Oklahoma liquor laws

[Plutonic Panda]

Putting this here: Forbes Welcome

BTW, someone needs to start a new thread on this. Surprised this isn't in the politics thread.

[Uptowner]

Heeeeyyy that's what I've been sayin

[Plutonic Panda]

lol. . . I think it is time. :P

[Bunty]

I wonder if a beer in a bar is priced cheaper in New Orleans. In OKC, it seems to be around $3.50 for 3.2%. I assume that price will go up if 3.2% beer is abolished.

[jerrywall]

Putting this here: Forbes Welcome

BTW, someone needs to start a new thread on this. Surprised this isn't in the politics thread.

Gee, Forbes writes a pro corporate interest article... shocker.

And why would this need to be in the politics section? Nothing political. Just because people get passionate about an issue doesn't mean it needs to go there. IF that was the case, half the threads on OKCtalk would move there.

[jerrywall]

I wonder if a beer in a bar is priced cheaper in New Orleans. In OKC, it seems to be around $3.50 for 3.2%. I assume that price will go up if 3.2% beer is abolished.

Well, at the minimum, 3.2% beer is taxed at a lower rate than higher point beer.

[BDP]

Gee, Forbes writes a pro corporate interest article... shocker.

Maybe that was an core motivation (who knows?), but it reads more like a pro deregulation article.

[BDP]

I wonder if a beer in a bar is priced cheaper in New Orleans. In OKC, it seems to be around $3.50 for 3.2%. I assume that price will go up if 3.2% beer is abolished.

It's sort of hard to compare markets, because overhead, taxes, and operational costs are factored into the price. I don't see how loosening the laws would really change the price of a Bud Light, though. Deregulating the destribution would probably cause a price reduction, even if they just removed the price fixing among the 5 wholesalers we have now.

[jerrywall]

Deregulating the destribution would probably cause a price reduction, even if they just removed the price fixing among the 5 wholesalers we have now.

How so? Right now, the distributors have to sell to all the wholesalers at the same price. How would enabling exclusivity agreements and variable pricing lower prices?

[BDP]

How so? Right now, the distributors have to sell to all the wholesalers at the same price. How would enabling exclusivity agreements and variable pricing lower prices?

If i understand it right, right now they don't compete on price. If they were put into competition with each other, there should be downward pressure on price. Really I was thinking of putting the wholesalers into competition more so than the manufacturers. Then again, manufacturers mess that up with minimum pricing restrictions. So, yeah, it's a gross generalization based on a basic economics 101 principle that rarely plays out in its pure sense in the real world, but at face value more competition should place downward pressure on prices. But like you said, exclusivity and pricing restrictions enforced by manufactures has much the same effect as price fixing.

[checkthat]

For clarity, the distributors are the wholesalers in Oklahoma's system:

Oklahoma’s three-tier system:
1. Manufacturers, wineries & breweries (suppliers)
2. Wholesalers (distributors)
3. Restaurants, bars & liquor stores (retailers)
Source: ABLE Commission

Oklahoma?s tiered alcohol retail system and pricing methods benefit Okies | Oklahoma Gazette

[BDP]

For clarity, the distributers are the wholesalers in Oklahoma's system:

Thanks. I'll fix it so it's consistent with that.

[jerrywall]

If i understand it right, right now they don't compete on price. If they were put into competition with each other, there should be downward pressure on price. Really I was thinking of putting the wholesalers into competition more so than the manufacturers. Then again, manufacturers mess that up with minimum pricing restrictions. So, yeah, it's a gross generalization based on a basic economics 101 principle that rarely plays out in its pure sense in the real world, but at face value more competition should place downward pressure on prices. But like you said, exclusivity and pricing restrictions enforced by manufactures has much the same effect as price fixing.

The change from an open system though isn't increasing competition. Currently, there's not really price fixing. What it is, is that wholesalers must post the markup across products lines to the state (it's line wide, so wine, beer, liquor), every other month. This is the price the wholesalers must sell to every single retailer for (so all retailers have equal footing regardless of size). Now once all the wholesalers have posted their markup to the state, the state will communicate back what the LOWEST markup is, and any of the wholesalers can match that if they choose, or remain on the original markup bid. So if there is some sort of price fixing, it's a downward pressure one. Since every single wholesaler currently has equal access to products from the manufacturers/brokers, at the same price, there's an incentive for them to provide the lowest markup. So they do compete on price.

Now, going to a franchise system shouldn't change all of that, since they still will post markups, and markups are still line wide. A wholesaler couldn't mark up brand wine A more than wine B. What it would change is availability. We could end up in a system where brand A wine is only available at Action, and brand B wine is only available at Central, etc. Or you get the development of specialty distributors (say, Wine only) who are able to lock in franchise deals by offering the wineries the highest prices, and then they'll have a higher posted markup on wine (remember, they don't HAVE to match the other wholesalers markups - right now it's just in their interest to be the lowest), and they could get away with it if they carried some of the more popular labels.

Basically, removing the open system will reduce the competition between the wholesalers.

[BDP]

The change from an open system though isn't increasing competition. Currently, there's not really price fixing. What it is, is that wholesalers must post the markup across products lines to the state (it's line wide, so wine, beer, liquor), every other month. This is the price the wholesalers must sell to every single retailer for (so all retailers have equal footing regardless of size). Now once all the wholesalers have posted their markup to the state, the state will communicate back what the LOWEST markup is, and any of the wholesalers can match that if they choose, or remain on the original markup bid. So if there is some sort of price fixing, it's a downward pressure one. Since every single wholesaler currently has equal access to products from the manufacturers/brokers, at the same price, there's an incentive for them to provide the lowest markup. So they do compete on price.

Now, going to a franchise system shouldn't change all of that, since they still will post markups, and markups are still line wide. A wholesaler couldn't mark up brand wine A more than wine B. What it would change is availability. We could end up in a system where brand A wine is only available at Action, and brand B wine is only available at Central, etc. Or you get the development of specialty distributors (say, Wine only) who are able to lock in franchise deals by offering the wineries the highest prices, and then they'll have a higher posted markup on wine (remember, they don't HAVE to match the other wholesalers markups - right now it's just in their interest to be the lowest), and they could get away with it if they carried some of the more popular labels.

Basically, removing the open system will reduce the competition between the wholesalers.

Ahhhh, okay. It's still a very small amount of players setting the prices, though. They're basically a cartel, but that is nothing unique to Oklahoma.

[Bill Robertson]

Since Coors is the only thing I really care about I see it this way. Coors not having to make a special Oklahoma beer would be cheaper for them. On the other hand the taxes would be higher. Hopefully it would be a wash for approximately 1% more alcohol.

[jerrywall]

Ahhhh, okay. It's still a very small amount of players setting the prices, though. They're basically a cartel, but that is nothing unique to Oklahoma.

I guess I don't get your point. In product distribution there's always going to be a one or few to many scenario somewhere in the line. If manufacturers sold directly to stores, they'd be the single point of price setting. If there was just one wholesaler, they'd be the single point. As it is, we have 7 or so wholesalers who each set their own price point, and retailers can choose who to purchase from . As it is, they're typically the same price, because no wholesaler wants to be more expensive than another one. But that's downward price pressure, so it's good for the consumer (but bad profit-wise for the producer). I don't think it'd fit the cartel definition at all, since they're not keeping prices UP, they're keeping them DOWN (bidding for the lowest markup).

[tfvc.org]

I have been getting a lot of ads on Twitter from Tap Oklahoma, anyone know who is behind this account?

[SouthsideSooner]

I have been getting a lot of ads on Twitter from Tap Oklahoma, anyone know who is behind this account?

"Oklahomans for consumer freedom" which is funded primarily by Walmart

[tfvc.org]

"Oklahomans for consumer freedom" which is funded primarily by Walmart

Thanks. I knew there was someone with $$$ behind it, didn't know whom.

[Bunty]

Oklahoma beer, wine sales bill comes down to wire in House | Oklahoma City - OKC - KOCO.com

[jerrywall]

Oklahoma beer, wine sales bill comes down to wire in House | Oklahoma City - OKC - KOCO.com

Yeah, at this point I think it's unlikely something will happen this year. To bad reps let themselves get held hostage by corporate interests...

[Bunty]

Yeah, at this point I think it's unlikely something will happen this year. To bad reps let themselves get held hostage by corporate interests...

What's the problem? If I was a legislator, I wouldn't have a problem voting for the alcohol reform bill. I don't have a friend or relative in the alcohol business. But might have a problem, if I had my life threatened or other harm done over it.

[David]

According to a Oklahoman article this morning the senate bill is back on the agenda for the House Rules committee on Wednesday.

[jerrywall]

What's the problem? If I was a legislator, I wouldn't have a problem voting for the alcohol reform bill. I don't have a friend or relative in the alcohol business. But might have a problem, if I had my life threatened or other harm done over it.

There are some problems with the bill. I guess it just depends on where your interests lay. It's less a reform bill, and more a corporate gift bill. It dismantles ABLE (a bad idea IMO). It enables exclusivity agreements, and completely caved in to everything AmBev wanted (you noticed the ads suddenly stopped) and is a giant handout to Wal-Mart (it was basically written by them). One of the more offensive things?

"We spent months negotiating fine details of it," he said. "It represents a broad coalition of people in favor of modernizing the law."

Pft. Find me someone in the liquor industry besides AmBev who was part of that coalition. This bill was kept very secret, and even the committee didn't get a chance to see it until minutes before the vote. It was essentially written by Wal-Mart, and then modified to keep AmBev happy. The roots of this bill was a simpler, streamlined bill which could have easily passed. Instead, we got this bloated bill, half truths, and corporate handouts. It does nothing at all to help the wine and beer industry in Oklahoma, or to help Oklahoma businesses. It does move money out of state real well though.

[TheTravellers]

So is there any chance at all we'll get a decent SQ to vote on or a decent bill passed? By decent, I mean "in the best interests of the people and state, and not a massive damn corporate bill that would f*** up things, just in a different way they are now" with our current crop of (almost) completely horrible, bought-and-paid-for-by-corporations/pandering legislators?