The liquor establishment embraces the Flintstones’ economy
An article recently in Beverage Dynamics discussed DTC shipping, and its opposition to DTC shipping did not surprise me, what surprised me was a note from the Publisher endorsing a Flinstonian view of the economy, where progress in technology and customer convenience should go back to the past.
While attacking what was deemed “rogue operators who break the law in the name of consumer convenience”, the publisher utilized Uber and Airbnb as historic examples of why markets should remain closed to enhanced DTC Shipping. Before I even get this point, the publisher forgets that many companies ship DTC and follow the law and are not rogue operators.
The publisher’s note first takes on Uber, as an example of a rogue operator that had negative consequences for society. Specifically, the publisher thinks Uber is a negative development compared to taxi cabs, because there were reported assaults on women by Uber drivers and lawsuits pertaining to this matter are many. Sexual assault is horrendous, and we should do everything to stop this horrific crime. But ride sharing platforms are not the only place where sexual assaults are happening, you can google sexual assaults for taxis and find many instances of sexual assaults.
What we should concentrate on, is doing everything we can to eliminate this horrific crime of sexual assault, whether it is in a taxicab or a rideshare environment.
Why new economy companies thrive
Let’s take a look at what made Uber a player in the marketplace and in many ways replaced the highly regulated and antiquated cab industry. It comes down to a single principle, the customers love the convenience of Uber and demand the service. The service cab companies provided was spotty and often times unreliable. I once had a job interview and wanted to take a cab to downtown Chicago, what happened, the cab never showed up. Another time I wanted to take a cab from White Sox Park to a downtown Chicago hotel, sorry we don’t go anywhere that is below five miles.
The old way of doing business was failing and left customers with inferior service. Cab companies in order to operate were required to have a cab medallion. Medallions are provided on a very limited basis, which meant the supply of taxi cabs was limited and could not meet market demand.
Cabs were also not serving certain communities. Just ask Lenny Kravitz who wrote a song about being a black man and the problems of trying to hail a cab.
Uber also allowed capital that wasn’t being used, drivers that were unemployed or underemployed to be utilized to meet the demand that taxi cabs could not meet.
Next the publisher takes aim at another rogue industry, Airbnb, which he believes caused higher real estate prices and more noise complaints. I am not sure this is true, as an extensive study on this issue, found a small effect on increasing real estate prices.
But remember the reason Airbnb exist, hotels were charging too much for centrally located properties, and some consumers wanted the amenities of a live in space versus a hotel room. Yes, like Uber, Airbnb met the consumers demands.
Why DTC Shipping Exist
So, let’s look at DTC shipping, say you are a resident of Arkansas, which I am sure has a fine wine country. But the residents of Arkansas desire California wines and many of those wines may be from small vineyards they visited in Napa. The Arkansas wholesalers will not carry these wines as it is not economically feasible to do so. DTC shipping allows the Arkansas consumer to obtain California wines not available in its own state.
Likewise, out-of-state retailers may have products for Arkansas consumers that are not available in their marketplace. The fact is simple, DTC alcohol shipping often times expands the availability of products available to the consumer and gives the consumers what they want.
The Problem in Search of a Problem
Instead of providing the consumers what they desire, the industry Flintstonians want to not only prevent growth in this marketplace but want to cut off the marketplace completely. As one wholesaler official indicated, “WSWA (Wine and Spirts Wholesalers of America) is against the shipping of alcohol to consumers.”.
As usual, the common refrain is we identified problems and hence we should shut shipping down. Instead of providing solutions and how to deal with the problems, the Flintsonians solution is to get rid of the industry.
Maybe this would make sense if the Flinstonians were consistent in their viewpoint. In the publisher’s note, local delivery is endorsed as a viable option, even though there have been well publicized incidents of local delivery failing to safeguard against minors’ access to alcohol. In this article it demonstrates that when the California ABC did stings on third-party delivery services, 80% of them failed id checks to age verify.
Shutting down third-party delivery is not the best option, reforming the process to ensure convenience, while at the same time ensuring a safe marketplace is what we should strive for!
As I stated in a recent post, local delivery has less safeguards and more potential for harm than DTC shipping. With these potential problems, it puzzles me why this part of the market is not investigated as stringently as DTC shipping
The goal of any regulatory system should be to open up markets and make the new entries as safe as possible. Getting rid of markets and shutting off new ones because there are problems that exist serves no one’s interest, other than an established few. The facts speak for themselves, consumers want greater choice and greater convenience, that is why markets march forward and not backwards. The goal of the marketplace is to safely facilitate marketplace realities, turning away from this reality takes us back in time to the stone ages, where consumer choice was limited, and customers did not possess modern convenience. DTC winery shipping has done wonders for consumers and since Granholm has led to a doubling of U.S. wineries. Open markets lead to more economic growth and prosperity, the results speak for itself.