Michigan's Liquor Isn't Arriving Any Quicker

And it may not arrive at all.

Expect stores in Michigan to continue to suffer alcohol shortages, right in time for the holidays.

Why? Because due to the State's mandated distribution system, when the largest liquor distributor in the state catches a cold, everyone gets pneumonia.

Basically, the distributor consolidated operations, then royally screwed up said operations, and can't seem to do their job as a result. With the way state liquor laws go, there's no way for anyone else to work around it and as a result expect stores and bars to be low on alcohol.

The Detroit News: Fear of liquor shortage sparks concerns among retailers

Logistical issues at Michigan’s largest liquor distributor have led to roughly $65 million in delayed gross sales and tax payments to the state and dwindling supplies at state liquor stores with no guarantee of a fix before Thanksgiving. ...

Michigan employs a three-tier system when it comes to liquor sales. The first tier, licensed manufacturers, sell their liquor to the state. The state, as the second-tier wholesaler, takes orders and distributes that liquor through authorized distribution agents such as Republic National Distributing Company, which warehouse and then distribute the liquor to the third tier: bars and liquor stores.

State law prohibits liquor stores from purchasing from other liquor stores and limits liquor bars who purchase from liquor stores to one case a month. In that sense, retailers are dependent on their distributor, and Republic National is the largest in the state.

Heaven and the Michigan government forbids that we should have a free market in alcohol sales where a single distributor's problems wouldn't be able to disrupt the entire state.

Note that even when the system "works" as designed, I still can't buy Yuengling, or Spitfire Beer in this state for that matter, nor lots of other fine brands up here.

Picking a Bad Day to Quit Drinking - Michigan Dems Pass Anti-Bootlegging Bill in Legislature

Because as the economy continues to be driven over the cliff by the Michgian Dems, they've got time to worry about some good ol' fashioned crimes like bootlegging. Yes, in 2010, Michigan is concerned about Smokey and the Bandit.

The Traverse City Record Eagle: Bill aims at bootlegging liquor

The first question is - is this even a real problem?

Well it is of course importing without taxing some very precious bodily fluids. Which is bad.

The word bootlegging brings to mind images of Prohibition-era gangsters wearing fedoras and smoking cigars.

It's not an issue most people expect to encounter in 2010, but Rep. Bert Johnson, D-Highland Park, begs to differ.

"There are people who are absolutely making a living off of bootlegging," Johnson said. "Not the smart wholesalers or distributors or retail outlets, but the ones that are unscrupulous believe that it's an act that they can participate in, so we want to stop it."

Johnson is the primary sponsor of a bill that would raise penalties for those who sell, deliver or import liquor into the state without going through Michigan's Liquor Control Commission.

A 2008 study by the LCC estimated the average bootlegger brings about $30,000 worth of products over state lines, two to three times a week. That results in a revenue loss for the state of between $1 million and $2 million annually in liquor taxes.

The bill is predicted to earn $9.1 million annually for the state's general fund, primarily from fines of $1,000 to $5,000, depending on the amount of liquor involved. Now, the maximum fine is $1,000.

The bill passed through the Senate and House by votes of 30 to 7 and 77 to 28, respectively.

Of course - this bootlegging is due to Michigan's higher taxes in comparison to neighboring states.

Lance Binoniemi, executive director of the Michigan Licensed Beverage Association, said the gap between Michigan's liquor tax and that of surrounding states adds to the lure of bootlegging.

"We are the sixth-highest taxed state in the country when it comes to distilled spirits," Binoniemi said. "Our tax rate is four times higher than Indiana's, and over three times higher than Wisconsin's."

In Michigan, the liquor tax is about $10.09 a gallon, compared to about $2.68 in Indiana and $3.25 in Wisconsin. That means a fifth of vodka that costs $17.02 in Michigan would cost only $15.54 in Indiana.

The legislators of course don't propose the simple fix to the problem - matching Michigan's alcohol taxes with its neighboring states, causing the entire reason for this smuggling to go away. That would mean losing revenue (actually it would probably lead to more revenue as the liquor would be bought locally rather than smuggled across state lines) and we can't have that!

I suspect the projected $9 million in fines is a tad optimistic - you'd have to catch the Bandit first in order to fine him, and if you haven't been doing so to date, the increased fines won't magically appear once the law is passed.

Midwest bound and down....