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AMAZON IS COMING FOR ALCOHOL!!!!!!
Certain restrictions apply....
If you are one of those types that get a kick out of seeing folks set their hair on fire, run around in circles, and shout that the sky is falling just line up about any group of alcohol industry types and tell them, “Amazon is coming”.
Nothing freaks out booze industry folks like the prospect of Amazon coming to town. We got a glimpse of the kind of hyperventilating that occurs when Amazon sneezes when an insider Amazon document outlining a bit of legislative spitballing was leaked to the media outlet, Vice. The document, purportedly written at the height of the pandemic in 2020, outlines a potential lobbying strategy aimed at expanding local alcohol delivery, legalizing central warehousing, and lifting caps on alcohol licenses in various states.
From the looks of the various headlines that accompanied stories on the leaked document, you’d think Amazon was proposing 10-year-olds be allowed to drink.
“Amazon Wanted to ‘Unlock’ the Liquor Market by Secretly Lobbying to Change Laws, Leaked Document Shows,” says the Vice Motherboard headline.
“Vice Report Reveals Amazon’s 2021 Strategy to ‘Unlock’ the Alcohol Market and ‘Modernize’ the Three-Tier System”, wrote Brewbound.
To nobody’s surprise, National Beer Wholesalers Association President Craig Purser provided Brewbound with a predictably hysterical take on the leaked document:
“It is concerning that a massive corporation is reportedly hiding behind a special interest shadow group to advance ways to circumvent a safe and effective alcohol ecosystem, including the local retailers that work every day to provide products in a competitive way to American consumers.”
One of the reasons Purser and the reporters come across as pearl-clutchers in their comments and reporting on this leaked document is due simply to it being Amazon they are talking about. As Amazon has grown from an innovative book dealer to a retail behemoth, it seems capable of taking over any industry it sets its sights on and alcohol is no different. To reporters, obtaining this sort of document seems like a coup perpetrated upon the evil empire. To Purser, it seems, well, it seems like an existential threat to beer wholesalers any time the three-tier system is made mention of without requisite genuflecting.
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The document itself, as a basic outline for a lobbying strategy, is fairly uncontroversial, relatively modest in its goals, and well-thought-out.
On local delivery, the Amazon strategy document proposes to create “Model legislation enabling alcohol delivery for all amazon business lines” along with proposed delivery fee structure showing the new revenue available.”
Under the category headlined “Three-tier Modernization” (this little phrase scares the shit out of wholesalers and others) the document proposes the following:
-Raising the caps on the number of lilcenses a chain store may hold through ballot initiatives in two states.
-Pushing for central warehousing of alcohol products in Florida, Illinois and Texas through legislative and lobbying efforts.
Finally, the document notes that in carrying out these various activities, Amazon will work with and rely upon the R Street Institute (a free trade think tank that has criticized the Three Tier System) to help “shape the debate in each state with a series of strategic media engagements, timely research to inform our advocacy tactics, and be the public face of overall reform efforts.”
None of these proposals does anything to actually strike at the heart of the three-tier system. The heart of that system requires differently privileged producers, wholesalers, and retailers to be separately licensed. But most importantly, the three-tier system requires producers to sell only to a state’s wholesalers, who in turn are the only entity allowed to sell to the state’s retailers. None of the proposals in the draft strategy document touch these provisions.
One final, but important, note. Down at the bottom of the original Vice story a statement from Amazon is given that basically notes, “Yeah, that document was created by some folks but it was never implemented as official company policy”:
“It’s common for people at Amazon to put ideas in documents that never make it past the draft stage and are never used to make decisions. The document referenced was drafted in 2020—more than two years ago—and not only was it never approved or implemented, the items discussed in the document are no longer relevant.”
The Brewbound article makes slight mention of this statement but then, like Vice, goes on to write a story that gives every impression the draft strategy memo is official Amazon legislative policy.
Would that if it were. Amazon is a big ship, with lots of moving parts, that turns very slowly. Neither this document nor anything else Amazon has ever done from an alcohol policy standpoint has ever taken aim at the three-tier system. Though I wish it would.
Amazon would certainly have my support if it took aim at eliminating the various state regulations requiring wholesalers to be the only source of products for retailers. Imagine the kind of diversity of products that Whole Foods, Amazon Fresh and every other alcohol retailer could offer if they weren’t stuck having to choose from the pitiful selection of products offered up by the shrinking collection of middleman wholesalers in each state. Imagine if Amazon were to take the slightest action to help change laws to allow alcohol retailers to ship direct to consumers across state lines. The boon to consumer choice would be huge.
For now, all we have are a few breathless headlines, pearl-clutching, and a leaked document outlining an idea that never took hold.