Alcohol Regulations Never Cease to Amaze
A week ago, Chip Taylor noted a quirk in South Carolina alcohol law: mixed drinks at bars must be made from mini-bottles. A few days later, the Wall Street Journal noted that "Quirky Laws give Yuengling Edge at Home."

"Thanks to quirky state laws, the brewer has been able to hold its own at home," the Journal reports. Nationally, its market share is less than 1 percent. But in Pennsylvania, the beer's share is 13 percent.

It isn't just home state pride that drives people to reach for a Yuengling, however. It is the result of a state law that eliminates the ability of large companies such as Anheuser-Busch to use their market power.

Pennsylvania beer drinkers can't purchase beer in supermarkets or convenience stores, where the big brewers often squeeze small brewers off the shelves. Instead, consumers have to go to beer distributors or taverns. The beer distributors account for an estimated 70% of the state's beer sales, but by law they have to sell full cases, reducing the effectiveness of the big brewers' discounting tactics.

While company executive Dick Yuengling says that the laws "have enabled small brewers to survive," what they really do is enable Yuengling to survive. Other small companies suffer. A person who may want to experiment by trying another small brewer's products is likely to be put off by the $25 required to purchase a case from a distributor, or the extra costs incurred by purchasing from a tavern, where 6-pack sales are permitted.

It also turns out that this is another chapter from the "Fear Wal-Mart" book. Yuengling warns other small companies to ease off their campaign to change the law, citing possible sales at Wal-Mart as a greater threat. (permalink)