Oddball State Agency Micromanages Liquor Retailing

Managing a large retail chain like Wal-Mart or Meijer is a complicated business. A tiny part of it involves the coordination required for chain-wide promotional pricing campaigns on particular products. One can imagine that memos to store managers would sometimes be part of the routine, along with countless other details.

If the letter was a memo sent by a retail chain headquarters to the store managers, it would be an entirely unexceptional matter of business routine, of no interest to any normal person.

One such letter (read it here) was not circulated within a private-sector retail chain, however, but by a Michigan government agency — the Liquor Control Commission, empowered to be the wholesaler for every bottle of distilled spirits sold in the state. Also, this government agency imposes a minimum shelf price on every bottle sold.

Think about that for a second: Why in the world is the government of the state of Michigan involved in the details of Christmas holiday marketing promotions related to retail liquor sales?

This letter is not unique — the LCC undoubtedly communicates with its agents on countless minor procedural and pricing details. As any Wal-Mart or Meijer's manager will tell you, there’s a lot of detail involved in distributing and marketing retail products.

Not unique, but the fact that the letter is from a government agency within the United States of America makes it bizarre.

Finally, unlike those retail chains, this government outfit is a monopoly, with no competitors forcing it to be efficient and focused on maximizing value for consumers. In essence, the state of Michigan runs a Soviet-style state wholesale monopoly for a nearly $1 billion retail market.

That's bizarre.

For more on state liquor control see the essay “State Pours Interference on Liquor Business” and the video “Convoluted Distribution Laws Hurt Local Craft Brewers.”

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