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Idaho liquor laws place broad regulatory discretion in few hands

Idaho liquor laws place broad regulatory discretion in few hands

Idaho Freedom Foundation staff
June 2, 2012

Media reports have proliferated across the country in recent days regarding the Idaho State Liquor Division's decision not to stock Five Wives Vodka, a brand manufactured by Ogden's Own Distillery in Utah. The earliest stories especially focused on the brand's indirect reference to polygamy, indicating that it had been rejected for sale because the state's large Mormon population might find the brand name offensive.

A May 29 press release by Ogden's Own Distillery included a reprint of the rejection letter the company received from Howard Wasserstein, deputy director of the Idaho State Liquor Division, which cited the brand's marketing as its rationale.

"Products that we feel are marketed toward children, or are in poor taste with respect to our citizens will not be authorized for distribution," Wasserstein wrote. "We feel Five Wives Vodka concept is offensive to a prominent segment of our population and will not be carried."

Although the letter itself does not specify which segment of the Idaho population that Liquor Division officials had in mind, most reports have inferred an obvious conclusion: "We can only presume he means Mormons," Ogden's Own partner and vice president of marketing Steve Conlin was quoted as saying in the company's release.

That presumption is incorrect, however, according to Liquor Division Director Jeff Anderson, who said in an interview Friday with IdahoReporter.com that the division felt the vodka's packaging is offensive to women, the "prominent segment" it had in mind all along. The brand's label depicts a 19th century vaudeville act, the Barrison Sisters, lifting their skirts to reveal kittens mounted to their underwear—a visual pun deemed too risqué by state officials.

Idaho's statutes governing the sale of distilled spirits grant the Liquor Division's director the power "To determine the classes, varieties, and brands of alcoholic liquors to be kept in state warehouses and for sale at state liquor stores and distribution stations." The existing law provides no elaboration or guidance for officials on which criteria they should use to determine which products will be sold. Instead, the details of that broad authority are left entirely to the discretion of the director, Anderson.

In the case of Five Wives Vodka, Anderson claimed the product itself was not distinctive in terms of quality, and Idaho liquor stores simply can't stock everything that distributors offer.

"We say no more than yes," Anderson told KBSX FM. This particular brand, he continued, "was presented to us as a straight vodka that is OK, but the screening team that works with me, and makes recommendations for listings, felt that it was an average straight vodka trying to compete in a price segment, at $21.95, where we already have 106 other vodkas in that price segment between $20 and $25. We just felt like we didn't need it. The tiebreaker in this case was the packaging."

Ultimately, in a state where liquor sales are controlled through a single centralized distributor, shelf space is limited.

"There are over 20,000 distilled spirits products and size extensions available in the U.S.A.," Anderson told IdahoReporter.com. "We carry about 2,400, which means we can't carry everything. We try to serve our customers with things that they want, and in this case the product was presented for regular listing. We have a process that brokers who represent suppliers can follow—it’s on our website. It describes the kind of criteria that we use to make responsible decisions about what to offer. At the end of the day, this product was average at best, priced too high, in an unacceptable package."

Anderson pointed out that the Liquor Division has rejected other brands in the past for offensive marketing, such as alcohol-infused chocolate milk and Loopy vodka, which mimics the flavor of a sugary breakfast cereal—both of which had packaging that they deemed as potentially attractive to children.

"A lot of people have been calling me very, very bad names," Anderson said. "But at the end of the day, I think you've got to have some standards. What if they were, you know, naked men with a fig leaf over their private parts? At what point do you say, as a state agency, or even as a responsible retailer, is that something we want to have on our shelf, sitting next to Absolut vodka? It just looks low-class, that's all."

Anderson does not consider the Liquor Division's rejection of Five Wives Vodka to be a "ban" of the product, although he acknowledges that given the lack of alternative markets for the vodka in Idaho, the decision has the same effect as a de facto ban.

Sales of wine and beer are legal for retail sale in Idaho, and stores selling these products make their own decisions about what to stock for their customers. No single store, however, is able to dictate what will and will not be sold at every other store in the state. Real competition can lead different stores to stock varying inventory, some catering to a broad general market and others serving any number of smaller niche markets. A consumer who is disappointed by the selection at one outlet has other options. Not so for state liquor stores, which all adhere to sales criteria essentially set by a single man.

Given that some types of alcoholic beverages are already sold privately throughout Idaho, why are spirits in a strictly controlled category of their own?

"Everybody sort of says that we have state liquor stores in the interest of promoting temperance and morality, and then they sort of snicker behind their hand, because that really isn't true," lawyer and lobbyist Bill Roden said in an interview with IdahoReporter.com. "The bad thing about the system is that it's a sole supplier of product, and so while there is competition among the brands, there isn't competition really for the various products. It's a brand competition, not interbrand competition."

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