Tag Archives: relic of prohibition

New CEI Podcast – October 21, 2010: Relic of Prohibition

Have a listen here.

CEI Director of Insurance Studies Michelle Minton analyzes proposals to privatize Virginia’s liquor stores. Virginia is one of 18 states where the government holds a legal monopoly on the sale of spirits.

Regulation of the Day 56: Kahlua in Ohio

Kahlua contains 20% alcohol in 49 states. But in Ohio, it is 21.5%. Weird, huh?

Turns out regulations are the reason. My friend Jacob Grier pointed me to an article showing that Ohio groups alcoholic beverages into two categories: wine/beer and spirits. Any beverage below 20% alcohol is in the wine/beer category and can be sold in grocery stores. Anything above 20% is classed as a spirit and can only be sold in state-run liquor stores.

Drinkers often mix Kahlua with spirits such as vodka. So the company actually changed its recipe in Ohio to ensure that Kahlua would appear in stores next to its complementary products. The benefit to consumers from this regulatory scheme is unclear.

Regulation of the Day 52: Bar Food

This one comes courtesy of Jacob Grier, blogger extraordinaire and former colleague.

In Arlington County, Virginia, there exist twelve restaurants that are required to sell $350 of food per gallon of liquor sold.

Isn’t that weird?

Stranger still, this gang of twelve voluntarily opted in to that bizarre requirement. They think it works better than what all other Arlington restaurateurs have to deal with – sales must be no less than 45% food, and no more than 55% liquor.

Again, what a strange regulation.

The reason for the switch from a dollar to a volume ratio is that Arlingtonians are developing a taste for more sophisticated – and more expensive – cocktails. Restaurants are finding themselves pushing up against that 55% barrier even without serving more drinks.

Jacob, who has thought about opening his own establishment, adds:

“this kind of regulation is one reason among many that I can’t imagine ever opening a bar in Virginia. It would be much smarter to eliminate ratios entirely and simply require that food is available to patrons who want it.”

Way to encourage entrepreneurship, Virginia.