Will Privatization Hurt Craft Distilleries and Breweries?

Will Privatization Hurt Craft Distilleries and Breweries?

Several states have either recently undergone the privatization of alcohol sales or are battling over whether or not to privatize such sales.  The reasons for privatization may be different from state to state, but some of the effects will likely be the same regardless of those reasons, one being the (hopefully) unintentional toll taken on smaller distillers and brewers.

Some of the concerns surrounding privatization include a higher cost of alcohol, as was seen following the decision to go private in Washington state.  Surprisingly, others are raising concerns over public health and safety, pointing to research that shows an increase in consumption following the removal of government from liquor sales.  Of course, an argument can also be made that the state will suffer revenue losses as well, though it is likely that any state will quickly find a new source of revenue to fill any void left by privatization.  While all of these arguments may hold weight, it is the possibility of the suppression of business, especially small businesses, that may be the most overlooked effect.

Craft breweries and distilleries make up a booming industry in today's world, thanks in part to the relaxing of certain laws and regulations in the recent past.  These smaller businesses offer consumers a multitude of choices when it comes to alcohol, and in turn a multitude of choices can lead to lower prices through competition.  However, privatizing alcohol sales creates a danger of actually limiting shelf space for these craft companies.  While more stores may sell alcohol, larger stores will only sell that alcohol which brings in a hefty profit, leaning toward large, well known brewers and distillers and putting shelf space for local and craft companies at a minimum.

Of course, we have an interest in this debate, given that we serve the craft distilling market and have helped many smaller distillers, as well as the large companies, in the past to package their products using our filling and capping machines, conveyors and other packaging equipment.  Still, indirectly smothering a booming local industry does not seem the best course of action under any circumstances, and it seems that, at least in some states, this will be the effect, even if unintended, of privatization.  While we appreciate the business garnered from local distillers, we are also consumers and appreciate the variety of options offered recently by the smaller alcohol producers and distributors.