secret squirrel into the crusher/destemmer . . .

Secret Squirrel|10.15.08 @ 5:29PM|#

What if you criticize them in Muslim?

Muslim language specialists will be listening in on the phone calls and reading the e-mails, per George W. Bush's "Patriot Act," which will be strengthened under BLACK SOCIALISM. None dare call it conspiracy!! SOYLENT GREEN IS PEOPLE!! Time is running out!! Black helicopters!!

fyodor|10.15.08 @ 6:17PM|#

Another one of the few points Carter had in his favor

Wasn't aware of that, but now I need to tip one in his direction.

per Wikipedia:

"In the US, when prohibition was repealed with the 21st Amendment, home wine-making was legalised. Homebrewing of beer should have also been legalised at this time, but a clerical error omitted the words "and/or beer" from the document which was eventually passed into law.[7] Thus, the home-brewing of beer remained illegal for several decades.

In November 1978, Congress passed a bill repealing Federal restrictions on the homebrewing of small amounts of beer. Jimmy Carter, 39th President of the United States, signed the bill into law in February 1979, and many states soon followed suit. However, this bill left individual states free to pass their own laws limiting production. For example, homebrewing is still illegal in the state of Alabama."

armchairpunter|10.15.08 @ 7:01PM|#

Wait till folks find out how much they've been overpaying under this socialized medicine plan...

|10.15.08 @ 7:19PM|#

do you also condemn Ted Kennedy because his fortune was made by running alcohol?

No, and I don't condemn old Joe Kennedy for that, either. Prohibition was an abomination, and I will not fault anyone for smuggling booze.

That being said, Joe was a crook who colluded with FDR to push our country from capitalism to fascism, and Teddy is a goddamned drunk who killed a girl and ran away from the consequences.

-jcr

|10.15.08 @ 9:05PM|#

JCR-

My sentiments, exactly.

|10.15.08 @ 9:52PM|#

"The Hensley company gave McCain an executive position shortly after he married the heiress, helped catapult him into public office, has thrown heaps of money at his campaigns over the years, and in addition to providing him with a charmed life, has played a significant role in putting him an election away from the White House."

The Manbeerian Candidate!

|10.16.08 @ 12:22AM|#

alcohol wholesaling, an industry that isn't remotely free market

I love the "diversity" in the "state" liquor stores here in Columbus, Ohio.

The nearest "state liquor" store is owned by a Cambodian/Laotian mix.
The second nearest is in a Kroger.
The third nearest is owned by an Indian. (Ghandi, not Geronimo).
The fourth and fifth are both "black" owned.
The sixth nearest is owned by a Hong Kong Chinese immigrant.
The seventh is owned by some white guys in the Short North.

As a "free-market (alcoholic) libertarian", I am more outraged that I have to pay the exact same price at each of these stores...

The "ghetto store" (corner of Fourth St. and 5th Ave.) gets the exact same price on a 1.75 liter bottle of "Ronrico" as the white-bread suburban Kroger in Grove City- while earning larger profits due to lower property taxes andcrental rates and taxes.

|10.16.08 @ 1:17AM|#

Oh Secret Squirrel,
You thread-jacker, you are wise belong your years. You won me over with the part about the mega-churches having to practice what they preach.

Seriously guys, read the SECRET PLAN, its a hoot!

|10.16.08 @ 8:45AM|#

Do you actually know anything about logistics, transportation, supply chains or distribution? Perhaps Cindy's family fortunes would be smaller without government regulation but the producers and the liquor stores would still need distribution centers, trucks, drivers and logistics without regulation. Yes they could take it in-house, at tremendous expense. In parallel industries, very few producers have chosen to do that.

Tonto|10.16.08 @ 8:55AM|#

How stupid can you be to think Muslim is a language.
Never went to school?

JMR|10.16.08 @ 9:18AM|#

Eldon, the non-monopoly versions of Cindy's empire tend NOT to produce political/mob fortunes...

|10.16.08 @ 10:09AM|#

Eldon:

Distribution centers would exist, but they would actually compete with each other in all areas. There also would be an option of not having to go through a distributor.

|10.16.08 @ 10:22AM|#

Dear Secret Squirrel,

Please get your facts straight and get an education. Muslim isn't a language. This goes to show the ignorance that prevails by people with your closed-mindedness. Please read some facts. Obama is Christian. If he wasn't, then why was their all the controversy over his relationship with his Christian pastor. Get the facts. Get an education.

|10.16.08 @ 10:22AM|#

You jus lost all credability, and respect. Not interested in reading your news or current events ever. That borders on racism. Its mean and hurtful to people of these backgrounds and ethnicities. The comment about Obama was ignorant.

|10.16.08 @ 10:23AM|#

The democrat plan:

Make 20 million illegal aliens legal so they can vote for democrats.

Conservationist|10.16.08 @ 10:26AM|#

Anti-competitive?

I thought we were talking about free markets here. Free markets legitimize anti-competitive actions.

Or do you mean "liberalized" markets? lol

|10.16.08 @ 10:29AM|#

The secret squirell is a foolish illiterate.
The last time I checked Islam is not a language.

teufelchen|10.16.08 @ 10:38AM|#

Frankly, I can't wait for Spanish and "Muslim" to be added as the "second and third official languages of the United States"!!! And even better: for BLACK SOCIALISM to rule this country!

(How xenophopic and absurd can a person be? ask Secret Squirrel, who thinks there is a language called "Muslim"). Puh-leez.

|10.16.08 @ 10:48AM|#

ABOLUTELY TRUE!!!! Having been in the industry and made lots of $$ from it, this industry operates in complete opposition to free market theory[price fixing,exclusive territories,etc.].
Everywhere else in the world, there are no distributors[middlemen] who add 20-25% to the cost of each bottle of beer/wine/liquor. This 3-tier structure came out of prohibition with the implied purpose of decreasing consumption by making prices higher.
All retailers would like to buy direct from the manufacturer but must go thru an exclusive distributor that just adds cost thru extra handling of product as well as additional overhead. Enough overhead that she can have 7 houses, 13 cars and a private jet[$12 million].
Imagine yourself claiming that you are a free market person while benefitting from the opposite-HYPOCRITE!!!!!!!!!!!!!

jmc143|10.16.08 @ 11:29AM|#

Having had to deal with the distributor rules in several states I have seen directly how this is a monopoly or best oligopoly works. Each state has concocted rules that appear to be designed to control alcohol for end consumers but in reality significantly drives up the cost to the "Joe Six Pack". It works surprisingly like a sin tax but rather than the government getting the money from our pocket these distributors and the families owning them pocket it. Being born into one of these families is a basically a guarantee of lifetime wealth much like being born into the nobility in the UK. Importers are also part of this process. It's no wonder that a good number of them exist in and around West Greenwich, CT and White Plains, NY which have some of the highest average incomes in the north east. One need only look at some of the liquor adds.

You can say that the distributor is only doing its job but here are some interesting tidbits that the end consumer may or may not know. Many states require these "distributors" to publish their pricing in a monthly state catalog for the bars, restaurants and retail establishments to buy from. In other words, there is no competition at all. There is no negotiation on price, and pricing is the same regardless of who you buy from. Moreover, some states make the rules more ridiculous such as in CT. where there is no volume discount meaning if you buy 1 case of beer or 1000 cases the price are the same. Which may seem good to protect the small business but it also kills any discounting. In both CT. and RI you can only have 1 liquor license. Although in CT some supermarkets can sell beer and wine they can't in RI. No "franchised" business can buy a retail liquor license, meaning no chain supermarket or store such as Walmart can sell unless they had the license unless they were grandfathered. In Massachusetts, someone can own 3 retailing licenses but when a group attempted to allow supermarkets to sell wine, distributors along with the retailers helped shoot it down. Why? The public reason given was that it would hurt the small mom and pop liquor stores. A less public reason is that the distributors would then be the small fish compared to the national supermarket chains and it would be harder to dictate to them and the markups on wine could go down. At least in MA they allow volume discounting so you can buy same bottle of wine for 1-3 dollars less than in CT or RI.

What does this have to do with the election? I don't know other than the fact that the families who make their money off the importing and distributing of alcohol don't know what it is like for the rest of us. Bad times are probably better for them as people may drink more but I don't think they can relate to us.

A queen once said "Let them eat cake" but nowadays it would be "Let them drink wine".

|10.16.08 @ 12:16PM|#

To "secret squirrel" Muslim taught as a language? Um..yeah. FYI, muslim is someone who practices the religion Islam, the language you are thinking of is Arabic. Maybe you should learn some "Great Britain" before posting your next comment.

|10.16.08 @ 12:19PM|#

Ok folks man up time. all these racial posters need to stop hiding on the internet like a bunch of cowards flappin their lips. go find yourself a group of blacks and express your views. be a man and look them in the eye and talk about "black socialism, muslims, whatever. this country was founded on the principles of freedom of religion, pursuit of happiness. how un-American it is to disparage someone for what they believe. what a bunch of spineless cowards. what happen to real men who spoke their piece in your face. i guess technology is a substitute for having character and "balls" to back up what you lips impart. Losers!!!!

jmc143|10.16.08 @ 12:23PM|#

I guess I should have ended my verbose posting by saying "Queen Cindy would have said 'Let them drink Bud!'".

She probably spent more on her convention outfit than "Joe Six Pack" makes in a year!

|10.16.08 @ 12:27PM|#

*

No one cared about Bush & Cheney's secret plans, so why would anyone care about Obama's?

|10.16.08 @ 12:30PM|#

I agree Mike. Listen, America is the land of opportunity and capatilistic free markets. If these racists really believe that they are superior in every way, then why are they so afraid of loosing control. If you believe in our system then the most qualified and capable will always rise to the top. How about this idea, stop concerning yourself with "secret plans" and how this group or that group is keeping you down. If you are truely superior you will rise to the top naturally. If you don't its nobody's fault but your own. Quit spending all of your energy making excuses and, get to work!

|10.16.08 @ 12:46PM|#

This is just more media support for Obama. Distributors in this case are part of oversight in what is a somewhat controlled substance...alcohol....which is taxed just like gasoline.

BTW...where does Obama's $4 million income come from? has anyone asked? Senators don't get paid that much. Any scrutiny? Hmmmm?

According to your article, then, every middle distributor in in every industry should be eliminated so we can go factory direct, right? Well....what about the jobs created in the middle? Distributors are a vital part of the business chain to keep the money flowing through the whole system...which is our economy.

|10.16.08 @ 12:58PM|#

Where is the news on reporting the MOB's connection with McCain? Try googling "McCain and the mob" and read the history of Hensley taking a fall for the mob and receiving the A.B.Beer distributorship in return. Also curious about McCain asking for "pork" for a library to honor (fmr) Ch.J.Rehnquist....the same guy (as a mob lawyer) that got Hensley off the second time he was indicted. Also ck out McCain's "maverick" impulsive actions that caused over 100 DEATHS of his own military comrades on the FORRESTER....that his dad, as admiral, got him off scott free! It runs deep, "my friends."

|10.16.08 @ 1:45PM|#

Ken:

Nowhere in that article did it say distributors should be eliminated. It about laws granting them monopoly status and the undeserved earnings as a result of outlawing competition.

|10.16.08 @ 1:53PM|#

The "Hensley Cartel", Hmmm! Now that explains a lot.

|10.16.08 @ 2:31PM|#

Muslim is not a language.

Colonel_Angus|10.16.08 @ 3:33PM|#

Fucking funny how many jackoffs are taking secret squirrel seriously. "Muslim is not a language, you racist."

Government controlled beer distributors are just one industry that fucks consumers. We also have tobacco, petroleum, corn, dairy, grain, and pharmecuticals in the same kind of bullshit systems.

"what about your fellow dairy farmers? You're not thinking of them. "
"I'm thinking of them as much as they ever thought of me."

Colonel_Angus|10.16.08 @ 3:35PM|#

Free market is not the same thing as protectionist command market.

Iftikhar|10.16.08 @ 3:49PM|#

Muslim youths are angry, frustrated and extremist because they have been mis-educated and de-educated by the British schooling. Muslim children are confused because they are being educated in a wrong place at a wrong time in state schools with non-Muslim monolingual teachers. They face lots of problems of growing up in two distinctive cultural traditions and value systems, which may come into conflict over issues such as the role of women in the society, and adherence to religious and cultural traditions. The conflicting demands made by home and schools on behaviour, loyalties and obligations can be a source of psychological conflict and tension in Muslim youngsters. There are also the issues of racial prejudice and discrimination to deal with, in education and employment. They have been victim of racism and bullying in all walks of life. According to DCSF, 56% of Pakistanis and 54% of Bangladeshi children has been victims of bullies. The first wave of Muslim migrants were happy to send their children to state schools, thinking their children would get a much better education. Than little by little, the overt and covert discrimination in the system turned them off. There are fifteen areas where Muslim parents find themselves offended by state schools.

The right to education in one's own comfort zone is a fundamental and inalienable human right that should be available to all people irrespective of their ethnicity or religious background. Schools do not belong to state, they belong to parents. It is the parents' choice to have faith schools for their children. Bilingual Muslim children need state funded Muslim schools with bilingual Muslim teachers as role models during their developmental periods. There is no place for a non-Muslim teacher or a child in a Muslim school. There are hundreds of state schools where Muslim children are in majority. In my opinion, all such schools may be designated as Muslim community schools. An ICM Poll of British Muslims showed that nearly half wanted their children to attend Muslim schools. There are only 143 Muslim schools. A state funded Muslim school in Birmingham has 220 pupils and more than 1000 applicants chasing just 60.

Majority of anti-Muslim stories are not about terrorism but about Muslim
culture--the hijab, Muslim schools, family life and religiosity. Muslims in the west ought to be recognised as a western community, not as an alien culture.
Iftikhar Ahmad
www.londonschoolofislamics.org.uk

bob mologna|10.17.08 @ 12:54AM|#

I've given plenty of money to McCain via the Hensley distributorship. It's a racket. As a bar owner I can only purchase from the licensed distributors. My local grocery stores usually sell booze for less than the so called "wholesale" rate, but if I were caught buying from them I'd lose my liquor license. Or if I were having a big weekend and one of my local bar owner friends were to lend me a few dozen cases out of their walk-in, this could also be a career ending event. And to top it all off those stupid bastards send agents out to my bar to try and trick the bartenders into making bullshit technical violations of the liquor laws so they can fine me. Do you reckon I call all the other bars in town (small town) to warn them when I see these cocksuckers? Hell yes I do.

McCain is a carpetbagging piece of shit who only has an R next to his name because that's what the boys in the men's grill at the Phoenix country club told him he needed to have in AZ. R or D makes little difference to me these days but AZ give rise to at least one decent R,l Goldwater. Would that they were all like him.

|10.19.08 @ 2:19AM|#

The author seemed to imply that beer distributors hold monopolies on all beer in their region. The truth is, they only have monopolies on beer BRANDS. Until the glut of consolidations in the last decade, it was Coors vs Miller vs AB distributors, and sometimes a fourth player.

Yes, the three tier system stifles craft breweries because they might not be cost-effective in this system, but the domestic breweries command the overwhelming majority of the market and still compete with each other via price points.

As a person who has worked at the distributor level, I recognize that the system is a little bit antiquated (read: euphemism for STUPID). However, i feel that there are worse things that we have inherited from the thousands of years of human civilization.

|10.21.08 @ 10:31AM|#

I'm surprised the NBWA isn't using their best argument: the additional profit Annheuser-Busch earned from this system helped fund the great Cardinal teams of the mid-60s.

|10.21.08 @ 3:26PM|#

Oh, c'mon. For one, this article is very poorly written. The "counterpoints" to each of the distributors' lobby's arguments are empty and adolescent. "Improbable"? "Preposterous"? These are merely baseless adjectives; the author makes no viable counterpoints.

Listen, aside from regulating the OBVIOUS AND UNDISPUTED dangers of alcohol, the three-tier system makes perfect logical sense. Take, for example, Manhattan. Without a regional distributor with a local warehouse and fleet of trucks, drivers, and other employees, every single brewery would have to spend the money to put all of this in every single reason. The enormous task of getting each retailer's order to the shelves each day all across the country makes the three-tier system a necessity.

Johnny Debacle|10.21.08 @ 4:04PM|#

Re: Lame Article

Read the article. It takes issue with the Govt mandating a three tier system; it takes no issues with regional distributors conceptually.

Take Manhattan for example. Inside that city you can purchase all sorts of goods and food. Somehow, without the Govt requiring a three tier system for each and every one of those goods and foods, somehow, each day Manhattanites are able to go to bars, stores and restaurants stocked with goods and food. That is the point. That and the fact that consumers end up paying extra for alcohol relative to these other goods because some middlemen who may not serve any purpose are required by the Govt to exist for alcohol.

|10.21.08 @ 5:24PM|#

Great article. A large reason for the Inbev takeover of Anheiser Bush was to gain control of their supply channels.

Analysts kept saying that that creating new supply channels for foreign beers into the us market was very difficult. Now I understand why!