Thursday, September 25, 2014
New Hampshire, the Control State People Like
Lately, much attention has been paid to the U. S. Treasury Department's Tax and Trade Bureau (TTB), the principal federal regulator of alcoholic beverages. TTB is important, but alcohol regulation is mostly a state enterprise. The 21st Amendment created a limited exception to the Constitution's Commerce Clause. The fifty states have much more freedom to regulate alcoholic beverages than they do any other consumer products.
At the most fundamental level, the fifty are divided into license states (33) and control states (17). Washington recently changed teams. Pennsylvania may follow. Whenever a state talks about changing, it is from control to license, never the other way around.
In control states, state government directly controls some aspect of the industry, usually by functioning as the sole distributor for alcohol products. Each state is a little bit different. In some states, the government operates all of the retail outlets too. Often they set prices. There is no competition.
Control state residents frequently complain about high prices, limited selection, insufficient and inconvenient outlets, extremely limited hours, and indifferent service. In every control state, that is, except New Hampshire.
Admittedly, the sample size for this survey is extremely small, but it came up several times when I was there last weekend. Folks in New Hampshire seem to like their state system. What's more, they're proud of it. They brag about how they have stores on the interstates and in the Manchester airport. Prices are low because they don't charge sales tax and they have good sales. They don't necessarily carry everything but special orders are easy. If enough people ask for something, it goes into regular stock. They actually listen and respond to their customers.
The New Hampshire Liquor Commission operates under the name New Hampshire Liquor & Wine Outlet stores. It positions itself like a big, liquor store chain, not a government agency. Some stores are designated as Specialty Wine Stores, Expanded Wine Selection Stores or Specialty Spirits Stores. This statement is from their website:
"Over the years, New Hampshire residents and those from surrounding states for miles around have chosen to shop for their wine and spirits at our conveniently located New Hampshire Liquor & Wine Outlet stores. This has not happened by accident, but by design, as the State Liquor Commission aggressively pursues a strategy that provides you with the best possible value and the most pleasant shopping experience."
Because New Hampshire is such a small state, its residents are very aware of how things are done on the other side of their borders, including the international one. Their system seems to work well for consumers and for the state's legitimate interests in diminishing alcohol abuse.
Nice place, New Hampshire.