Liquor

While there was talk of significant reform on Minnesota's liquor laws this year, instead, we got a few important changes. But first, we had to fend off a new oligopolistic regulatory regime and then avoided new taxes on out-of-state wine. 

DFL Commerce Chair Zack Stephenson worked with all the power brokers in the state liquor industry, namely, the distributors, the manufacturers, the Teamsters union, the Municipal Liquor Stores' lobbyists, and the commercial retailers' lobbyists. Their goal was to enshrine their preferred regulations into an advisory committee that threatened to freeze their regulations into place and make it even more impossible to make changes to Minnesota's liquor laws. The advisory committee would be overseen by the executive branch, which currently has little role in creating liquor regulations but instead enforces it and collects taxes. Legislators serving on this board would have only have had a non-voting role. 

Stephenson argued that this did not preclude legislators from disregarding the board's recommendations, but Republican Legislators picked it apart on the house floor, and many voted against it due to this provision alone when this version of the bill was on the house floor.

Another provision would have set up a new taxing regime for out-of-state wine. Minnesota wineries have complained that their wines face higher taxes when compared with the cost of ordering wine from out of state. But rather than lowering the taxes on Minnesota wines, this bill created a new taxation and enforcement regime to apply to out-of-state wine shipping, with some of the new tax revenue going to pay for the new system. It was a tax merely to "level the playing field," not because the state needed the money. This was simply a money grab tax increase in a time of surplus.

The senate was unwilling to take either of these provisions. And the bill held on to several positive provisions, such as allowing beer sales at town ball games and allowing bigger craft breweries to sell growlers in their tap rooms. There was also some easing of the packaging restrictions on craft brewers on the container sizes they can offer. 

Liquor is still overregulated in Minnesota to the extent that it contrasts with surrounding states. It took decades to have Sunday sales of alcohol simply because none of the special interests thought they would benefit. Minnesota is the only state where only 3.2 beer is allowed to be sold in supermarkets and convenience stores. Nobody even wants to produce 3.2 beer anymore!

But the problem isn't with what the legislature is doing. It's that the legislature can't stand up to all of the special interests that are involved. These interests are too powerful in this sector. Their influence extends to both democrats and republicans. They may not admit it, but legislators use euphemisms to explain this by talking about "needing all the stakeholders on board" to change a law. The legislature owes it to the people of Minnesota to examine this influence and see if it balances with the interests of consumers and taxpayers. It may not seem that important compared to health care or public safety. Still, it's just a more extreme case of the undue influence of lobbyists to shape the regulatory environment for their ends, not Minnesotans.

An example of this was a bill by Rep. Jeremy Munson that would have allowed a wine bar in his district to do off sales of wine. The entire city council of Madelia, where the bar was located, signed a letter indicating that they approved of this exception. Still, because the city had a municipal liquor store, the lobbyist for the association of municipal liquor stores lobbied against it. As a result, chair Stephenson refused to hear the bill in the commerce committee.

Rep. Munson offered the bill in amendment form to the omnibus liquor bill. However, it was voted down by the House.