The Michigan Consumer: The Ultimate Battered Dog

I write this piece to the Michigan consumer. I love your state, the people are great, the weather isn’t always the best, but I love the landscape, and you have a lot of Tim Horton’s restaurants. But I am concerned how your government is treating you as a consumer of wine, beer, and spirits. The political class is not only refusing to listen to your demands, it treats you worse by each passing year. It is time the Michigan consumer got active and demanded changes in the liquor system. Below is my explanation of what is going on! Read, learn it, live it, and become active.

Recently, the Michigan Liquor Control Commission announced they were shutting down shipments of wine into Michigan from wine.com. Michigan Attorney General Dana Nessel has been on the warpath against shipments coming into Michigan, going so far as to utilize the 21st Amendment Enforcement Act in federal court against retailers and wineries shipping into the state.

Michigan consumers seem to be frothing at the mouth for products their in-state wholesalers aren’t supplying. According to the Michigan Beer and Wine Wholesalers, one-third of the product coming into the state in 2019 was illegal.[1]

It seems wine.com has made a major impact on consumers as AG Nessel went after them.

The only entity or person that seems happy about cutting off wine.com, is the Michigan Wine and Beer Wholesalers.

In response to the Attorney General Nessel’s action Spencer Nevins, President of the Michigan Beer & Wine Wholesalers Association stated, “We applaud the Michigan Liquor Control Commission and Attorney General Dana Nessel for continuing to hold lawbreakers accountable and protect small Michigan businesses that invest in our industry, create jobs and support our economy.”[2]

I am not sure what small businesses he is referring to because the wholesalers always seem to make general statements that when you drill down into them, are generally without merit.

But one thing is clear, if in fact 1/3 of the shipments coming into the state are illegal as wholesalers claim, then Michigan wholesalers limited supply of liquor products are probably not meeting consumer demand.

When consumers obtain products from unlicensed shippers, the state generally loses out on tax revenue. Instead of working towards a system, which would license these retailers and provide tax revenue, AG Nessel and the political establishment chooses to do the biding of the Michigan wholesalers at the expense of the Michigan tax coffers.

If this was the only folly the Michigan wholesalers committed at the expense of the Michigan consumers, it would be bad enough, sadly it isn’t. Let’s turn to spirts, the State of Michigan runs the spirits distribution system and farms the task out to certain distributors, the main distributor being Republic National Distributing (RNDC). RNDC has a state sponsored spirits distribution monopoly, controlling around 2/3rds of the marketplace.

As their state distribution monopoly wasn’t enough, RNDC obtained tax incentives to build a state-of-the-art distribution center in 2019. Sadly, the new state-of-the-art facility lacked the proper technology and there were major supply shortages. The glitches in the new facility caused shortage of supplies of many popular brands like Tito’s, Captain Morgan’s, and very worrisome for me, Jameson’s. Sure, Michigan hit them with a $3 million fine, but when you already have a government run monopoly, the pain is not as acute. Especially, when the fine amount is $700,000 less than the $3,700,000 in tax credits granted to RNDC by the state.[3] Either way RNDC came out ahead and still preserved its government monopoly.

The Michigan consumers need to take notice and start calling for reforms. The Election is less than a year away and AG Nessel is clearly trying to curry favor with the Michigan Liquor Wholesalers. If she and the political establishment don’t hear protest to reform the system on behalf of the consumers, it will only get worse.

Michiganders you deserve better. Raise your voices and be heard. Your silence is deafening and every year the situation gets worse. If you don’t act, nothing will change, but if you become active, well what can I say, every dog has its day!

 

[1] https://upnorthlive.com/news/local/one-third-of-every-bottle-of-wine-shipped-to-state-in-2019-was-illegal-reports-says

[2] https://www.moodyonthemarket.com/beer-and-wine-wholesalers-association-praises-ag-for-taking-action-against-shipper/

[3] https://www.hometownlife.com/story/news/local/livonia/2021/12/13/state-grants-tax-credits-new-livonia-warehouse/6431352001/