At the end of the day do higher priced goods or services negatively impact your decision to buy? That is, would a higher price on something you desire dissuade you from purchasing it? If current gas prices are an indication of "consumers'" insatiable appetites to imbibe regardless of cost then I'd have to say no. Accordingly, any strategy that employs a price increase tactic in an effort to reduce consumption will ultimately fail.
But for the last 75 years the state of Washington figured that a fixed markup and no discounting would curb alcoholism. By taking advantage of the 21st amendment to the constitution which repealed Prohibition (the 18th amendment) and gave states control of the distribution of alcohol within its borders, Washington state has long mandated the distributors sell wine to retailers at uniform prices and at a minimum 10% markup. What's more, producers also must charge a minimum 10% markup to wholesalers. What's more, Washington also mandates that delivery of alcohol must originate from wholesaler warehouses directly to each individual retailer. For large volume and multiple location retailers, this law means it cannot negotiate with wholesalers for volume discounts on beer and wine and impacts costs through inefficiencies that could be improved through centralized distribution. Washington's ludicrous liquor laws don't end there, either. For example, it mandates that wholesalers charge the same price for delivery to all retailers regardless of location.
And for the country's largest wine retailer, these laws are worth fighting against. So earlier this year the Washington-based giant Costco, with its $600 million in annual wine sales, filed suit against the Washington State Liquor Control Board asserting its laws restrain trade and eliminate the free market. It argued that the state's regulations were anti-competitive and in violation of the federal Sherman Antitrust Act.
The Costco case is another chip in the weakening armor of arcane state liquor laws and States' rights outlined in the 21st amendment. Last year, a Supreme Court decision found state liquor laws in Michigan and New York unconstitutional and therefore paved the way for wineries and producers to have the ability to sell and ship directly to consumers and retailers, the latter of which was originally part of the Costco suit until a U.S. District Judge found Washington's law prohibiting producer to retailer sales unconstitutional using the Supreme Court Decision as a precedent.
Article comments
1 - anonymous
the 19th amendment was giving women the right to vote.
the 18th amendment was prohibition.
2 - allan Karl
ahhh. thank you anonymous. a slip of the keyboard and the typo made it through the blogcritics editors even... thanks... I've fixed the error and it now reads correctly.