19 August 2008

Oh Noes! Low Prices!: The Birth of the College Park Beer Cartel

Background: one College Park bar, the Thirsty Turtle, occasionally offered 25 cent drinks, I believe as part of a progressive happy hour. The other bar owners were not happy with the stiff competition.
The City of College Park hosted a meeting between bar owners, elected officials, police officers, representatives of the county liquor board, university officials and student leaders to discuss the Thirsty Turtle's 25-cent rail drinks, city Public Services Director Bob Ryan said.

Ryan said state Sens. Jim Rosapepe and Paul Pinsky and Prince George's County Councilman Eric Olson received "concerns" the low prices may be encouraging students to excessive or binge drinking, but the three legislators could not be reached for comment yesterday.

The bar owners then "voluntarily agreed" to a $1 minimum charge for a shot, mixed drink or 16-ounce beer, as suggested at the meeting by R.J. Bentley's owner John Brown, Ryan said. [1]

Here we go with coerced volunteering again. This was as voluntary as paying "insurance" to your friendly neighborhood protection racket. (Somebody has been listening to too many Harry Reid tax proposals.)
But although city officials have stressed that the price floor was purely voluntary, a sign that had been posted at the Thirsty Turtle explaining the new high prices suggested that the city had forced their decision. [2]
The Thirsty Turtle was recently closed for about 18 months due to scuffle with regulators over their liquor license. So this is not the first time they've been bullied by city, state and university officials.
"Some business owners thought a quarter a beer was unreasonable and irresponsible," Ryan said. "It was peer pressure, where responsible business owners put pressure on other business owners." [3]
"Peer pressure?" Bullshit. It's a shakedown. Besides, peer pressure is between peers. It doesn't involve calling in the police and the liquor board and the town council. And isn't peer pressure supposed to be a bad thing? I grew up watching all kinds of DARE videos where Nancy Reagan and a couple of puppets told me to resist peer pressure at all costs. This is legitimized collusion; a government-backed cartel, plain and simple.
Ryan said any pressure put on the Thirsty Turtle was not from the city, but from the state legislators - whom city officials said promised to legislate an alcohol price floor if one was not reached voluntarily - and from the owners of other bars. [4]
Get your stories straight, city officials:
No ordinances or legislation has been passed to enforce the minimum, but [City Manager Joe] Nagro said that if the bars were to violate it, the city would not rule out pursuing state legislation to regulate prices. [5]
So there's confusion about who's expressing "concerns" about low prices. Is there anybody in the audience who doesn't think it's the other bar owners? And is there anybody else who thinks that the leftist, wowser administrators from the university, city and county bureaucracies are at all sympathetic to low drink prices? Those people already (a) hate students, and (b) hate commerce and low prices. This is a perfect excuse for them to intrude and set a price floor.
College Park officials hope an agreement between the city and local bar owners, setting a $1 minimum for all drink specials, will help to cut down on incidents at bars. (gazette) [6]
Was there any evidence presented that bars with sub-$1 drinks had more incidents? I doubt anybody involved is quantitative enough to collect this data, but even if they did I doubt it would show any trend.
John McGorty, an inspector for the Prince George's County Liquor and Licensing Commission, said the new agreement will help the bars encourage responsible drinking among patrons.
"This is heading it off at the pass," he said. "When you take cheap drink specials and college kids looking to have a good time, the result isn't always great. Anything we can do to be more responsible, I'm all for that." [7]
In order to head something off it has to have not happened yet or be getting worse. Once again, do we have any indication that the Thirsty Turtle had more problems as a result of their cheaper product? And as cash strapped as students are, is a one dollar beer really going to be keeping them sober and responsible? Especially when they can have drinks before going to the bar that only set them back 20 or 30 cents?

The only people in any of the articles I read who made sense were students and alumni, and they all thought this price floor was ludicrous.
"When you have two gas stations on a corner, they can't decide to set the price at X number of dollars per gallon," said student David Gordon. "To me, it's the same thing. The other bars around here weren't happy, so they all got together and tried to set a minimum drink price." [8]
Spot on, Mr. Gordon, spot on. I was halfway through writing up a gas station hypothetical when I saw this, too. This guy understands this better than any of the administrators quoted. Even if this was voluntary, it's still a cartel. The fact that it isn't voluntary just makes it all the more disgusting. If the product in question was gas or bread or airline tickets then all this leftists would be wailing about the greedy businessmen squeezing an extra dollar out of poor students. But because it's beer the State feels justified in encouraging businesses to collude against the interest of consumers. Disgusting.

Here's more student wisdom:
"I mean, just because it's 75 cents, that doesn't make people who don't drink drink," said student Tammie An. "If people are going to drink, they're going to just pay for it no matter how expensive it is."

"When I came to the bar and it was 25 cents, I drank the same amount as before [when drinks were a dollar]," said student Luke Johnson. "It's just I was able to leave after only spending a couple dollars." [9]
The amount you drink at undergrad places like this is limited by how long it takes you to wade through the pack of people at the bar, which is often five or six people deep. The primary thing holding people back from getting stupid drunk at these places is that it takes too long, not that they can't manage to scrounge up pocket change for cheap domestic lager. And even if it did hit them in the wallet too hard there are a half dozen liquor stores within three miles of the Thirsty Turtle where you can buy beer at a rate of about 20 cents per.

Every non-student quoted in these articles sounds like a stuffed shirt PR flack, throwing out illogical platitudes about how we need to do this For The Children. Do these professionals know that a bunch of supposedly reprehensible binging-drinking drunkards, aka students, make them seem like total fools?
"I was a student once and I was poor, and I was always happy to get things cheaper," [University Assistant Vice President for Student Affairs Warren Kelley] said. "But we have a lot of evidence that cheap, cheap alcohol leads to a lot of problems." [10]
There's also a lot of evidence that it's better to have people drinking in public, where there are police and publicans looking out for dangerous behavior, rather than having them drinking in their apartments, houses and dorm rooms before going to bars or at parties. But his real concern isn't students' safety, it's university liability, so why should they give a hoot if they push binge drinking out of their view?

Through all three of these pieces the reporters kept writing about bar owners, plural, deciding to raise their prices. One bar owner raised his prices, the other two already priced their drinks at or above that level. This wasn't some friendly consensus everyone adopted together. One business was pressured into raising prices at the behest of two others. (Yes there are only four student bars run by three owners for a campus of 25K undergraduates. How boring.) This is just a sanctioned cartel, organized at the behest of a couple of anti-competitive businesses who ran to the State for help and found a bunch of nosy, power hungry politicians who think they know what's best for a group of adult citizens than the citizens do themselves.

[1] The Diamondback
[2] Ibid
[3] Ibid
[4] Ibid
[5] The Gazette
[6] Ibid
[7] Ibid
[8] NBC4
[9] Ibid
[10] Ibid #1

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