Coming to the United States “the land of freedom” I
never thought to encounter rules such as blue laws and/or alcohol beverage
restrictions that help create monopoly markets. Last readings and the Thursday
class were a bit of a shock to me so I started reading more on the subject. I realized
that Utah has one of the strictest alcohol distribution and consumption regulations.
A Fox News article explains how these rules make it hard to get a drink in Utah. For
example, you cannot order a drink at a restaurant without having food first, there
are three different license categories for restaurants that allow them to sell
alcohol at a certain time period and specify the kinds of alcoholic beverages
to be served, and wine and beer are only to be supplied by a state-run store
(at 86% markup). Francis Liong, an LA relocate that owns Lamb's Grill in Salt
Lake City expressed that "makes it hard for a restaurant to appease guests
and to make money, too." Not only that but recent regulations require that
new restaurants and bars keep a curtain over the location of alcohol in
restaurants and bars. The justification that the Utah Department of Alcoholic
Beverage Control gives is that
"The purpose of
control is to make liquor available to those adults who choose to drink
responsibly -- but not to promote the sale of liquor,” the department states on
its website. “By keeping liquor out of the private marketplace, no economic
incentives are created to maximize sales, open more liquor stores or sell to
underage persons."
However, as Coppock’s students, we know that the reasoning
behind such restrictions is the rent-seeking opportunities they bring for the
local government and the old-dominant restaurants and bars. These restrictions
exemplify three of Stigler’s types of regulations: control over entry by new
rivals, regulation on related industries (substitutes in this case), and
price-fixing.
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