Economic freedom goes hand in hand with individual freedom.
This country’s free economy isn’t as free as many people might think, thanks to some regulatory rules that, generally speaking, serve the public interest and others that serve the narrow financial interests of the rich and powerful.
But new legislation recently signed by Gov. J.B. Pritzker takes a small step in the right direction of encouraging increased competition in a free marketplace.
The beneficiaries are the customers of craft distillers in Illinois.
Thanks to H.B. 2675, signed into law Aug. 28, small craft distillers have the same authority that wine and craft beer industries enjoy to sell more of their products directly to consumers in restaurants, bars and stores.
Depending on the license format, the new law permits these small distilleries greater flexibility. Under a new Class 1 license, a manufacturer that produces up to 50,000 gallons of spirits annually can bypass liquor distributors and directly sell a maximum of 5,000 gallons to retailers and consumers.
Under a new Class 2 license, those who manufacture up to 100,000 gallons of distilled spirits a year would be able to sell their products only through distributors. However, Class 2 license holders may operate a distillery pub and sell up to 5,000 gallons for on- or off-premises consumption.
Former Gov. Bruce Rauner signed legislation giving this freedom to small beer and wine producers. Why not give the same flexibility to distillers.
The Illinois Craft Distillers hailed this legislation when it was introduced earlier this year, predicting that it has the “potential to change the financial future” of craft distillers in this state.
That’s putting it mildly. Giving small distillers the opportunity to market directly to consumers, rather than working through the three-tiered alcohol and beer distribution format, is the equivalent of taking one’s foot off another’s breathing tube.
There can be no better example of the possibilities than the explosion of the craft beer industry, which in a relatively small amount of time has grown into an economic powerhouse that grabbed the attention of major brewers like Anheuser-Busch and Miller-Coors.
The Craft Distillers’ Association reports that it has at least 19 members that cover the entire state. Most are located in the Chicago area, but they also are located in Peru, Columbia and Peoria.
Craft distilling — like craft brewing — is a national trend, one that reflects changing consumer tastes and the irresistible interest of consumers to try something new. How else can one explain the existence of less than 100 craft distillers in 2002 and nearly 2,000 in 2018.
At the same time, this legislation also reflects the economic control that large producers, distributors and retailers have over the marketplace.
What kind of interest does this kind of intense regulation of production of beer, alcohol and wine have other than allowing the big guys to keep the little guys out of the competitive marketplace?
The marketplace is, assuming it’s working properly, dynamic, meaning it creates opportunities for individuals with ideas and the energy to start a business.
Strangling new businesses in the crib so that already existing businesses don’t have to compete is no way to build a vibrant, job-producing, economy-expanding marketplace.
The distillery legislation is but one example of how unwise government regulation serves some narrow interests, but not the broad public interest. Readers should keep that in mind next time they patronize a brew- or distil-pub.