I just heard a frustrated young man announce loudly into a telephone, “You can’t get a Heineken in Europe! It’s impossible! I couldn’t believe it.”
In other news, you can’t get a Filet O’ Fish at a respected seafood restaurant.
I live in Virginia, where every spirit is bought at wholesale and sold to the public by Virginia ABC (Department of Alcoholic Beverage Control). Virginia ABC turns over roughly $200 million to the state each year.
I’ve found that my favorite spirit, the superpremium Van Winkle Special Reserve Bourbon 12 Yr, sells for $38.95 in all VA ABC stores, which I believe includes the 20% sales tax on spirits. Virginia already has far higher taxes on spirits than most other states, including Kentucky. At any rate, the final price is lower (by at least $5) in Virginia than Kentucky.
Why do I end up paying less for a 750ml of Van Winkle in Virginia than I ever remember paying in Kentucky?
A few possible reasons:
1) Virginia’s ABC has significant monopsony power when buying spirits. By virtue of the fact that ABC can prevent certain spirits from being retailed in Virginia at all, producers sell their goodness at a lower price to the state than they would to a bevy of distributors. Virginia has good reason to “negotiate” lower prices. It allows them to charge their 20% alcohol sales tax without the customer being much the wiser.
2) Virginia’s ABC has significant monopsony power in the location of liquor stores. Perhaps having a Virginia ABC store in your strip mall is an amenity that creates large shopping externalities, large enough perhaps for you to offer cheaper rent. Is ABC is able to get a better deal on rent than independent, licensed stores?
3) No retail distributors means no distributor cut. Cutting out the middleman means distributor rents instead accrue to customers and state government’s coffers.
My memory may be fuzzy, but I recall that a 750 of Maker’s Mark or Buffalo Trace went for $20 in Kentucky (at least at CVS), which is lower than the price I’ve found in Virginia.
Now, I’ll admit, my data are weak (I haven’t compared price lists from Virginia ABC stores and Kentucky CVS drugstores) and my memory is likely fuzzy. Yes, I do plan to investigate further. But what the heck is going on?
Yes, I feel rather silly and naive but it only took me about six months to realize that I was employed in something less than a noble and forthright endeavor. I am not one to speak badly of that which is in the past, so I will simply leave it at that.
So being young and unemployed in America today I know what I have to do: blog about it until someone comes along and bestows upon me a job that I find suitable to my imagined station in life. Clearly.
Well, maybe not. But I am on the job market and am actively pinging several employment sources. So if anyone knows of any economists with exceptionally sharp computer skills, written communication and mathematics skills who are retiring, please do let me know. I am their replacement.
From the excellent blog on the excellent site stats.org comes this plea for greater public safety from our ever-vigilant public health officials:
Dihydrogen monoxide is a persistent environmental chemical, it’s present in most of the food we eat, and absorbing too much of it can cause hyponatremia, a condition where cells lose their salt content, which is associated with congestive heart failure, liver failure, renal failure as well as brain edema (swelling). Acute hyponatremia, which happens when the serum salt level is less than 105 mEq/L, has a mortality rate over 50 percent.
More here, and I highly recommend spending about an hour browsing on stats.org.
Whether the lesson is taught with great wine, street drugs, sex toys or oral contraceptives the outcome is the same. Prohibitionist’s tactics simply do not work and they create many many more problems than they solve.
Today is the 74th anniversary of the 21st amendment to the U.S. Constitution. It’s the anniversary of the repeal of America’s great failed experiment with alcohol prohibition.
Celebrate as you see fit.
The best way to make a weak point is to repeat that point over and over.
Example: My colleague Jacob enjoys a drink now and again. He’s clearly not an alcoholic. But if you show him repeatedly drinking, like so …
… then it looks like he actually does have a drinking problem.
There he goes. Another drink. The man loves a daiquiri, I tell you what. How does he keep drinking like that?
I kinda like it. It’s the perfect beverage for when it’s getting late enough in the day to drink Coke, but not so late that a cup of coffee doesn’t sound bad, but not hot coffee. No, no. Ice-cold coffee.
But it’s not long for this world. Like my precious Royal Crown Draft Cola,
Sales are expected to continue in France and other counties overseas. The drink also is available in Canada.
Do the French simply have more diverse cola tastes than Americans? That’s really hard to believe.
