Free Colorado’s Liquor Stores from Prohibition-era Rules
February 9, 2010
Colorado unemployment rose back up to 7.5 percent in December. We remain in an economic slump. Gov. Bill Ritter has implemented and proposed a wide variety of net tax hikes and fees. The state budget remains in shambles.
Why, then, is the state’s Liquor Enforcement Division spending precious tax dollars to attack businesses, raise prices and interfere with the free exchange of goods?
The problem is what Liquor Enforcer Laura Harris calls “hidden ownership” between two different liquor stores, as reported by Monte Whaley for the Denver Post. Henry (or Hani) Sawaged owns Daveco Liquors in Thornton, certified by Guinness as the world’s largest liquor store. Henry’s brother Issam owns Davidsons Liquors in Highlands Ranch. (The Sawaged family immigrated from Jordan in 1979, fleeing religious persecution, Whaley notes.)
Whaley describes the allegations: “The Sawaged brothers negotiated the prices of major liquor purchases, signed leases and advertising agreements, oversaw employees and made other decisions on behalf of both stores, even though they were not both listed on the stores’ liquor licenses.”
In other words, the brothers are accused of buying from willing suppliers, selling to willing customers and running their businesses.
Leave it to the bureaucrats to persecute such “capitalist acts among consenting adults” (as philosopher Robert Nozick phrased it).
Why is this even a problem? Colorado law outlaws liquor store chains, meaning the same owner cannot open or help operate a second store.
That’s why there’s only one Daveco, Argonaut, and Applejack, and that’s why you can buy liquor from only a single Whole Foods in the state.
Chains of other types of stores are common, from King Soopers to Radio Shack. Even brewpubs can operate chains. The owners of Boulder’s Mountain Sun also run Southern Sun and the Vine Street Pub in Denver. Rock Bottom runs seven Colorado pubs and is part of a larger chain of brewpubs and restaurants.
So why are owners of liquor stores denied the right to expand to other shops?
Colorado consumers still suffer from legal restrictions coming out of Prohibition. It wasn’t until a couple years ago that liquor stores could open on Sundays. State statute also forbids liquor stores from selling “food items that could constitute a snack, a meal or a portion of a meal.” (They can, however, sell “liquor-filled candy” and “cocktail garnish in containers up to sixteen ounces.”)
No doubt some liquor stores enjoy the statutory protection from competition. Various liquor store owners have also lobbied against proposals to allow grocery stores to sell full-strength beer, wine and liquor.
Who pays for this political war on free-market competition is the consumer and taxpayer. Consumers pay higher prices for less-convenient shopping. And taxpayers pay the salaries and expenses of those charged with micromanaging the liquor industry, like making sure that garnish containers never exceed sixteen ounces.
Competitive business owners also pay a price, because those most willing and able to sell goods to willing consumers are, in many cases, legally prohibited from doing so.
Perhaps it’s time for a sober reexamination of those statutes.
This article originally appeared in the Colorado Daily, February 7th, 2010.