People keep calling me names (or at least disparaging the things I keep writing) for pointing out the connection between John McCain and Anheuser-Busch, as if business and politics together is merely coincidental. Sorry boys and girls, but I will never believe that business intruding into politics is good for ordinary citizens or that it ever makes our lives any better. Its obvious ubiquitousness doesn’t make it any more right and is hardly a reason to give up and stop talking about it.
A democracy is at least supposed to be about the will of the people, not the will of business interests. So as long as the money for a candidate’s campaign comes from a business with deep political ties and a habit of throwing money around to secure favorable treatment by our government — and as long as it’s in my purview by virtue of it being a beer company — I’m going to keep bringing it up.
Yesterday, the Libertarian-leaning Reason magazine (who, in the interest of full disclosure, I’ve written for in the past), had a very illuminating article by senior editor Radley Balko entitled How Your Beer Bought John McCain’s $500 Loafers: Uncovering the Government Subsidies Behind Cindy McCain’s Family Fortune
The problem is the contradiction between statements and actions. As Balko describes it:
McCain has never been shy about laying into what he feels are the excesses of capitalism, including the way lobbyists can bribe lawmakers to jigger the system to their liking. The problem for McCain is that the fortune he married into came by way of alcohol wholesaling, an industry that isn’t remotely free market, is awash in excess, and that wouldn’t exist were it not for rigorous system-jiggering from high-powered lobbyists.
Now I probably don’t have to tell you that I think the three-tier system does have some merits, though it has problems, too, and Balko goes on to highlight a number of those. I have many friends who work for beer distributors and most of the ones I know are hardworking, good people who have done much to raise the status of and, most importantly, the accessibility to craft beer.
The article spends most of its ink on detailing the history of how beer distributorships came into being and how they function. Many large retailers, notably Costco, would like to dismantle the three-tier system, and in fact they sued the State of Washington recently in a much-watched test case. Eventually, the court ruled against Costco in all but one of their arguments, citing a compelling state interest to regulate alcohol sales. But the fight is hardly over. Costco — and Balko — see the three-tier system as merely a way to keep a stranglehold on the pricing of alcohol and gouge customers, but that’s not entirely true, either.
The three-tier system, for all its flaws, does at least keep a relatively level playing field for all sizes of retailers, from the smallest mom and pop corner liquor store to the Costcos and Walmarts of the world. Dismantle it without a coherent new plan to regulate alcohol, as Costco vs. Washington sought to do, and a massive advantage will be given to large retailers, as well as the biggest beer companies. This would have enormous negative consequences for small, local craft brewers in gaining access to market and would likely put the brakes on thirty years of progress in re-invigorating America’s beer market, taking us from laughingstock to world leader in terms of quality and diversity in three short decades.
So what does this have to do with politics, again? Balko concludes by answering that question thusly:
But let’s get back to John McCain. What does the candidate lecturing Wall Street about greed think about the alcohol wholesaling industry? Is it fair? Should government be subsidizing (if not outright creating) an industry by forcing consumers to pay more for alcohol—for which they get little to no added value in return? And who’s greedier, the family who exploits that system to amass a small fortune, or the brokers and traders McCain derides for pursuing profits in a free market?
So is it “silly” or “unrealistic” (which are some of the gentler epithets lobbied at me) to worry that putting a President in the white house with ties to Anheuser-Busch specifically and the big alcohol lobby generally will not result in a boon for their interests? After all, businesses don’t donate money just to be good corporate citizens. There’s always some sort of quid pro quo. As Balko mentions obliquely, as a senator, McCain has usually recused “himself from federal legislation pertaining to alcohol regulation.” But if John McCain is elected President next month, he will no longer have that option. Does anybody really think his ties to A-B won’t matter under such circumstances? If not, your Kool-Aid must be better than mine, and well above 5% ABV.
The three tier system… Can’t live with ’em, can’t live without ’em. The ying and the yang. The reason for, and the answer to, all of life’s (beer’s) problems.
To answer the question, Of course you should worry about putting someone in the White House with ties to AB. But what about someone with ties to the likes of Home Depot? Home Depot is the AB of the construction supply world, they put my uncle out of business in Buffalo.
Go down the list of contributors to any politician and you’re sure to shake you head in disgust. Call me jaded but I think there all in someone’s back pocket.
That said, I’m still with you on this one, Jay.
Jim Randell says
The intrusion of politics into the world of worts is wholly unwelcome, though, of course, it’s your blog and your right to do so. Has it ocurred to you that businesses are, at their root, people? And so the connection of business’ interests and people interests is not do separate as you maintain? The simple dichotomy you propose is, alas, far too simplistic to support the many words you devote to its explication. Let’s have a safe, beery haven from the feckless, foolish of silly political diatribes!
Thanks for exploring how these things fit together, Jay. While while good people work everywhere, questioning issues and money is pretty much what Democracy is supposed to look like. Especially for journalists.
Beer people do need to be thoughtful and respectful looking at these things, so we can talk about deep and abiding issues (over diverse and excellent libations) to address real problems. I get a little nervous about some discussions that lead to craft beer/corporate beer political divide analogies because for one thing, more people of various political persuasions are out there happily drinking a Bud. But that’s not what you are doing, and you’re not insulting those who disagree… so thanks for the insight.
Now that AB is owned by InterBev, is it really relevant? A Belgian-Brazilian Corporation is no different than an American entity. All I kow is that no AB product will ever touch my lips – regardless of the politcal connection which is tenuous given the fact that Mrs. McCain’s family business (created from scratch by her father) is a distributorship.
Love reading your blog – but getting into politics just makes for antagonism (hope I spelled that correctly). Eventually someone calls someone else an idiot. Let’s not make this great site a forum for political discussion. I respectfully suggest we stick to talking about beer and related topics.
J.R. Ebbitt says
The fact that John McCain has acquired much of his financial backing from his wife’s interest in a beer distributor is no different than other politicians financial backing from other industries. McCains’s money is legally gained as opposed to the Kennedy’s money being derived from illegal bootlegging during the failed prohibitiion attempt last century.
People that perceive the 2nd tier of the American 3 tier system is just adding cost to the system and not value need to understand what the distributor does. The most important value we provide is a buffer between the retailer and the brewer. Do you really think it would be beneficial for Costco to purchase directly from the brewer. They will negotiate the best price from one supplier and create “Costco Brands” on beer like they do liquor and wine.
The wholesaler also collects tax in an orderly fashion for the state they service. This service provides many dollars to each individual state based on the work of the wholesaler. The wholesaler also provides jobs to the community that pay well above the average in the majority of the communties. This is probably not the case in the DC area where everybody is working for the government at inflated salaries.
I could go on and on about the values of the 3 tier system and the value the wholesaler provides in the second tier, but as this is a specialty beer oriented blog I would like to point out the value of the wholesaler to this growing segment of the business. Without the wholesaler network the expansion of craft beer will most likely not occur. Having visited the Craft Brewers Conference in San Diego earlier this year I talked with many aspiring brewers who planned to brew “the best IPA in the country”. I asked them what is their plan to go to market and they said people will find me, because I make “the countries best IPA”. Trust me without a wholesaler providing some push on the local level most craft brands will not find a big following.
Smaller craft brewers who believe the wholesalers to be a necessary evil need to visit with wholesaler who share the vision and passion of this burgeoning segment. World Class Beverages is a great network that is putting together like minded wholesalers across the country. Or talk with the people at Stone Brewery who provided distirbution for their brands and additional craft brands in their market. These people can elaborate the wholesaler support of this segment of the industry.