Wine History Echoes as Alcohol Rules Outlast Their Relevance
Alcohol Remembrance Fades, But Regulatory Inertia Endures Nearly 100 Years After Repeal.
Two days of remembrance recently passed with very little attention granted from anyone, including the media. While each of the events these days commemorated is consequential in its own way, they are not the same as July 4th and the founding of our country or Thanksgiving, the day of grace and thanks that commemorates the survival of early settlers in America.
December 7th has long been known as Pearl Harbor Day and asks us to remember the more than 3,000 Americans killed in the surprise attack on America’s Pacific fleet in Hawaii carried out by Japan in 1941. It was the event that catapulted America into the deadliest war in history. Our and the Allies’ victory in World War II makes Pearl Harbor Day not only a remembrance of the loss of life, but a recognition of national perseverance and resolve.
However, Pearl Harbor Day was 74 years ago and anyone old enough to remember it with any vividness would be in their 80s. This is to say that this day of remembrance does not hold real significance for most people alive today. The same can be said for VE Day and VJ Day.
REPEAL DAY
The other day of remembrance that recently passed with little or no recognition is Repeal Day, December 5th. This day commemorates the day that Prohibition officially ended in the United States after 14 years of alcohol production and sale being illegal in the United States. While a day far less important than Pearl Harbor Day, Repeal Day does recognize a significant shift in American culture. In fact, it is difficult to find a political event since this moment in 1933 of greater cultural significance. Perhaps 9/11 would qualify, though my sense is that 9/11 replaces Pearl Harbor Day as the event that ignited America’s martial instincts.
Of course, Repeal Day and the end of Prohibition are novel because, to be honest, there is a certain amount of mirth associated with a return to drinking. It’s the same reason most stories about alcohol and drinking that we see outside the wine media usually possess some quality of tongue-in-cheekness (or at least a few good drinking puns)
Repeal Day, like Pearl Harbor Day, held a place in the frontal consciousness of certain people and certain generations’ heads because they lived through Prohibition or lived in timely proximity to the day drinking returned to America. People with this kind of experience are fewer today. Those born in the direct aftermath of Repeal are approaching 100 years of age.
This is also true of the mechanisms that were put in place as a result of Repeal. Here, I’m thinking of the Control State Structure in which the state government and not private individuals control the distribution and/or retail sale of alcohol. I’m thinking of the Three-Tier System, in which a middleman wholesaler is required to be used to bring a product into a state and is the only source of inventory for retailers in a state.
The fundamental restructuring of alcohol sales and distribution in the wake of Prohibition and its Repeal shouldn’t be a surprise. Events of this magnitude tend to bring about significant change. In the wake of the attack on Pearl Harbor, America underwent a fundamental restructuring of the US intelligence apparatus with the National Security Act of 1947, which created the Department of Defense, the National Security Council, and the CIA in order to prevent intelligence failures such as the attack on Pearl Harbor.
100 YEARS LATER—ARCHAIC AND UNNECESSARY INSTITUTIONS
The most interesting and consequential thing about what came in the wake of Repeal is that the structures and institutions described above were meant to prevent a return to the circumstances that led to Prohibition, more than the excesses and mistakes of Prohibition itself.
Prior to Prohibition, the way alcohol was marketed was so uncontrolled and so corrupt that it led in many cases to absurd levels of consumption that harmed people, families, communities, and whole cities. The Three-tier system, the Control State apparatus, and tied house laws were all designed to prevent unconstrained marketing, coercion within the distribution structure, and the overconsumption this led to.
But what’s important to understand today, nearly 100 years after Repeal, is that the social, economic, cultural, and technological conditions that existed prior to prohibition and that supported and allowed the unregulated excesses in the alcohol industry do not exist today and cannot be duplicated today. The alcohol regulatory systems in place today that were designed from 1933 to 1936 were developed to prevent a return to conditions that are impossible to duplicate today. The Three-tier system and the Control State structures are solutions to a set of problems that do not exist today and cannot exist today.
The dangerous pre-Prohibition alcohol regulatory structures that led to overconsumption developed and came to a height during unique circumstances in the last half of the 19th century and early 20th century. One of the characteristics of this period was significant immigration to the U.S. Immigrants settled primarily in urban areas and created unique communities.
It is important to appreciate how important the saloon was to local communities, and particularly to immigrant communities. The tied house saloons, which were structured to encourage overconsumption and vice, were prevalent in urban areas. The immigrant and urban communities largely had no electricity or air conditioning in their dwellings. There was no television, internet, streaming entertainment, or radio. Transportation was limited to trains and streetcars, and there was no auto travel or efficient cross-country travel. However, there was the saloon.
The local saloons acted as the “working man’s club”. Folks went to the nearby saloon to get the news of the day, to find out what jobs were available, to organize politically, to eat their meals, and to commune with their people. And to drink. The saloon, in addition to being a source of alcohol, was also a significant source of community.
Nearly 100 years post-Repeal, none of these circumstances exist. Today we have:
The Internet
Streaming services
Television
Radio
Quick cross-country travel
Automobiles
None of this existed in the 1910s. The saloon or bar is no longer a key gathering place. We no longer go to bars and restaurants to find out the news of the day, or to find a job, or to commune with our friends, or to organize politically. The social, economic, cultural and technological circumstances that led to the three-tier system after Repeal and were meant to prevent overconsumption simply don’t exist today. More importantly, they cannot exist today, and yet the three-tier system still stands, as does the Control State Structure.
I’m not qualified to argue whether the national security structure that came to fruition in the 1940s in response to the intelligence failure that was Pearl Harbor is archaic and needs to be reformed, abandoned, or strengthened. However, the need to abandon the three-tier system and the Control State structure is so abundantly obvious that the only thing that could possibly keep reform from occurring is a familiar marriage of power, money, and politics that is most often the cause of institutional inertia.
I have some thoughts on why and how and to what end the institutions created in the wake of Repeal ought to be abolished
By Tom Wark
Tom Wark is the publisher of Fermentation, a source of commentary on the wine business that he has written since 2004. He is also the publisher of THE SPILL, a free, daily newsletter that curates the best wine content on the web.
There goes Tom again…blaming the system and not fully grasping the important details. Monopolies, oligopolies, & vertical integration and intoxicants shall never mix because that business model threatens public health, public safety & public access. The FAA of 1935 made industry members pick a lane: manufacturer, wholesaler, or retailer. Period. End of discussion. It’s worked for 90 years. If it’s not broke, don’t fix it. Californians take notice: configuring your cannabis industry in the same three-tier framework, instituting trade practice rules and the same anti-trust provisions as alcohol will increase the price of cannabis 12% but open up the other 49 states post federal legalization. Yes, the wine industry has taken a big hit over the years. Yes, there’s not enough distributors. Yes, wine needs regulatory relief. But throwing the proverbial baby out with the bath water isn’t the answer. Be better Tom.