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.


Ryan Maloney said...

New Hampshire low price deals are off set by suppliers charging higher prices to wholesalers in neighboring states- MA VT ME. Almost 50% of alcohol sold in NH is bought by MA residents and ME losses 30 million dollars a year to NH. If Suppliers stopped artificially manipulating NH pricing and charged the same price to surrounding states, I think the landscape would look a little different. Even now many of the wine suppliers have stopped whoring themselves to NH strong arm tactics and lower wine prices now reside in MA where competition is actually a reality! In the long haul the consumer wins where private business compete for market share and loses when there is a government monopoly.

Brad Karrfalt said...

Actually the difference in prices between NH and MA is a combination of the higher tax structure in MA coupled with a limited number of distributers. Limited by the state of course.

Then a couple of years ago MA decided to pile a 6% sales tax on top of the already built-in liquor taxes. How did that go over?

Once was a time when any town within 10 miles of the NH border could sell liquor on Sunday, a nice carve out of the blue laws. Sorry Boston. Ironically enough, done away with by a Mormon governor who doesn't touch the stuff.

There was even a time in the late 70's when The Duke sent liquor spies to sit in the parking lots of NH State Liquor Stores and record the license plate of every MA vehicle. The NH State Police did not abide and arreseted them.

NH undsterdands the original meaning of the term "regulation" -- which is to make regular as in flow freely, not restrict. MA not so much, where the spirt of the Puritans lives on. That nagging feeling that someone, somewhere is having a good time.

NH is a great place to live (free). It's just too bad about the weather.

Donald Sink said...

The stores didn't used to be as nice as they are now. Some were little more that a hole in the wall in some of the smaller towns. The NHSLC has been intent on upgrading the entire system, not just the fancy stores on the interstates and in the cities. Prices seem competitive to me, compared to MA, CT, NY and KY (yes, I've been to KY twice). MA recently repealed that 6% sales tax an alcoholic products, just to better compete with the NH stores.

Had a great time at the Hancock Inn last Saturday, Chuck. I would like to see more events like that in NH -- I would find a way to attend. Thank you.

Chuck Cowdery said...

Thanks, Donald. It was fun for me too.

Wojtek Goltz said...

Long story short.
I live in Florida( license state). Now in Mississipppi( controlled stare), because my construction job is here. George county to be precise, that is dry county!
I go to Hattiesburg to get my " nectar"
And the story begin now
Laphroig 18 - 57$. In Florida 120$
Oban 14 - 46$. In Florida 80$
Highland Park 12 - 48$. In Fl. At least 50$
Lagavulin - 69 $. In Fl. 90$ or more
Ardbeg Corryverckan - 69 $. In Fl. not a chance to find it.
Ardbeg Ardbog - 90 $. In Fl. - good luck to find for any money.
Elijah Craig Barrel Proof - 46$. In Fl - good luck to find it for any money.
Buffulo Trace 20$. In Fl. - if you have a luck to get it , not less then 30$.
Elmer T. Lee - 35 $. In Fl. - I do not know, becouse, when left, there were zero bottles of Elmer.
Tax 9%
Choice is limited but it is very easy to deal with owners of liqueur stores. They can order whatever you want.
If whisky is in stock, then you can have it in several days.
If it something less popular...2 weeks, up 2 months.
Some brands like Bruichladdich...they do not have at all.
Anyway...I just drink Ardbeg 10... 42$
PS. All receipt are in my pocket, just for unbelievers ...

Anonymous said...

Where to begin? Living in Maine (control state), there's zero chance of getting anything good unless ordering from my "local", which is limited by what the state allows it to I turn occasionally to NH (also control), which has better prices and selection, but there are oh so many bottlings out there that will never see the light of day in either state :((