Tennessee is known for many things: country music, Elvis’s Graceland estate, beautiful mountains, and fine liquor. The state produces both moonshine (some of which is now being made licitly) and its own kind of whiskey. Like bourbon, nearly all Tennessee whiskey is made mostly from corn and aged in new charred oak barrels. Distillers in the Volunteer State go a step further and run the liquor through sugar-maple charcoal before putting it in cask.
Tennessee also is a case study in corrupt, consumer-unfriendly alcohol politics. Consider: Jack Daniel’s is an iconic, global brand. The company recently announced a $140 million expansion of its operations, which comes just a few years after a $103 million build-out. More than a quarter-million thirsty tourists come to the distillery each year. Yet, Jack Daniel’s distillery in Lynchburg is located in a dry county. Really. Moore County (population 6,322) generally prohibits the sale of alcoholic beverages by shops and restaurants.
Moore County, it should be noted, is not an oddball. Until 2009, distilleries were permitted to operate in only three of Tennessee’s 95 counties. Perhaps in recognition that distilling jobs are economy-growing manufacturing jobs, the state Legislature lifted the cap to 44 counties.
It is a confounding situation. Every time an effort to make Tennessee’s alcohol laws more consumer-friendly and market-based, a political hullabaloo erupts. Most recently, the state considered making a technical change to its wine law. Under a 2014 statute, grocery stores are allowed to apply for licenses to sell wine as of July 1, 2016. But grocers and wholesalers were unclear whether the law allowed the shops to take delivery of the wine before July 1.
An easy-peasy legislative fix was in order. Instead, everything went bananas.
Rep. Curry Todd, R- Colliersville, moved to amend the bill with a provision that would limit any company from owning more than two liquor stores. Gov. Bill Haslam was annoyed and opponents of the nonsensical proposal accused Todd of being a tool for liquor stores that feared competition from big retailers, like TotalWine.
“This bill is not about protectionism. We’re selling distilled spirits. We’re not selling a piece of candy. As I was in law enforcement, I saw many families ruined with alcohol and drugs. I’ve seen many in jail or put many in jail myself. I had families that dealt with this issue. I have and others. So I know what it does to you.…”
Todd also said that he was not in anyone’s pocket except Jesus Christ’s.
The lugubrious cap legislation was first disapproved, then approved by committee, and now may be headed to the governor’s desk. As an apparent slap at Haslam, some legislators got behind a proposal to expand the number of commissioners on the Tennessee Alcoholic Beverage Commission and give the Legislature a bigger say in their appointments. Oh, then the state alcohol board’s head resigned without explaining why, and the acting director is going to quit soon to join a law firm.
Indubitably, some of the wild gyrations of Tennessee’s alcohol politics are due to religious fundamentalism. Old blue laws forbidding Sunday sales of wine and the display of sub-areola breast flesh in bars remain on the books, and some citizens espouse teetotalism.
But most of the political madness is motivated by something far more base—economic protectionism. Tennessee’s alcoholic-beverage-control regime is chock full of rules that protect various businesses from competition. For example, Section 57-3-806(e) of the code forbids a grocery store located within 500 feet of a liquor store from obtaining a permit to sell wine before July 1, 2017. Additionally, grocers may only sell beer and malt beverages (like Smirnoff Ice). Drinks retailers must go through an onerous process to dump one beverage wholesaler and buy beverages from another, etc.
In describing the Todd legislation, House Majority Leader Gerald McCormick, R-Chattanooga, captured the spirit of much of Tennessee’s regulation: “What we’re doing is we’re limiting competition… We’re not keeping people from drinking. What we’re doing is we’re deciding who makes the money off of it.”
And that, plainly, is the very antithesis of free enterprise and fair competition. In a saner world, the Tennessee Legislature would scrap the ABC code entirely and start anew. But that cannot happen until the state’s citizens demand better.