Hello to all and welcome to our new members. I want to take a moment to talk a little bit about why we have chosen not to focus directly on moving beer and wine into wide grocery distribution. We recognize that this specific issue has always been at the front of other public interest movements trying to make some sweeping legislative changes in an effort to bring Oklahoma’s laws into a more modern scope. The success or failure of any issue that we champion will be determined largely by the amount and kind(s) of opposition that we face. The grocery issue will face a devastating amount of opposition from a number of different directions. Wholesaler lobbies, religious organizations, family focus groups and retailer lobbies are just the bigger groups that have opposed this issue successfully in the past. Our goals are crafted in an attempt to avoid direct opposition from any of these groups and that will give us a great advantage.
Before I continue, I think that it will be a good idea to examine our current structure of laws in our state that are already in place. There are some very important ways that these laws benefit Oklahoma and her citizenry. Since the repeal of the 21st Amendment, states are now free to set their own alcohol laws. Oklahoma repealed it’s prohibition in 1959, the last state to do so. Oklahomans created a 3-tier system for distribution with the sole purpose to restrict trade in Oklahoma to businesses that are owned completely by Oklahomans. This prevented out-of-state corporations from taking control of this industry and created a major benefit to our state by keeping revenues and taxes going directly back to our state. The 3 tiers are as follows:
Brokers are responsible for finding products to distribute in Oklahoma. These are the guys that get your favorite new beer, liquor and wine on retail shelves. Brokers have been doing a great job lately. We’ve seen Mad River Brewing, Ommegang, North Coast, DuPont and Anderson Valley for example. New products are coming every month. Brokers listen to consumers and foster close relationships with leading retailers to position themselves to respond to consumer demand. They contact breweries (using beer as an example) to see if that brewer is interested in expanding their distribution. Sometimes brewers are unable to expand for a number of internal reasons, not least of which is production volume. When brewers are ready to expand into new markets they will use the broker to represent their product and get it into the state for distribution. I know of no state that does not have a brokerage system.
Just because a retailer uses the word “wholesaler” in their title, it does not mean that they are a licensed wholesalers. Licensed wholesalers are not allowed to sell directly to the public. Instead, the wholesalers’ function is to get products together in a central system from all of the different brokers in the state. The wholesaler will store, and in many cases deliver, the products to individual retailer, restaurants and bars. In states where there is not wholesale houses, national retailers will take control of this level of distribution and then fix the price structure to their benefit. Furthermore, they will sell the products directly to their own retail operations. Oklahoma has several wholesalers. The number of wholesalers in the state forces competition and keeps prices reasonable across the board for the consumer. National retailers would fix prices so low that no competition could be fruitful.
The Retailer, Restaurant or Bar.
Well, you know these guys, right?
There is a public sentiment that we have noticed. The public feels that this system creates greed and impropriety. It does not. It keeps Oklahoma jobs, revenues and businesses functioning. If a national retailer get’s involved in the system, the level of greed, price-fixing, and poor regulation will force Oklahoman’s to close their businesses and Oklahoma will loose a greater share of money, while spending more in an attempt to enforce all the new licensees. This is the opposition to the grocery issue. This is why we have chosen to focus on more attainable change at this point in time. If we are identified as the enemy by the lobby groups we will suffer the same fate as movements past. There are many changes that we can make that will not be seen as a threat, and will change the way the consumer shops. Our purpose is to seek those issues out and to bring them to the fore.
Thanks for all your friendship and support!