Booze News: Party Bikes in Rhode Island, Hard Seltzer in Utah

Plus: tasting rooms in Alaska and liquor delivery in Alabama

In states across the country, liquor laws are evolving. Though some states are embracing the need to alleviate the crushing regulatory burden faced by producers, sellers, and consumers alike, they're moving too slowly—while others are moving in the wrong direction entirely. 

In Rhode Island, for example, lawmakers are considering legalizing party bikes—those oversized bicycles for a dozen or so pedalers that often feature a bartender or travel from bar to bar. (They're not too dissimilar from Nashville's party buses, which I wrote about last year.) That's great news for a local motel owner in Misquamicut who spent $30,000 on a party bike his town had greenlighted, only to be "thwarted" by the state's motor vehicle department.

"The party bike couldn't use public streets without a license, but they had no license to give it," the Providence Journal reported this week. "It is too large to be considered a bicycle and too slow to qualify as a motor vehicle."

In Alaska, state lawmakers are pursuing "a wholesale rewrite of the state's alcohol laws," local station KTUU reported last month. One key element of the proposed overhaul results from the so-called "bar wars" that have pitted bar owners in the state against brewers and distillers that operate tasting rooms in Alaska.

The bar owners want the state government to protect them from competition from tasting rooms. They're clearly in the wrong. The government shouldn't protect any business from competition. But, wrong as the bar and restaurant lobby is in this case, it's also powerful. Hence, the proposed "wholesale rewrite" as it applies to tasting rooms—which includes underwhelming improvements such as allowing them to stay open until 10 p.m. instead of 8 p.m., and allowing no more than one new tasting room in communities with at least 12,000 residents—would likely come closer to maintaining the status quo than it would to improving the regulatory climate for producers and consumers in the state. That's one reason, no doubt, that supporters of the bill refer to it as a "grand" or "delicate" compromise.

Some other changes to state booze laws are also pedestrian at best. In New York, for example, state liquor regulators are now allowing movie theater patrons to drink beer, wine, and cider in theaters. This week, a pair of upstate theaters became the first in New York to allow the practice.

"Previously, theaters were restricted to consumption inside a café area adjoining the lobby," the Saratogian reported, noting it took a decade of lobbying for the simple change to take effect. "Or, if the theater had a full restaurant kitchen, theater staff were only permitted to bring beverages to a patron at their seat with a fixed table."

To New York's credit, the state is also streamlining some other alcohol rules. For example, recently installed Gov. Kathy Hochul (D) announced this week that bar and restaurant owners will now be able to buy liquor licenses online, which she noted was a long overdue modernization.

Though slight progress appears to have been made in New York, Rhode Island, and Alaska (cue very brief golf clap), these states' modest deregulatory moves seem downright radical when compared to what's happening in some other states. 

In Utah, for example, a bill that's expected to become law will mean the end of many hard seltzer sales in all but liquor stores. The ban targets seltzers that contain ethyl alcohol—a common stabilizer that's used to help flavor many seltzers and also "soda, mustard and teriyaki sauce"—which amounts to about half the hard seltzers currently sold in Utah, including ones marketed by Budweiser, Coors, Truly, and Vizzy. Those seltzers will now be sold only at state liquor stores.

If the Utah story is ridiculous, news out of Alabama may take the cake. That state's private liquor stores are gearing up to sue the state's liquor regulatory agency, which wants to allow state-run liquor stores to deliver alcohol. As AL.com explains, the Alabama legislature last year moved to allow private liquor stores to deliver some alcohol. That's good news. But the delivery law covers "licensees," and the private liquor stores note the state-run stores—unlike them—don't require licenses to operate. The state-run stores are also not required to pay local sales or liquor taxes, AL.com notes. In other words, the state of Alabama is senselessly in the business of competing with private sellers of the same products, already has an unfair competitive advantage when it comes to such sales, and seems willing to ignore a state law in order to obtain still more of a competitive advantage.

Why do states such as Utah and Alabama continue to sell liquor?

"ABC's more than eight decades of selling liquor has been brought to you in large part by an unholy alliance of lobbyists, government bureaucrats, and religious groups—not to mention the landlords and special interests who collect millions from leasing land and providing other services to support the state's alcohol operation," an op-ed critical of the state's needless involvement in alcohol sales noted last year.

Indeed, the less government involvement in the alcohol market—from production to sales to consumption—the better off consumers and producers are. When it comes to regulating alcohol, kowtowing to special interests—including the state itself—is like putting a Kryptonite Lock on a party bike: no fun.