Tag Archives: Prohibition

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Prohibition – Where are we now?

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January 17th, 1920, the 18th Amendment, commonly known as prohibition, went into effect. The Amendment effectively outlawed the manufacture, sale, transportation, or importation of intoxicating liquors across the nation. The change put brewers, distributors, and retailers out of business, increased the scope and power organized crime, and turned hard working Americans into scofflaws.

When Prohibition was introduced, I hoped that it would be widely supported by public opinion and the day would soon come when the evil effects of alcohol would be recognized. I have slowly and reluctantly come to believe that this has not been the result. Instead, drinking has generally increased; the speakeasy has replaced the saloon; a vast army of lawbreakers has appeared; many of our best citizens have openly ignored Prohibition; respect for the law has been greatly lessened; and crime has increased to a level never seen before.
-John D. Rockefeller, Jr. June, 1932

Prohibition, or The Failed Experiment as it came to be known, was eventually overturned 13 years later with the passing of the 21st Amendment. The 21st amendment nullified Prohibition and bestowed powers of liquor regulation to individual states.

With the control of intoxicating liquors many states embraced popular public sentiments, while other states imposed teetotaling regulations that lasted for decades. Mississippi was dry until 1966. Minnesota didn’t allow restaurants to serve alcohol on Sunday until 1967. Kansas didn’t allow alcohol until 1948, and they didn’t legalize public bars until 1987.

Prohibition agents destroying barrels of alcoholSome states and municipalities inserted themselves into the liquor commerce in an effort to encourage moderation and likely maximize revenue. Pennsylvania created the Pennsylvania Liquor Control Board (PLCB) to “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.” The PLCB controls licensing, distribution, storage, sale, and virtually every aspect of commerce related to wine, spirits, and beer in the keystone state. Minnesota didn’t go as far as PA, but the land of 10,000 lakes does have 266 municipal liquor operations. The most recent data available shows some Minnesota Muni stores like Flensburg and Rushford have operated at a loss of over 100k/yr.

So, where we now? Pennsylvania is looking at privatizing their liquor operations. Alabama just became the last state to legalize homebrewing. Kansas only has 13 counties that remain dry. Here in Minnesota consumer still can’t buy liquor, wine, or beer in a store on Sunday.

beer in not a crimeIt has been ninety-four years since prohibition went into effect and Minnesotans are still being restricted by a failed experiment from a bygone era. Every state surrounding Minnesota has Sunday liquor sales. The restriction puts Minnesota business owners at a competitive disadvantage. Possibly the worst aspect of Minnesota’s off-sale Sunday liquor ban is the fact that it punishes responsible consumers for absolutely no sensible reason. The fact that liquor sales are allowed 6 days a week makes it clear that buying liquor is ok. The fact that you can buy liquor in a bar on Sundays makes it clear that the state says it is ok to buy liquor on Sunday. So, if liquor is ok any day of the week, why do we continue the prohibition of Sunday liquor store sales in Minnesota?

The Minnesota Beer Activists have been invited to a Town Hall Forum being hosted by The Republican Liberty Caucus of Minnesota to address Sunday liquor sales in Minnesota. The Fightin’ Words Podcast, by Walter Hudson, was kind enough to underwrite the cost of our table. We are looking forward to an honest and open discussion about what possible changes to the existing law could mean for Minnesota. The panel will consist of several interested parties including Minnesota House Representative Steve Drazowski (R- Mazeppa). Representative Drazkowski has consistently pushed for the repeal of Sunday liquor prohibition. The forum is open to anyone, and we would love to have consumers come participate. The RLCMN is asking for a donation of $5 at the door. There will be a limited menu and bar available.

Details:
Sunday Liquor Sales Town Hall
Mermaid
2200 Hwy 10, Mounds View, Minnesota 55112
6:30-7p Social
7-8p Town Hall Forum
8-? Shenanigans
Limited menu and bar available.

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Infographic: Prohibition Yesterday and Today

It has been 80 years since the repeal of prohibition. Several states, including Minnesota, still suffer from the fallout with archaic laws like 3.2 ABW beer, and the prohibition of liquor sales on Sunday. Minnesota doesn’t have it as bad as some in the bible belt, but we aren’t that far off.

Check out the latest exhibit at the Minnesota History to see how prohibition didn’t decrease alcohol abuse but increased it, didn’t eliminate crime but created it, didn’t increase prosperity but robbed the treasury of taxes.

Maybe someday soon Minnesota will get its act together and finish repealing prohibition. After all, if repealing prohibition makes sense 6 days a week, why doesn’t it make sense everyday?

ProhibitionYesterdayandToday

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Time Warp….Again

Been watching HBO on Sunday nights lately? Curious about how Steve Buscemi was able to run an empire from the boardwalk in Atlantic City? Now is your chance to enjoy an in person experience with America’s most fascinating and misguided era, Prohibition. Minnesota residents should be especially aware of this lapse in judgment as it was a congressman from district 7 of our state, Andrew Volstead that authored this law. From November 9th to March 16th the Minnesota Historical Society is giving us the chance during our longest season, winter, to warm our spirits with, well, spirits. Starting today the History Center will be featuring American Spirits: The Rise and Fall of Prohibition presented by the National Constitution Center.

The exhibit kicks off tonight with the Bootlegger’s Ball when the History Center will hop in a Delorian and set the dial back 90 years to take us back to what it describes as a “swanky speakeasy”. The event will feature great ways to experience the era which ironically include legal alcohol. Appropriately Schells, the only remaining Minnesota brewery to survive Prohibition will be sampling beers, along with Summit and Lucid. Rae Katherine Eighmey (author of “Soda Shop Salvation”) and Nick Kosevich of Bittercube Bitters will be there to educate on and serve some great cocktails because the mixed drink was born in Prohibition to cover that flavor of questionably distilled booze. There will be live Dixieland jazz featuring the Southside Aces and period dance lessons so everyone can swing in style. Last but not least this is the first opportunity to wander through this exhibit with the right level of sobriety or more accurately, a lack thereof.

Andrew VolsteadOver the course of the next few months the History Center will be featuring different events highlighting some of the impacts of results of the Prohibition Era. One of these events that I will definitely been attending is the Speakeasy Saturdays reflecting the revival of local brewing and distilling. This event will feature Summit Brewing, Great Waters Brewing, and Dashfire Bitters on Saturdays from December through February. Other events during this exhibit will include a musical performance called A Toast to Prohibition: Songs of Temperance and Temptation, an ongoing series called History Lounge featuring discussions with historians, and Bootleg Valentine: Dining, dancing, and romancing in Prohibition Era Twin Cities.

All of this seems as if we have turned a blind eye to the existing remnants of Prohibition that exist in Minnesota to deny us rights to beer that other states enjoy. This is not true. Rather this exhibit should provide all of us with the opportunity to see that denying us our beer or liquor will move that potential revenue to the wrong place, not just Wisconsin. This exhibit should show us not just the rise of jazz and the cocktail, but also organized crime and the blatant destruction of an industry supporting thousands of jobs that we are beginning to recover. So, for the next few months let’s all bring out our inner historian and do the time warp again to keep Prohibition history.

American Spirits: The Rise and Fall of Prohibition
Minnesota History Center
ON VIEW NOV 9, 2013 – MARCH 16, 2014

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Death and Taxes

Taxes

It has been a while since the liquor excise tax has increased in Minnesota, and there is a movement afoot at the Capitol to change that.

The House Tax Omnibus HF 677, will increase the tax on liquor, wine, and beer in Minnesota by substantial amounts, as will the Senate version.  There are a few differences between the bills.  Both have massive increases, but the senate version creates an impact fund to go toward nonprofit entities that run substance abuse programs.

The tax increase is being sold as a mere pennies-per-pint increase, a notion that is entirely false.  In actuality, the tax increase is far more than a few pennies per pint.  The proposed state excise tax has an increase from $4.60 to $27.75 per 31-gallon barrel.  This is a 6-fold increase to one of the few industries showing growth in Minnesota.

Here is the terrible part about the tax increase; it gets passed to you, the consumer.  Brewers aren’t just going to pay the extra cost to the state and be done with it.  To cover the increase, brewers will increase the price that wholesalers pay, then wholesalers will pass that increase to retailers, and retailers will pass it to you.  Say what you want about the 3-tier system, but this is the system we have and it isn’t going away soon.

Follow along for some math fun!

Under the current tax structure:
Local brewery sells keg for $200
Wholesaler sells keg for $260 (30% increase)
Bar/store sells keg for $338 (30% increase)

Under the proposed tax structure:
Local brewery sells keg for $227
Wholesaler sells keg for $295 (same 30% increase)
Bar/store sells keg for $384 (same 30% increase)

See how a $27 tax can quickly become a $46 per Bbls increase? Include the federal excise tax, state sales tax, state alcohol tax, and local taxes, it is obvious that the government likes to dip its beak into your beer and drink heartily.

I think it is a really, really bad thing.

– Jacquie Berglund, Founder and CEO of FINNEGANS Inc.

But, not all governments are created equal. Of the surrounding states, Minnesota is currently in the middle of the pack when it comes to excise tax. South Dakota has a higher state excise tax at $8.50 a Bbls, and Wisconsin only taxes $2.40 a Bbls.  It is worth noting that South Dakota is the only other state in the region that also has a special Alcohol Tax.  The South Dakota special alcohol tax is 2%, and we beat them at 2.5% on gross receipts.

Death

Proponents of the tax increase claim that the extra tax revenue will offset the cost counties pay to run addiction centers and other alcohol-related medical expenses. If the idea is to offset the county costs, why is the tax revenue going into the state general fund? If counties like Hennepin are interested in offsetting the cost alcohol has on society, they should tax it at the county level. In fact, there are already numerous special taxes in downtown Minneapolis as they tax everything from dancing to liquor.

Breweries in Minnesota are doing their best to catch up to the rest on the country.  You will read all kinds news about the craft brewery explosion in Minnesota, but there are over 2,500 breweries in the country and we have less than 50.  We are a good deal behind the rest of the nation when it comes to enjoying local craft beer.  Increasing the cost to operate a brewery will only hinder the growth we’ve begun to see.

The only silver lining in the proposed tax increase is a provision that gives a credit to brewers on the first 50,000 Bbls brewed in a year.  The tax credit is nice, but it leaves breweries like Summit, Schell’s, and Cold Spring to pay a substantial amount of the tax.  The 50,000 ceiling is puzzling.  Nationally, brewers that produce less than 6 Mil Bbls a year are considered small.  A tax credit on 50,000 Bbls a year doesn’t do much to soften the blow of the proposed tax increase.

Unlike local wine and beer producers, there is no protection for local craft distillers in the proposed tax increase. Local distilling is an even smaller industry than brewing and wineries. Small distilleries are only beginning to have a presence here in Minnesota. Is the idea to collect more taxes from distillers, or make sure there are none here to pay the tax?

Minnesota is the home of prohibition and Andrew Volstead, but that doesn’t have to be our legacy. Prohibition is dead. Volstead is dead. This tax increase needs to die, too.

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The Minnesotan Who Gave Us Prohibition

Andrew Volstead
Andrew Volstead

All around terrible guy

In these days of massive budget deficits it would sound pretty strange if a politician authored a bill that would cost the Federal government $150,000,000 in beer excise revenue and tens of thousands of jobs. That number is especially shocking when you consider that the average price of a six pack was 40 cents. These severe consequences would not deter one congressman from Minnesota’s 7 th district and that man’s name was Andrew Volstead. Volstead is best remembered for the bill bearing his name that prohibited the manufacture, sale, transport, import, or export of alcoholic beverages. Known as the Volstead Act; it began some of the darkest thirteen years in American history known as Prohibition. The problem is that while this act bears his name; Volstead himself was likely little more than a figurehead. So what do we really know about Andrew Volstead?

Andrew Volstead was born to first generation Norwegian immigrants on October 31 st 1860 near Kenyon, Minnesota. Educated as lawyer in Decorah, Iowa, Volstead and his family moved to Granite Falls in 1886 where he served as city attorney and later mayor until 1902. In 1902 he was elected to congress in Minnesota’s 7th district as member of the Republican Party. While serving in public office Volstead became increasing involved in the civil rights movement and was one of few politicians willing to argue for legislation banning lynching. During the Progressive Era civil rights would become increasingly entangled with the temperance movement. The temperance movement was backed by very vocal groups, though in the minority, the Woman’s Christian Temperance League and the Anti-Saloon League.

The Anti-Saloon League, headed by Wayne Wheeler, used bullying tactics to apply pressure on politicians to support prohibitionist measures. Aided by World War I Wheeler began a campaign to align the big brewers with the German enemy since most were of German decent; Schlitz, Pabst, Busch, and Miller. In 1919 Wheeler saw his moment and wrote a piece of legislation authorizing national Prohibition. Though Volstead never admitted it, he was likely not the main author of Prohibition. As the chair of the judiciary committee it fell to him to sponsor the bill before congress. This action would cost him his seat in Congress in 1922 as it was largely unpopular with a majority of Americans who considered it violation of their constitutional rights.

Prohibition was repealed 80 years ago this Sunday and signed into law by President Roosevelt. At 12:31 AM on April 8th, 1933 the White House received cases of beer from many of the countries remaining breweries. Though Prohibition has been over for 80 years the country is still feeling the effects of the poorly named Nobel Experiment. So while Andrew Volstead may receive more of the blame than he is due, Minnesotans can still thank him for 3.2 beer, dry Sundays, and restrictive brewing laws. This Sunday we should all raise a glass of beer, well at least those of us who planned ahead, and have a drink to celebrate the end of the Volstead Act.