Jackson Jambalaya

 Imagine if you had to wait weeks to get a new phone? Actually, that’s exactly how things were in the 1970s. Back in the day, when one corporation—AT&T—had a near-monopoly on phone services (roughly from the early 20th century until 1984), you’d often face a wait of weeks to get a new phone installed. 

Since Ronald Reagan made the decision to break up the monopoly, there’s been fierce competition—and technological change—in telecommunications. So much so that we take it for granted you can walk into a store and get a new phone instantly.

The solution to the problem created by a monopoly seems so obvious, right? Get rid of the monopoly.

So why do so many Mississippi politicians have such a hard time understanding what needs to be done when it comes to the issues plaguing liquor and wine distribution in our state?

Just like with pre-1984 telecommunications, Mississippi’s government insists on maintaining a monopoly over the wholesale distribution of certain alcohol.

So, guess what? Like with phones back then, there are terrible delays and massive backlogs. Restaurants and retailers are unable to get their customers what they want when they want it. Right now, there is a backlog of something like 200,000 cases. Think how many small businesses must be impacted by this incompetence?

I’ve spent weeks listening to various politicians prattling on about how these delays are due to technical glitches, or an old conveyor belt system, or billing errors, or a company contracted to process orders that isn’t up to the task. Blah blah, yadda yadda.

When politicians get drawn into discussing the granular details of the distribution fiasco, they are missing the point spectacularly.

The state of Mississippi should not be in the business of funneling alcohol wholesale distribution through a Mississippi Office of Alcoholic Beverage Control in the first place.

No matter how much effort they put into ironing out the incompetence, having all products pass through a single warehouse before reaching private retailers will never be as efficient as allowing private retailers to handle their own distribution arrangements.

The justification for this insane system is the need to collect taxes. A moment’s reflection reveals how ridiculous that argument is. With digital technology, the idea that we need to physically assemble products in one spot in order to levy a tax is daft.

There are multiple ways in which Mississippi collects taxes without insisting that the thing being taxed pass through a single warehouse. How do you imagine sales taxes are collected every time someone in our state purchases something on Amazon?

No, the real reason for maintaining the system of state-controlled wholesale distribution is bureaucratic self-interest. Those who earn a living running the ABC system have a vested interest in maintaining it—even if that means hundreds of local small businesses in our state suffer from their incompetence.

The solution is not to “privatize” the process of wholesale alcohol distribution, but to eliminate the state-controlled process of wholesale distribution altogether.

Do that, and all those ancillary failures—the shambolic supply chain management, the unresponsive customer service—will take care of themselves. We don’t, after all, have politicians getting drawn into discussions about cell phone supply chains.

I have been very encouraged listening to various Mississippi commentators, like Richard Cross on SuperTalk, make the case for reform. Richard magnificently dissected the failures of the current system and explained how it is a “textbook” failure of state monopoly.

“Why,” Richard wanted to know, “is the state in the alcohol distribution business at all?” Well said.

One day the same logic needs to be applied to the government’s near-monopoly on education, too. That is a conversation for another day….

Mississippi Center for Public Policy President Douglas Carswell authored this post. 

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