Government Regulation of the Alcohol Industry: The Search for Revenue and the Common Good

Government Regulation of the Alcohol Industry: The Search for Revenue and the Common Good

Government Regulation of the Alcohol Industry: The Search for Revenue and the Common Good

Government Regulation of the Alcohol Industry: The Search for Revenue and the Common Good

Synopsis

This is the third book in what the author calls his "sin" trilogy: the gambling, tobacco, and alcohol industries. Similar to the gambling and tobacco industries, the alcohol industry is one in which the business and public policy processes are intimately linked. Furthermore, it is a highly regulated industry whose very existence depends upon the will of government at all levels and branches. What all the industries share is that they are viewed as a painless source of revenue for government. The alcohol industry is composed of three segments, namely beer, distilled spirits, and wine, each with a distinct product and market. Since the end of Prohibition, public policy makers have developed a certain "tolerance" for alcohol products, but they continue to grapple with the question of how to deal with the "alcohol" problem. While the author updates the current structure and strategies of competition among these industries, his primary rationale for doing so is to analyze how these industries react toincreased public scrutiny of their business activities. The other unique feature of this book is its emphasis on how public policy measures affect the sale of beer, distilled spirits, and wine at the state level.

Excerpt

This book is the third book in what has been termed by colleagues and friends as my "sin" trilogy. Although my previous two books have been about the gambling and cigarette industries, my interest in the alcohol industry is not a recent phenomenon to add another "sin" to my resume but goes back nearly ten years. Like the gambling and cigarette industries, the alcohol industry is one in which the business and public policy processes are intimately linked. They are highly regulated industries whose existence depends upon the will of legislatures. Besides their slightly naughty reputations, the other feature that these industries share is that they are viewed as a painless source of revenue for all levels of government.

However, the alcohol industry does possess two unique characteristics that separate it from its "sin" cousins. First, it is composed of three industries or segments: namely the beer, distilled spirits, and wine industries. While each of these segments has a distinct product and market, public policy makers are faced with the question of how to deal with the "alcohol" problem. Yet, ironically, in most states, each segment is taxed at a different rate and operates under different distribution rules. Second, the alcohol industry has survived a period in which its products were banned, namely Prohibition. After the alcohol industry was resurrected in 1933, public policy makers developed a certain "tolerance" for alcoholic products that the other "sin" industries have failed to achieve although one might make a case that gambling has recently achieved a tolerance level like it has never had.

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