Sounds like local boy Brett Graves is pitching in Beloit this season, and started both their opener and home opener. I wonder if he'll get a start against the Kernels or not?
His mom was impressed that I knew he was a Snapper when she told me his location this year.
We finished 16th in the World's Largest Trivia Contest this year, our highest ever. For several hours we were as high as 12th and were able to recover after we hit a rough patch somewhere around Hour 35. This year we finished ahead of several high-performing, long-established teams (including the most annoying team in the contest), so we feel this was a great step forward.
This year we even had people playing with us remotely from Chicago, New York, & St. Cloud, and we received some key contributions from them. We also had some new folks drive over from Minnesota to join us. If any of you want to play next year I think we've got our online game - including 1080p webcasting - to the point where we can make you feel as much like you're actually there as possible. (Of course, you're just welcome to join us in Stevens Point, too.)
I left Stevens Point during Hour 54 to make the drive back home. (I'm at work today and will be abusing my poor AeroPress to make it through.) As gradually 90FM faded out of range, one of the traditional, don't-veryify-just-call-it-in questions asked each year (What baseball player's name is on the bat Wendy Torrance uses?) was followed by this song:
httpv://youtu.be/q62AUM08nzM
I may end up taking you up on next year.
Huh. Turns out, I know a guy who was on the team that won. Alan Briggs - he was A Really Scary Mummy in Spookymilk Survivor XIV and Francis Undergarments in XVI.
I feel safer knowing these criminals got busted before I head down there for a weekend.
Would've been a hero only if tipping everyone but the authorities. What kind of yayhoo complains about Spotted Cow?!
The anonymous tipster is a true herozero.
FTFY.
If you're going to take that risk for a NG beer, go with something much better than the Cow.
If it was anything else (less common) from NG, it might not even have been newsworthy. Plenty of random beers at bars out there, but everybody knows you can't get a Spotted Cow around here.
Stone's throw from the house, but I've never been. Not since it was Pulaski's Palace, anyhow.
Oh, it's that place?
EAR said she once ate there under the old name and that it wasn't good.
It was Pulaski's, and I only ate there a couple times for wrestling banquets in the basement, having vivid memories of meatballs.
Then I think it was briefly something else...I've heard decent reports about the place now, but I'm not their target clientele.
I'm trying to figure out the legality issues here. Not licensed to transport for resale makes sense to me. But if the guy were so licensed...?
Does every brewer who makes their product in a different state need to be licensed as a manufacturer in Minnesota in order for distributors to distribute their product here? Or can a Minnesota distributor distribute non-licensed beers manufactured in other states?
::conducts a little bit of research::
This is stupid.
I object to a brewer artificially controlling distribution through licensing schemes that make it illegal for people to buy their product. Artificial control is OK if that's what they want to do, but to do so in a way where others can get arrested... I don't like that. Heck, given their approach, I wouldn't be surprised if the tipster was New Glarus-related.
I thought I read something about a facebook picture with the Spotted Cow tap handle. Could easily have come full-circle that way.
I imagine anyone who wants to sell their (controlled-ish substance) wares in Minnesota would have to at least get on a list with the state somewhere. If NG doesn't want to apply that much effort, for whatever reason, I don't see how ignorant staff at a Minnesota bar could be considered their problem.
I don't think it was illegal for the people to buy the beer, just to sell it in Minnesota.
Maybe that's not exactly what took place.
3 tier licensing regime, apparently.
Manufacturer - Must be licensed to make for sale. And apparently by each state, not just the locality of where it is made. New Glarus obtains that license in WI, but chooses not to pursue it in other states. Jerks.
Distributor - Must be licensed to wholesale/transport. Having this license apparently doesn't permit you to wholesale/transport hooch made by unlicensed manufacturers, even though said manufacturers may be licensed in other localities.
Retailer - Licensed to sell to individuals. May or may not be limited to licensed manufacturers?
In this case, we have a retailer acting as a distributor w/o being so-licensed. That part seems fair to charge out normally. But the only reason the retailer acted as a distributor here is because New Glarus refuses to get a license in other state. There was available supply, and as soon as New Glarus gets a manufacturer's license in MN, distributors are at the ready to sell to retailers, and in such an instance the retailer wouldn't have acted as a distributor. So, in essence, New Glarus' refusal made what would otherwise be a legal act illegal.
Why shouldn't we accept other state's licensing of manufacturers? New MN law says "if WI says it's OK to manufacturer, that we'll allow it sold here too. Distributors authorized to transport/sell across state lines to retailers." We can call it the "Thumbing our noses at New Glarus" law.
Before demonizing New Glarus on this, know that they did once distribute to other states but were not able to keep up with supply. They sell a TON of beer in Wisconsin, and they had to build a 20 million dollar expansion to the brewery just to keep up with that demand.
So, really, its the three tier system that is the problem here, not the brewer.
"Not able to keep up with supply" shouldn't mean they get to prefer their customers to the degree that they can make it illegal for others. Yes, the three tier system is to blame - that's why my cure above is to expand the licensing of manufacturers. But we all know New Glarus takes some pleasure in this arrest, as it's going to be really good for their exclusivity approach.
There have been discussing recently, in other contexts, about whether a seller should be able to dictate who they sell to, or whether they must accept all comers... discriminating based on address strikes me as questionable, and generally not permitted, except for the problematic three tier system. So get rid of the problem, and let the market be what it is. Any artificial attempt to control the market by a supplier bothers me.
But we all know New Glarus takes some pleasure in this arrest, as it's going to be really good for their exclusivity approach.
But we don't all know that.
I don't think comparing a distribution network to sellers discriminating against who people are is even close to a reasonable comparison. In the case of logistics, it's just not physically possible to get your product everywhere, a problem magnified by the three tier system. I am willing to be that if NG could, legally, distribute to Stillwater when they already get to Hudson, they would. But, you start getting further and further away from the source and you can't keep up with supply there, it looks bad on the manufacturer when people go looking for their product but can never find it in places the manufacturer claimed it would be. And all that is before even thinking in terms of freshness of the product. As another example, I wouldn't expect a pizza joint 50 miles away to agree to deliver to my house.
Alright, I'm projecting on the exclusivity issue. But I've heard about it enough times that it's at least an educated guess.
I am willing to be that if NG could, legally, distribute to Stillwater when they already get to Hudson, they would.
But they can. All they have to do is get a manufacturer's license. Which you've pointed out, they've done in the past.
If freshness/supply availability is the issue, there are plenty of places in MN (and IA, and IL, and IN, and MI) closer than places they sell in WI. So it's not distribution network practicalities, it is statehood discrimination. You might be OK with that, and I'd agree that it's not as offensive as other types of discrimination (and I didn't mean to suggest that it was), but let's not pretend it's anything else.
Its not statehood discrimination, its byzantine liquor law discrimination. It wouldn't be cost effective to get a manufacturer's license in another state just to distribute like 10 miles into it. I mean, in addition to the license, you'd (I assume) have to set up an agreemet with another distribution company in that state. For freshness, yeah, Superior, WI would be more of a problem than Stillwater, MN. But they don't have to get any additional licensing to get it up to Superior.
What I'm basically saying is that I don't understand the anger/blame being directed at New Glarus for this bust. Its entirely likely that the anonymous source was a distributor making note of the fact that one of their beers doesn't have a place in that bar because of the illegal sales of Spotted Cow.
New Glarus benefits from a reputation built on exclusivity. That exclusivity is furthered by their refusing to sell in other states, and by the fact that their refusal has the effect of creating criminal penalties for people trying to create access to their product. That is market manipulation, and it offends me. Especially when, as near as I can figure, it'd only cost them a little more than $5,000 to license all their offerings (so I don't buy the cost effective thing... doesn't seem to be too high a barrier.).
Yes, the laws are restrictive. We should just accept the manufacturer's license from other states. I don't like the current state of the law.
But I also don't like companies that use the laws to alter the market. There's as much demand in Maple Grove, apparently, as there is in WI. But the market is - criminally! - altered by the combination of the licensing laws and New Glarus' refusal to license (and licensing is obviously fairly standard in the industry, as plenty of WI brewers sell across state lines... if this were a political stand against the licensing regime, I'd feel differently). The problem is created by both the state and the market participant. It's not one of the other, and letting one off the hook makes no sense to me.
to be clear, that's $5,000 per year for the privilege of selling beer in Minnesota.
Would it be enough to damage the business? No. NG now brews ~165,000 barrels per year. Assuming their gross margin is a couple of bucks per liter, that's on the order of $53 million in gross profit. But is it an impediment to establishing a business presence in Minnesota? Clearly.
"Clearly an impediment" is an unfair conclusion.
well, I would not call a $5,000/year fee an inducement, so what else could it be? It is a fee that would come straight out of profits without providing any compensating opportunity, since this company apparently is perfectly capable of selling its entire annual production within the state of Wisconsin.
apparently is perfectly capable of selling its entire annual production within the state of Wisconsin.
That's not a counter-point.
It was sold in Wisconsin, then re-sold in Minnesota in contravention to MN law.
All the end user consumption there was a product of MN sales. They might not have been legal MN sales, but they were still MN sales.
No. It is not a counter-point, since NG gained no economic benefit from the "illegal" sales in Minnesota over and above what they would have gained from selling to any other customer in Wisconsin.
If they had an economic incentive to climb the regulatory barriers to sell legally in Minnesota, Econ 1 tells us they would do so. Since they are not doing so, we have to ask "why not?"
1. Your hypothesis is that they are jacking up demand for their product artificially by restricting its availability over the border, thereby extracting rents. This is basically an argument about "prestige goods" or "Veblen goods." To be a Veblen good in this case, their product would have to command a premium price relative to other, similar products that are available in Minnesota. Basically, you'd need to look at New Glarus tap prices in border city bars and compare to similar beers available on both sides of the border. I'm guessing that there's no evidence that New Glarus is commanding premium prices in this sense.
Part of the problem with your thesis, of course, is that anybody in Wisconsin can readily purchase NG products. There is a suppy/demand logic there, driving prices. I suppose that Sconnies could treat NG beer as a Veblen good, bidding up its price relative to comparable products. But THAT argument has zero to do with NG "manipulating" Minnesota's regulatory regime to its market benefit. It is something wholly internal to the Wisconsin market. [ed: the whole "Veblen good" concept is somewhat slippery; it is the idea that a brand name can jack up the market price of a good irrespective of the signal about quality emanating from the label; i.e., that an Izod lizard on your shirt is about the lizard, not the quality of the shirt per se; we all accept that concept as real, but it's still weird economically, since it's not founded on "real" quality information, but rather on psychological phenomena]
2. the major alternative is much simpler: they just don't want to climb the entry barrier to Minnesota, because there is sufficient demand for their products in Wisconsin. Yes, if there were no regulatory barrier, they would sell more evenly in nearby Minnesota towns, but this is a cost to them of the regulatory regime, not a benefit. That is, distributors in Minnesota who lack access to their beer because they are not licensed to sell in Minnesota lose out on the opportunity to compete for NG product, thus artificially depressing demand and LOWERING prices in equilibrium. If the loss in income is large enough, they'd pay the cost of becoming eligible to sell in Minnesota. But if Wisconsin distributors were already bidding for all of their production, adding Minnesota into the mix would probably just crowd out the most geographically remote Wisconsin distributors (since their margins likely are the smallest from having to transport the beer the farthest).
as it stands now, sales to Minnesotans are largely confined to retail sales by Minnesotans coming over the border to consume on-spot or to smuggle it home. But they are paying market prices for NG products on-site PLUS paying the marginal transport cost. At the margin, I suppose they increase demand a teeny bit by competing against native Sconnies for the product in Wisconsin retail outlets. The benefit to Sconnies from this is increased exports (tourism sales are exports) and retail tax collections. If Minnesotans also buy dinner or gas while in Wisconsin to buy NG, then Minnesota's regulatory regime has the perverse effect of transferring consumer spending from Minnesota to Wisconsin. But the benefit is generalized, not so specific to NG.
for all of you excited about this ongoing thread, I present a picture of me, cheaptoy, and phyllo engaged in conversation. 😉
I think I'm the horse.
And now, a real response...
First, Veblen goods are a real thing. I'm not sure if you're just dismissing that or not, but in case you are... don't.
Second, you are conflating the locality of purchase and the geographic area of demand. I posit that market demand generally does not recognize artificial political boundaries. "I'll pick up a pack on my way through" and "Maple Grove bar wants to sell it on tap" are two examples that prove New Glarus is not self-limiting to a WI market, all their rhetoric and refusal to get licenses be damned. They want those MN/IA/IL buyers just as much as they want WI buyers. They just want to shift the burden to the buyers, rather than get the licenses. As you describe it " I suppose they increase demand a teeny bit by competing against native Sconnies for the product in Wisconsin retail outlets... PLUS paying the marginal transport cost.
I don't so much have a problem with this alone as I do with the fact that the good they're selling is a Veblen good to some people, and not to others, by virtue of NG's choice not to license. You can get it in any liquor store = not Veblen. You need a buddy to smuggle it across state lines = Veblen. Some people treating the product as Veblen drives up the demand. Thus, despite, nay, because of, refusing to sell in their localities, NG has higher demand in non-WI states than the market would normally produce.
As I write this out, I realize that it would be even more damning for NG if they actually charged out-of-staters more for their product. And they do, in a way, via transportation costs. It's not the most eggregious discrimination in the world, but it still bothers me. They're fooling Minnesotans into driving to Wisconsin to buy a product that is really just OK, when there's Surly right here!
Anyway, I don't like a market that favors some participants and not others. I don't like regulatory regimes that create such a system. I don't like corporations that bend those rules to their advantage at the expense of consumers. This one is only a little bending, I guess. And getting rid of the rules would be better. But that doesn't mean I have to like New Glarus' approach. I'm offended that they prefer Scott Walker as a customer to myself.
First, Veblen goods are a real thing. I'm not sure if you're just dismissing that or not, but in case you are... don't.
No, I'm not dismissing. It's an interesting and complicated concept.
Second, you are conflating the locality of purchase and the geographic area of demand.
Well, no I am not. I'm pretty explicitly not. If a Minnesota distributor can't distribute NG products in Minnesota, then Minnesota distributors are being cut out of the equation by NG declining to pay the costs of getting a brewer's license. But Minnesota consumers can still go to 'Sconnie to get some, if they are willing to bear the costs of acquisition. You are making the claim that by "artificially" restricting supply (to Minnesota distributors, but not to the market overall), NG is somehow creating cache for its product in Minnesota in order to inflate demand. That by restricting supply (which they are not, in fact, doing) they are magically increasing demand. So, which is it? Are they restricting supply or not? [the answer is they are restricting supply in Minnesota but not overall]
I posit that market demand generally does not recognize artificial political boundaries.
I haven't said anything that conflicts with this claim. Indeed, I take it as self-evident. Indeed, my comments about the regulations "artificially depressing demand" is exactly the same point as you imply I'm not making.
As you describe it " I suppose they increase demand a teeny bit by competing against native Sconnies for the product in Wisconsin retail outlets... PLUS paying the marginal transport cost.
I was talking specifically about the case of Minnesotans crossing the border to buy verboten beer, which is abundantly obvious in the context. At the margin, beer tourists from Minnesota increase the demand for Sconnie beer. The NET effect of the regulations is to depress the realized demand for NG beer (and the Minnesota supply of NG beer) to the degree that Minnesota consumers face transactions costs to obtain NG beer like, you know, driving to Sconnie. Obviously, if there were no border controls, there would be no "increase[d] demand" from border crossings. There would just be market demand. What we have now is a situation in which demand is depressed by regulatory barriers in Minnesota. Some people who would have paid the market price to drink NG in Minnesota are unwilling to pay the costs of traveling to Wisconsin to purchase it.
I don't so much have a problem with this alone as I do with the fact that the good they're selling is a Veblen good to some people, and not to others, by virtue of NG's choice not to license. You can get it in any liquor store = not Veblen. You need a buddy to smuggle it across state lines = Veblen. Some people treating the product as Veblen drives up the demand. Thus, despite, nay, because of, refusing to sell in their localities, NG has higher demand in non-WI states than the market would normally produce.
This, as framed, is untestable, I think. And almost certainly wrong.
The Minnesota market for NG beer is, by definition, incomplete, since you cannot legally sell it in Minnesota. So it's pretty hard to estimate the demand. You can find anecdotal evidence that some people are willing to pay exhorbitant prices for a smuggled sixer. But that doesn't tell you much about the demand curve.
A Veblen good has demand that increases with unit price, rather than decreasing with unit price, as with a normal good. There's no evidence of this with NG beers.
Are the rich or privileged conspicuously consuming NG, lording it over their neighbors? I think they are not. NG products remain normal goods, not Veblen goods. They are just locally scarce in Minnesota. That has not created a huge underground black market for NG smuggled in from Wisconsin (that we know of, anyway). But even if it had, it would still not be clear evidence of a Veblen good, but rather of a scarce normal good made scarce by regulations. And however you slice it, NG is still selling its beer at "normal" beer prices in Wisconsin. It's not reaping some huge, unearned gain from Minnesota's regulations. Again, as far as we know.
As I write this out, I realize that it would be even more damning for NG if they actually charged out-of-staters more for their product. And they do, in a way, via transportation costs. It's not the most eggregious discrimination in the world, but it still bothers me. They're fooling Minnesotans into driving to Wisconsin to buy a product that is really just OK, when there's Surly right here!
Well, no, they are not fooling anyone into anything. But good point about Surly.
Anyway, I don't like a market that favors some participants and not others.
Commie!!!!1111one1111!!!!
I'll just make a couple more brief points, since economics is not really my specialty.
First, to the points about the Veblen product (a term I only just learned about from this conversation), NG beer in Wisconsin is typically fifty cents to a dollar cheaper per six pack than even other Wisconsin beers of a similar quality tier.
Second, I wanted to clarify the main point that I'm arguing. Essentiall I'm saying that I think you're presuming too much on their intent to not distribute to the MN market and that I believe them they say that they have all that they can handle with their current distribution plan. In other words, they aren't artificially driving up WI demand because they don't need to. That demand will always be there regardless of where else they send that product.
To Cheap: I'm just not willing to give them that benefit of the doubt.
To Zombieman: What we have now is a situation in which demand is depressed by regulatory barriers in Minnesota. Some people who would have paid the market price to drink NG in Minnesota are unwilling to pay the costs of traveling to Wisconsin to purchase it.
"This, as framed, is untestable, I think. And almost certainly wrong." Or, rather, I think this cuts both ways. You're assuming depressed demand because of the barriers. I'm suggesting that there's increased demand because the barriers create scarcity which drives the product into being a Veblen good. The reality is probably that both countervailing effects are occurring, and where the balance ends up is anyone's guess. We know the prices are roughly "normal" in WI, suggesting regular good. We know some Minnesotans are willing to risk arrest to sell the product here, suggesting Veblen good. We don't know the extent to which those market forces are really affecting things. But we do know they both exist.
Also, it's still stupid that someone was arrested for selling a product that would be legal, but-for the-regulations/New-Glarus' reticence to get a license like a normal brewery.
Your thesis all along has been that NG benefits from this regulatory barrier. The counter-argument is that they aren't hurt enough by the barrier to be willing to pay to overcome it. Cheaptoy's evidence on NG pricing in Wisconsin is dispositive. They don't command a premium price in the marketplace relative to beers of similar quality. The fact that some consumers are willing to travel far to obtain it is not counter-evidence, since those consumers are price takers and are not numerous enough to have any meaningful impact on the market.
I also read another quote from Deb Carey (runs the business side) relating to the loss of shelf space in out of state stores because they did not have the supply as well as the added crap like being forced to "give away beer" and what basically amounts to bribes that goes along with selling to the Chicago market, which they pulled out of in 2002.
In the end, I think there is zero chance we can ever agree on this since we're arguing about what we think someone else might be thinking.
Cheaptoy's evidence on NG pricing in Wisconsin is dispositive. They don't command a premium price in the marketplace relative to beers of similar quality.
There's a lot of assuming going on in this comment. What is similar quality? What are we really comparing them to? Is this price the same throughout the state? Etc. I'm not willing to make the same assumptions that you do. What we know: their price is $X. That price, if the market is working correctly, corresponds to the demand for the product. That demand is by your reasoning "depressed because of the barriers"which suggests the non-regulatory price would be $X+MN. That demand is also, as I'm suggesting "increased because the barriers create scarcity which drives the product into being a Veblen good" with certain consumers. Which suggests the non-regulatory price would be $X-V. We don't know the extent to which those market forces are really affecting things, so we can only do as good as $X+MN-V, with the unknown variables remaining unknown. I will acknowledge that MN is a real variable, and that it may be larger than V. But you've at least got to acknowledge that V is also a real variable. And that it is a variable that benefits, to some extent, NG.
You are neglecting market position and marketing.
Selling in MN would risk those intangible assets for gain that at most would be marginal (MN-V x units sold in MN - Fees - MN marketing expenses).
Unless they expand, which could have other regulatory effects.
They seem to be using this rule: If it ain't broke don't fix it.
And you're complaining about it because it doesn't suit you.
I'm not complaining because it doesn't suit me. I'd still buy Surly.
I'm complaining because a guy got arrested. Both the legislature and the corporation have the power to make his actions legal. I won't blame one but not the other.
That seems to be a shift of focus from the thread above (pricing).
If an organization sells legal Marijuana in jurisdiction 1, should they try to make sure that people bringing it into jurisdiction 2 in contradiction to jurisdiction 2's laws are not incarcerated?
The difference there, of course, is that beer isn't illegal in MN, and legality for a particular brand is easily obtained through licensing. Even that barrier seems too high, as currently established, but it's certainly different than marijuana.
[looks like I replied to the wrong spot in this loooong thread. oops.]
I'm not complaining because it doesn't suit me. I'd still buy Surly.
I'm complaining because a guy got arrested. Both the legislature and the corporation have the power to make his actions legal. I won't blame one but not the other.
I think we can all agree that the situation in which some bar owner got arrested because he sold beer to an of-age drinker is a little absurd.
What we have been arguing about, I thought, is whether NG somehow benefits economically from the regulatory barrier to doing business in Minnesota (and, IF we could establish that, which I deny, whether it would be improper for them to do so from a moral standpoint).
You have a very high standard to meet to demonstrate that NG benefits economically from the regulatory barrier. You haven't established any evidence that their prices are different in Wisconsin from what they would have been in the absence of the regulatory barrier. Cheaps has suggested that their prices are in line with or lower than those of close substitutes (via his expert opinion, which I think we can stipulate) available in the same markets in Wisconsin.
The Veblen good concept is an interesting theoretical one, but really hard to find examples for in the real world. It is different from the concept of a "superior good," which is a normal good that is differentiated from substitutes by quality. In the superior good case, as income rises, individual consumers switch from "inferior" goods to "superior" goods. But the demand curve is still normal -- as prices rise, aggregate demand declines.
Examples: Poor grad student has 1X6 and concrete block book shelves; newly-employed Ph.D. buys "real" book shelves. Poor families scramble to send kids to community college; wealthier families send kids to fancy-pants college. College kid drinks Wisco Premium and Pfeiffers Because Poor, employed adult switches to New Glarus, Surly, etc. Because Not Poor and quality considerations begin to predominate over mere alcohol consumption.
In these cases, unit price differences are largely signals about value. Yes, we know of "fads" that bid up prices of certain brand-name products irrespective of abstract "quality" considerations. But these are again normal supply-and-demand situations.
The Veblen good argument is different. The claim is that demand increases with price -- and that the exclusivity of the brand is the essential thing being consumed. Because NG beer is readily available to anyone in Wisconsin, the Veblen good argument pretty much requires that its market price must exceed the price that it would command merely as a superior good. I.e., that the sellers are extracting rents based on "cache". This is a very hard case to make empirically.
Instead, you want to make an argument specific to markets to which NG does not in fact sell beer. That by refusing to pay the costs of entry, NG is artificially manipulating the market for its beer in Minnesota, which in turn creates an aura of exclusivity around the brand in the minds of Minnesota consumers and leads to an increase in demand as the price goes up.
Unfortunately, because it is illegal to sell NG beer in Minnesota, we can't really observe this alleged demand shift -- the market is incomplete. All we can observe is that some consumers drive to Sconnie and drink it there and/or buy sixers to smuggle home. They are purchasing at market prices, competing at the margin with Sconnie purchasers (and, perhaps, Illinois purchasers and Iowa purchasers and...) for available supply at the market price. As I have said before, NG has no ability to price discriminate at the retail level. The normal goods analysis implies that these consumers would have purchased the same units of NG in Minnesota at the same net cost to them if the product had been offered. That is, they are willing to pay in the market a price equivalent to the Wisconsin market price plus the avoided (marginal) costs of acquiring NG beer (the travel time and cost).
The normal goods analysis here says that the regulatory barriers to trade across the border reduces overall competition for NG products, thus lowering equilibrium prices. Smugglers may replace some of that lost demand, but smugglers are effectively paying higher prices (without any benefit to NG) because they have to smuggle. For the Veblen good argument to hold AND provide an economic benefit to NG from the regulatory barriers at the borders, it is necessary (but not sufficient) that smugglers would have to be bidding up the retail price of NG products in Wisconsin.
But by their purchasing, they increase demand, which does increase the retail price of NG, right?
Regardless, my position hasn't been "whether NG somehow benefits economically from the regulatory barrier to doing business in Minnesota." It has been that NG's reputation benefits at the expense of the freedom of this bartender, and I don't like that. I sort of continued with the thread when reputation got turned into $$$, which was a bit over my head. But still. I don't like NG gaining prestige at the expense of individuals' liberties.
But still. I don't like NG gaining prestige at the expense of individuals' liberties.
If we'd only suppressed the freedom of the press, we wouldn't have had this happening. Individual liberties could have been crushed the old fashioned way -- hidden from the light of day.
Don't blame NG. Blame stupid licensing laws that exist only to raise revenue and segment the market.
I do blame the licensing laws. Thus my proposal. But NG isn't an innocent party in this. I feel their manipulation of the market/laws is more criminal than the actions of the guy being charged.
Now, if they were to say "we'll apply for a license in MN and pay whatever costs this fellow incurs because, hey, our product is so good it's criminal," well, I'd probably change my tune then.
"criminal"?? Whoa, there.
They are a business, and apparently they are able to sell all the beer they want to sell in their home state. Why should they be obligated to pay to distribute to another state, particularly when they can sell their entire production at market-clearing prices in Wisconsin? That doesn't make any sense.
put the blame -- all of the blame -- squarely on the shoulders of a stupid regulatory regime.
They shouldn't be obligated to pay (even a nominal amount) to distribute in another state. That's a bad law.
But there is no indicia that they would sell in that other state if they didn't have to pay. In fact, from what I've seen, there seems to be the opposite indicia. That's unacceptable to me. Rather than get licensed (like most other manufacturers) , or challenge the laws, New Glarus has decided to use them as a shield for residency discrimination. They suffer no consequences for that, but rather benefit from a reputation for exclusivity. I realize I'm putting a somewhat affirmative burden on NG here, but I'm comfortable with that. Benefiting from bad laws is a form of complicity that I don't like.
Change the law, and NG has nothing to hide behind. That's the solution. But diminishing NG's reputation is also a solution. If WI exclusivity has less value than the MN market, New Glarus would certainly pay for the license.
"residency discrimination"
That's a good one. 🙂
They also don't distribute to Russia or China. Are they being discriminatory by not supplying directly to anyone who would be willing to purchase their beer in their place of residence?
You should extend your argument to every brewpub that fails to bottle its beer and make it available at retail establishments outside of the brewpub.
There are regulatory/tax consequences in many states for exceeding a certain scale of production. I don't know whether Wisconsin is one of those states and I don't know where NG falls on the scale if they do, but that's another arena for re-considering their business practices.
I'm opposed to telling a business where they MUST sell their products. Certainly, "Minnesotans" don't qualify as a class of citizens whose civil liberties deserve special consideration in law. If Minnesotans are upset about these stupid restrictions on beer distribution, they should petition their legislature to change the law. Then we can see which brewers were being deterred by the regulatory regime and which just aren't interested in distributing in Minnesota.
Hey, residency discrimination is a thing... ("The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.").
I may have given it a far more expansive reading here...
"I pick up a six pack every time I drive through WI" is a phenomena created by the embrace of license-generated exclusivity. No one says that about Leine's, because they ponied up the money for the license. NG is using the licensing laws to manipulate the market in that way. So change those laws, and all is well. But let's not pretend it isn't market manipulation enabled through the law.
And I don't like corporations manipulating markets through the law. This is far less offensive then if they were to push for legislation that benefited them or kept out competition or some other such. In fact, this is probably about as low down the "offensive legal manipulation" ladder as you can get. But it's still up a rung from open market participation, and that strikes me as a bad thing.
The best way out is to change the bad law. But that doesn't mean I can't cast aspersions at the people who are using that bad law to their advantage.
But New Glarus is challenging laws. Not national laws, but those are a hell of a lot harder for a relatively small business to deal with than local/state laws.
Also, to put this supply and demand stuff into context, Spotted Cow is the 2nd best selling beer in Wisconsin behind Miller Lite. (I'm pretty sure that's still true, at least. I haven't been able to find sales data to see if it still is, but it definitely was within the last five years, unless I was misled. Either way, they really do sell a lot of Spotted Cow) Think about what that means for their production. Per the repository, they're only brewing about 165,000 bbls of beer, total, per year, yet likely outselling Bud Light, made by AB who make about 120 MM bbls per year.
Hmm... so we know they're willing to challenge laws they don't like. I think the logical implication then is that any laws they don't challenge, they must like. 😉 Even, nay, especially, laws in other states.
I'd love to see what would happen if they were permitted to sell in MN w/o separate licensing approval.
"I pick up a six pack every time I drive through WI" is a phenomena created by the embrace of license-generated exclusivity. No one says that about Leine's, because they ponied up the money for the license. NG is using the licensing laws to manipulate the market in that way. So change those laws, and all is well. But let's not pretend it isn't market manipulation enabled through the law.
"Market manipulation" is an unfair conclusion.
There was a time when you could not buy Coors in Minnesota. My dad used to pick up some on the drives back from visiting the grandparents in NE Nebraska. But now, I think, they do sell in Minnesota. Why?
They do because Coors determined that it was worth it to them to expand their range of distribution. Just because some random dudes find it worth smuggling a couple of sixers across state lines does not mean that the brewery should spend the money and effort to expand its distribution. That's a business decision shaped in part by a regulatory regime.
History, btw, is littered with the corpses of businesses who expanded too quickly.
Just because some random dudes find it worth smuggling a couple of sixers across state lines
I don't think it's illegal to do this - it sure as hell shouldn't be - and as such the fact that it's even a thing should just tickle them pink. This comment should in no way be taken as admission to having received such a shipment from a guy I know who commutes to Wisconsin.
I would definitly order Spotted Cow as a "go-to"draft-beer-with-my-burger kind of brew.
yea, the "smuggling" part was hyperbolic.
I don't think it's illegal to do this
It is in Mississippi. (I may or may not have gotten away with this.)
Oops, not here.
Even if everything Phil alleges about NG is true, I don't know that it's damnable.
They're satisfied being the #2 beer in Sconnie and selling there. Do privately-held corporations have an obligation to maximize and continually expand?
Perhaps they feel that maintaining their niche as Sconnie-only keeps them well-regarded in Sconnie, as a marketing angle.
Probably both.
History, btw, is littered with the corpses of businesses who expanded too quickly.
1. Is licensing just "Here's five grand, give me my license"? Or are there other regulatory barriers? Having to have inspections, file annual reports, etc. Each of those is one more thing to dissuade licensing.
2. Finding distributors isn't free. Who can we trust to keep it fresh? What cut do they want? Etc. I think there's politics to it, some merchants may not work with some distributors or something like that.
Ultimate point: Why put up with the hassle? NG is not the Bad Gal in this sitch.
If that were true, and they are not doing so, doesn't that answer the question?
/Taps nose
Does Surly still sell all of it's beer in MN? I know that was the case for a long time, but maybe the new brewery has allowed them more production.
I know distribution is usually state-by-state.
No, Surly has expanded.
I can confirm that Surly is in Wisconsin.
I feel as though some retailer in Wisconsin needs to be outed and arrested in retaliation.
We have other, newer brewers, that probably haven't decided to get approval to sell in Sconnie.
Why did they wait so long? People were smuggling Surly into other states...
Surely they were twisting the regulatory regimes in other states to their benefit, until they could realize greater profit by being above-board.
I know of one bar that has trucked in kegs of Coffee Bender to DC for a couple of years. I don't really want to wade into this much but just adding a bit of info.
I think much of this is a bit silly unless you know who tipped off whom. But I probably didn't read everything that was over a couple of sentences.
If you hadn't noticed already, sean phreaked the site so you can now play the Video of the Day straight from the front page. So we've got that going for us now.
If by "noticed," you meant "accidentally started playing videos when intending to click through to view them at a larger size," then yes! (I'm not complaining, mind you. I've just been confused about why I keep doing that.)
Except some people have a too tall area for it. I can't reproduce it in Chrome yet so I'm not sure why it's happening. I think either a webkit/blink bug or poorly cached CSS.
I am not cool. I think I once was, but not anymore.
I'm still trying to understand the coffee tie-in. But then again, I've never been cool.
I have established, beyond a shadow of a doubt over the past almost 11 years at this and the former site, that I am definitely not cool. I don't think I ever was.
httpv://www.youtube.com/watch?v=LV0wTtiJygY
So that woman who caught a foul ball in her beer and then chugged the beer at Wrigley on Saturday is apparently a really good college friend of my sister. The friend definitely qualifies as cool.
I have a law school friend who expressed an interest in marrying that woman because of her skills (and fandom).
Cubs fans should be required to only marry Cubs fans to protect the gene pool. 😉
I was just going to post "If only I were single..."
I'm not a bird-watcher, but what was I'm pretty sure an eastern bluebird kept tormenting my cat yesterday my peeking in the window. Beautiful bird.
Are we doing movie day today? Because I'm only a little way in on Daredevil, but I want to talk about it.
Uh, sure. I really need to start getting Mondays off again.
I watched the first two episodes and I think i am done. I can handle a little darker super heron but I can't get on board with a super hero that tortures anybody.
What do you expect from a vigilante?
little darker super heron
You rang?
We are all gonner egret going down this path, aren't we?
If that Goliath decided to eat him, he'd be a gonner egret.
Path of least egret?
Well, it's not a Great Egret. I can't say for sure if it's a Median Egret or Least Egret.
Day game alert: Cedar Rapids at Burlington is getting underway right about now.
Basketball-reference.com has a new feature: shooting percentages by distance of the shot, grouped by 0-3 ft, 3-10 ft, 10-16 ft, 16 ft to < 3pt, and 3ptrs. This goes back to the 2000-01 season.
Player A, shooting percentage, by 2pt. distance: .685, .441, .461, and .454.
Player B, shooting percentage, by 2pt. distance: .634, .450, .440, and .406.
Compared to the average major league right fielder, Twins right fielders combined to cost their team a total of 23 runs last season, which was the worst mark in baseball. Oswaldo Arcia, a young slugger known far more for his bat than his glove, did most of that damage, so in an effort to bolster the outfield defense, Minnesota signed 39-year-old Torii Hunter to a one-year, $10.5 million contract. In addition to the goodwill engendered by bringing back a franchise legend, it hoped he would provide some leadership and also allow the club to move Arcia to the slightly less demanding left-field position.
Well, the Twins better be getting tons of veteran guidance because on the field Hunter has been awful. He’s hitting just .225/.256/.350, and his defense has been just as bad. The trademark range and athleticism that made him a Gold Glove center fielder and human highlight reel is now long gone, and DRS rates Twins right fielders (mostly Hunter) as the worst in the majors again this year.
I think playing left field in TF is actually about as tough as RF because of all the room out there.
How can anyone that brings up defensive metrics this early in the season be taken seriously?
When they're knocking ii, I'm willing to give them a pass.
I don't think they're all that different from what the eye test tells us is happening. And it's not surprising given the "talent" on the roster.
Torii is over 40 and he looks slow. His numbers were awful last year.
Just because the sample is small, doesn't make the conclusion false. All are in agreement.
Actually, he's 39. He'll turn 40 in July.
"He's still only 39. Nobody doubts his talent."
😉
Yup. It would be one thing if there were a couple of freak outliers, or if it said that a Buxton-type had strongly negative numbers, but I don't expect these to turn around.
Neither the advanced stuff nor the eye test give Torii a pass on the this.
Apparently the good folks in State College PA have issues with fighting words.
Looked back at that 2010 NHL Draft class.
The Wild picked 9th and took C Mikael Granlund, considered by the NHL Central Scouting Bureau to be the top European skater in the draft.
The Blues picked 14th, selecting C Jaden Schwartz, not considered a top-10 North American prospect.
The Blues also picked 16th, selecting RW Vladimir Tarasenko, considered by those Central Scouting folks to be the second-best European in the draft.
These three players are similar ages (23 or nearly) and have the same (or similar) amount of time playing in the NHL, making their first appearances in 2013-2013 and playing most of their clubs games during the past 2 full seasons (barring injury). Their lines over their first three seasons:
Player
GP
G
A
P
+/-
PIM
PPG
SHG
GWG
S
S%
Player A
158
18
70
88
10
48
2
0
4
239
7.5
Player B
179
66
69
135
48
57
16
0
10
475
13.9
Player C
207
62
73
135
38
47
14
3
7
428
14.5
Minnesota Sports Gonna MInnesota Sports - No Surprises here:
Sounds like local boy Brett Graves is pitching in Beloit this season, and started both their opener and home opener. I wonder if he'll get a start against the Kernels or not?
His mom was impressed that I knew he was a Snapper when she told me his location this year.
We finished 16th in the World's Largest Trivia Contest this year, our highest ever. For several hours we were as high as 12th and were able to recover after we hit a rough patch somewhere around Hour 35. This year we finished ahead of several high-performing, long-established teams (including the most annoying team in the contest), so we feel this was a great step forward.
This year we even had people playing with us remotely from Chicago, New York, & St. Cloud, and we received some key contributions from them. We also had some new folks drive over from Minnesota to join us. If any of you want to play next year I think we've got our online game - including 1080p webcasting - to the point where we can make you feel as much like you're actually there as possible. (Of course, you're just welcome to join us in Stevens Point, too.)
I left Stevens Point during Hour 54 to make the drive back home. (I'm at work today and will be abusing my poor AeroPress to make it through.) As gradually 90FM faded out of range, one of the traditional, don't-veryify-just-call-it-in questions asked each year (What baseball player's name is on the bat Wendy Torrance uses?) was followed by this song:
httpv://youtu.be/q62AUM08nzM
I may end up taking you up on next year.
Huh. Turns out, I know a guy who was on the team that won. Alan Briggs - he was A Really Scary Mummy in Spookymilk Survivor XIV and Francis Undergarments in XVI.
I should go to this bar.
Agreed. The anonymous tipster is a true hero.
I feel safer knowing these criminals got busted before I head down there for a weekend.
Would've been a hero only if tipping everyone but the authorities. What kind of yayhoo complains about Spotted Cow?!
The anonymous tipster is a true
herozero.FTFY.
If you're going to take that risk for a NG beer, go with something much better than the Cow.
If it was anything else (less common) from NG, it might not even have been newsworthy. Plenty of random beers at bars out there, but everybody knows you can't get a Spotted Cow around here.
Stone's throw from the house, but I've never been. Not since it was Pulaski's Palace, anyhow.
Oh, it's that place?
EAR said she once ate there under the old name and that it wasn't good.
It was Pulaski's, and I only ate there a couple times for wrestling banquets in the basement, having vivid memories of meatballs.
Then I think it was briefly something else...I've heard decent reports about the place now, but I'm not their target clientele.
I'm trying to figure out the legality issues here. Not licensed to transport for resale makes sense to me. But if the guy were so licensed...?
Does every brewer who makes their product in a different state need to be licensed as a manufacturer in Minnesota in order for distributors to distribute their product here? Or can a Minnesota distributor distribute non-licensed beers manufactured in other states?
::conducts a little bit of research::
This is stupid.
I object to a brewer artificially controlling distribution through licensing schemes that make it illegal for people to buy their product. Artificial control is OK if that's what they want to do, but to do so in a way where others can get arrested... I don't like that. Heck, given their approach, I wouldn't be surprised if the tipster was New Glarus-related.
I thought I read something about a facebook picture with the Spotted Cow tap handle. Could easily have come full-circle that way.
I imagine anyone who wants to sell their (controlled-ish substance) wares in Minnesota would have to at least get on a list with the state somewhere. If NG doesn't want to apply that much effort, for whatever reason, I don't see how ignorant staff at a Minnesota bar could be considered their problem.
I don't think it was illegal for the people to buy the beer, just to sell it in Minnesota.
Maybe that's not exactly what took place.
3 tier licensing regime, apparently.
Manufacturer - Must be licensed to make for sale. And apparently by each state, not just the locality of where it is made. New Glarus obtains that license in WI, but chooses not to pursue it in other states. Jerks.
Distributor - Must be licensed to wholesale/transport. Having this license apparently doesn't permit you to wholesale/transport hooch made by unlicensed manufacturers, even though said manufacturers may be licensed in other localities.
Retailer - Licensed to sell to individuals. May or may not be limited to licensed manufacturers?
In this case, we have a retailer acting as a distributor w/o being so-licensed. That part seems fair to charge out normally. But the only reason the retailer acted as a distributor here is because New Glarus refuses to get a license in other state. There was available supply, and as soon as New Glarus gets a manufacturer's license in MN, distributors are at the ready to sell to retailers, and in such an instance the retailer wouldn't have acted as a distributor. So, in essence, New Glarus' refusal made what would otherwise be a legal act illegal.
Why shouldn't we accept other state's licensing of manufacturers? New MN law says "if WI says it's OK to manufacturer, that we'll allow it sold here too. Distributors authorized to transport/sell across state lines to retailers." We can call it the "Thumbing our noses at New Glarus" law.
Before demonizing New Glarus on this, know that they did once distribute to other states but were not able to keep up with supply. They sell a TON of beer in Wisconsin, and they had to build a 20 million dollar expansion to the brewery just to keep up with that demand.
So, really, its the three tier system that is the problem here, not the brewer.
"Not able to keep up with supply" shouldn't mean they get to prefer their customers to the degree that they can make it illegal for others. Yes, the three tier system is to blame - that's why my cure above is to expand the licensing of manufacturers. But we all know New Glarus takes some pleasure in this arrest, as it's going to be really good for their exclusivity approach.
There have been discussing recently, in other contexts, about whether a seller should be able to dictate who they sell to, or whether they must accept all comers... discriminating based on address strikes me as questionable, and generally not permitted, except for the problematic three tier system. So get rid of the problem, and let the market be what it is. Any artificial attempt to control the market by a supplier bothers me.
But we all know New Glarus takes some pleasure in this arrest, as it's going to be really good for their exclusivity approach.
But we don't all know that.
I don't think comparing a distribution network to sellers discriminating against who people are is even close to a reasonable comparison. In the case of logistics, it's just not physically possible to get your product everywhere, a problem magnified by the three tier system. I am willing to be that if NG could, legally, distribute to Stillwater when they already get to Hudson, they would. But, you start getting further and further away from the source and you can't keep up with supply there, it looks bad on the manufacturer when people go looking for their product but can never find it in places the manufacturer claimed it would be. And all that is before even thinking in terms of freshness of the product. As another example, I wouldn't expect a pizza joint 50 miles away to agree to deliver to my house.
Alright, I'm projecting on the exclusivity issue. But I've heard about it enough times that it's at least an educated guess.
I am willing to be that if NG could, legally, distribute to Stillwater when they already get to Hudson, they would.
But they can. All they have to do is get a manufacturer's license. Which you've pointed out, they've done in the past.
If freshness/supply availability is the issue, there are plenty of places in MN (and IA, and IL, and IN, and MI) closer than places they sell in WI. So it's not distribution network practicalities, it is statehood discrimination. You might be OK with that, and I'd agree that it's not as offensive as other types of discrimination (and I didn't mean to suggest that it was), but let's not pretend it's anything else.
Its not statehood discrimination, its byzantine liquor law discrimination. It wouldn't be cost effective to get a manufacturer's license in another state just to distribute like 10 miles into it. I mean, in addition to the license, you'd (I assume) have to set up an agreemet with another distribution company in that state. For freshness, yeah, Superior, WI would be more of a problem than Stillwater, MN. But they don't have to get any additional licensing to get it up to Superior.
What I'm basically saying is that I don't understand the anger/blame being directed at New Glarus for this bust. Its entirely likely that the anonymous source was a distributor making note of the fact that one of their beers doesn't have a place in that bar because of the illegal sales of Spotted Cow.
New Glarus benefits from a reputation built on exclusivity. That exclusivity is furthered by their refusing to sell in other states, and by the fact that their refusal has the effect of creating criminal penalties for people trying to create access to their product. That is market manipulation, and it offends me. Especially when, as near as I can figure, it'd only cost them a little more than $5,000 to license all their offerings (so I don't buy the cost effective thing... doesn't seem to be too high a barrier.).
Yes, the laws are restrictive. We should just accept the manufacturer's license from other states. I don't like the current state of the law.
But I also don't like companies that use the laws to alter the market. There's as much demand in Maple Grove, apparently, as there is in WI. But the market is - criminally! - altered by the combination of the licensing laws and New Glarus' refusal to license (and licensing is obviously fairly standard in the industry, as plenty of WI brewers sell across state lines... if this were a political stand against the licensing regime, I'd feel differently). The problem is created by both the state and the market participant. It's not one of the other, and letting one off the hook makes no sense to me.
to be clear, that's $5,000 per year for the privilege of selling beer in Minnesota.
Would it be enough to damage the business? No. NG now brews ~165,000 barrels per year. Assuming their gross margin is a couple of bucks per liter, that's on the order of $53 million in gross profit. But is it an impediment to establishing a business presence in Minnesota? Clearly.
"Clearly an impediment" is an unfair conclusion.
well, I would not call a $5,000/year fee an inducement, so what else could it be? It is a fee that would come straight out of profits without providing any compensating opportunity, since this company apparently is perfectly capable of selling its entire annual production within the state of Wisconsin.
apparently is perfectly capable of selling its entire annual production within the state of Wisconsin.
Counter point.
That's not a counter-point.
It was sold in Wisconsin, then re-sold in Minnesota in contravention to MN law.
All the end user consumption there was a product of MN sales. They might not have been legal MN sales, but they were still MN sales.
No. It is not a counter-point, since NG gained no economic benefit from the "illegal" sales in Minnesota over and above what they would have gained from selling to any other customer in Wisconsin.
If they had an economic incentive to climb the regulatory barriers to sell legally in Minnesota, Econ 1 tells us they would do so. Since they are not doing so, we have to ask "why not?"
1. Your hypothesis is that they are jacking up demand for their product artificially by restricting its availability over the border, thereby extracting rents. This is basically an argument about "prestige goods" or "Veblen goods." To be a Veblen good in this case, their product would have to command a premium price relative to other, similar products that are available in Minnesota. Basically, you'd need to look at New Glarus tap prices in border city bars and compare to similar beers available on both sides of the border. I'm guessing that there's no evidence that New Glarus is commanding premium prices in this sense.
Part of the problem with your thesis, of course, is that anybody in Wisconsin can readily purchase NG products. There is a suppy/demand logic there, driving prices. I suppose that Sconnies could treat NG beer as a Veblen good, bidding up its price relative to comparable products. But THAT argument has zero to do with NG "manipulating" Minnesota's regulatory regime to its market benefit. It is something wholly internal to the Wisconsin market. [ed: the whole "Veblen good" concept is somewhat slippery; it is the idea that a brand name can jack up the market price of a good irrespective of the signal about quality emanating from the label; i.e., that an Izod lizard on your shirt is about the lizard, not the quality of the shirt per se; we all accept that concept as real, but it's still weird economically, since it's not founded on "real" quality information, but rather on psychological phenomena]
2. the major alternative is much simpler: they just don't want to climb the entry barrier to Minnesota, because there is sufficient demand for their products in Wisconsin. Yes, if there were no regulatory barrier, they would sell more evenly in nearby Minnesota towns, but this is a cost to them of the regulatory regime, not a benefit. That is, distributors in Minnesota who lack access to their beer because they are not licensed to sell in Minnesota lose out on the opportunity to compete for NG product, thus artificially depressing demand and LOWERING prices in equilibrium. If the loss in income is large enough, they'd pay the cost of becoming eligible to sell in Minnesota. But if Wisconsin distributors were already bidding for all of their production, adding Minnesota into the mix would probably just crowd out the most geographically remote Wisconsin distributors (since their margins likely are the smallest from having to transport the beer the farthest).
as it stands now, sales to Minnesotans are largely confined to retail sales by Minnesotans coming over the border to consume on-spot or to smuggle it home. But they are paying market prices for NG products on-site PLUS paying the marginal transport cost. At the margin, I suppose they increase demand a teeny bit by competing against native Sconnies for the product in Wisconsin retail outlets. The benefit to Sconnies from this is increased exports (tourism sales are exports) and retail tax collections. If Minnesotans also buy dinner or gas while in Wisconsin to buy NG, then Minnesota's regulatory regime has the perverse effect of transferring consumer spending from Minnesota to Wisconsin. But the benefit is generalized, not so specific to NG.
for all of you excited about this ongoing thread, I present a picture of me, cheaptoy, and phyllo engaged in conversation. 😉
I think I'm the horse.
And now, a real response...
First, Veblen goods are a real thing. I'm not sure if you're just dismissing that or not, but in case you are... don't.
Second, you are conflating the locality of purchase and the geographic area of demand. I posit that market demand generally does not recognize artificial political boundaries. "I'll pick up a pack on my way through" and "Maple Grove bar wants to sell it on tap" are two examples that prove New Glarus is not self-limiting to a WI market, all their rhetoric and refusal to get licenses be damned. They want those MN/IA/IL buyers just as much as they want WI buyers. They just want to shift the burden to the buyers, rather than get the licenses. As you describe it " I suppose they increase demand a teeny bit by competing against native Sconnies for the product in Wisconsin retail outlets... PLUS paying the marginal transport cost.
I don't so much have a problem with this alone as I do with the fact that the good they're selling is a Veblen good to some people, and not to others, by virtue of NG's choice not to license. You can get it in any liquor store = not Veblen. You need a buddy to smuggle it across state lines = Veblen. Some people treating the product as Veblen drives up the demand. Thus, despite, nay, because of, refusing to sell in their localities, NG has higher demand in non-WI states than the market would normally produce.
As I write this out, I realize that it would be even more damning for NG if they actually charged out-of-staters more for their product. And they do, in a way, via transportation costs. It's not the most eggregious discrimination in the world, but it still bothers me. They're fooling Minnesotans into driving to Wisconsin to buy a product that is really just OK, when there's Surly right here!
Anyway, I don't like a market that favors some participants and not others. I don't like regulatory regimes that create such a system. I don't like corporations that bend those rules to their advantage at the expense of consumers. This one is only a little bending, I guess. And getting rid of the rules would be better. But that doesn't mean I have to like New Glarus' approach. I'm offended that they prefer Scott Walker as a customer to myself.
No, I'm not dismissing. It's an interesting and complicated concept.
Well, no I am not. I'm pretty explicitly not. If a Minnesota distributor can't distribute NG products in Minnesota, then Minnesota distributors are being cut out of the equation by NG declining to pay the costs of getting a brewer's license. But Minnesota consumers can still go to 'Sconnie to get some, if they are willing to bear the costs of acquisition. You are making the claim that by "artificially" restricting supply (to Minnesota distributors, but not to the market overall), NG is somehow creating cache for its product in Minnesota in order to inflate demand. That by restricting supply (which they are not, in fact, doing) they are magically increasing demand. So, which is it? Are they restricting supply or not? [the answer is they are restricting supply in Minnesota but not overall]
I haven't said anything that conflicts with this claim. Indeed, I take it as self-evident. Indeed, my comments about the regulations "artificially depressing demand" is exactly the same point as you imply I'm not making.
I was talking specifically about the case of Minnesotans crossing the border to buy verboten beer, which is abundantly obvious in the context. At the margin, beer tourists from Minnesota increase the demand for Sconnie beer. The NET effect of the regulations is to depress the realized demand for NG beer (and the Minnesota supply of NG beer) to the degree that Minnesota consumers face transactions costs to obtain NG beer like, you know, driving to Sconnie. Obviously, if there were no border controls, there would be no "increase[d] demand" from border crossings. There would just be market demand. What we have now is a situation in which demand is depressed by regulatory barriers in Minnesota. Some people who would have paid the market price to drink NG in Minnesota are unwilling to pay the costs of traveling to Wisconsin to purchase it.
This, as framed, is untestable, I think. And almost certainly wrong.
The Minnesota market for NG beer is, by definition, incomplete, since you cannot legally sell it in Minnesota. So it's pretty hard to estimate the demand. You can find anecdotal evidence that some people are willing to pay exhorbitant prices for a smuggled sixer. But that doesn't tell you much about the demand curve.
A Veblen good has demand that increases with unit price, rather than decreasing with unit price, as with a normal good. There's no evidence of this with NG beers.
Are the rich or privileged conspicuously consuming NG, lording it over their neighbors? I think they are not. NG products remain normal goods, not Veblen goods. They are just locally scarce in Minnesota. That has not created a huge underground black market for NG smuggled in from Wisconsin (that we know of, anyway). But even if it had, it would still not be clear evidence of a Veblen good, but rather of a scarce normal good made scarce by regulations. And however you slice it, NG is still selling its beer at "normal" beer prices in Wisconsin. It's not reaping some huge, unearned gain from Minnesota's regulations. Again, as far as we know.
Well, no, they are not fooling anyone into anything. But good point about Surly.
Commie!!!!1111one1111!!!!
I'll just make a couple more brief points, since economics is not really my specialty.
First, to the points about the Veblen product (a term I only just learned about from this conversation), NG beer in Wisconsin is typically fifty cents to a dollar cheaper per six pack than even other Wisconsin beers of a similar quality tier.
Second, I wanted to clarify the main point that I'm arguing. Essentiall I'm saying that I think you're presuming too much on their intent to not distribute to the MN market and that I believe them they say that they have all that they can handle with their current distribution plan. In other words, they aren't artificially driving up WI demand because they don't need to. That demand will always be there regardless of where else they send that product.
To Cheap: I'm just not willing to give them that benefit of the doubt.
To Zombieman: What we have now is a situation in which demand is depressed by regulatory barriers in Minnesota. Some people who would have paid the market price to drink NG in Minnesota are unwilling to pay the costs of traveling to Wisconsin to purchase it.
"This, as framed, is untestable, I think. And almost certainly wrong." Or, rather, I think this cuts both ways. You're assuming depressed demand because of the barriers. I'm suggesting that there's increased demand because the barriers create scarcity which drives the product into being a Veblen good. The reality is probably that both countervailing effects are occurring, and where the balance ends up is anyone's guess. We know the prices are roughly "normal" in WI, suggesting regular good. We know some Minnesotans are willing to risk arrest to sell the product here, suggesting Veblen good. We don't know the extent to which those market forces are really affecting things. But we do know they both exist.
Also, it's still stupid that someone was arrested for selling a product that would be legal, but-for the-regulations/New-Glarus' reticence to get a license like a normal brewery.
Your thesis all along has been that NG benefits from this regulatory barrier. The counter-argument is that they aren't hurt enough by the barrier to be willing to pay to overcome it. Cheaptoy's evidence on NG pricing in Wisconsin is dispositive. They don't command a premium price in the marketplace relative to beers of similar quality. The fact that some consumers are willing to travel far to obtain it is not counter-evidence, since those consumers are price takers and are not numerous enough to have any meaningful impact on the market.
Here's a pretty good article that mentions a couple points on why I believe them when it comes to their reasoning for not expanding out of state.
I also read another quote from Deb Carey (runs the business side) relating to the loss of shelf space in out of state stores because they did not have the supply as well as the added crap like being forced to "give away beer" and what basically amounts to bribes that goes along with selling to the Chicago market, which they pulled out of in 2002.
In the end, I think there is zero chance we can ever agree on this since we're arguing about what we think someone else might be thinking.
Cheaptoy's evidence on NG pricing in Wisconsin is dispositive. They don't command a premium price in the marketplace relative to beers of similar quality.
There's a lot of assuming going on in this comment. What is similar quality? What are we really comparing them to? Is this price the same throughout the state? Etc. I'm not willing to make the same assumptions that you do. What we know: their price is $X. That price, if the market is working correctly, corresponds to the demand for the product. That demand is by your reasoning "depressed because of the barriers"which suggests the non-regulatory price would be $X+MN. That demand is also, as I'm suggesting "increased because the barriers create scarcity which drives the product into being a Veblen good" with certain consumers. Which suggests the non-regulatory price would be $X-V. We don't know the extent to which those market forces are really affecting things, so we can only do as good as $X+MN-V, with the unknown variables remaining unknown. I will acknowledge that MN is a real variable, and that it may be larger than V. But you've at least got to acknowledge that V is also a real variable. And that it is a variable that benefits, to some extent, NG.
You are neglecting market position and marketing.
Selling in MN would risk those intangible assets for gain that at most would be marginal (MN-V x units sold in MN - Fees - MN marketing expenses).
Unless they expand, which could have other regulatory effects.
They seem to be using this rule: If it ain't broke don't fix it.
And you're complaining about it because it doesn't suit you.
I'm not complaining because it doesn't suit me. I'd still buy Surly.
I'm complaining because a guy got arrested. Both the legislature and the corporation have the power to make his actions legal. I won't blame one but not the other.
That seems to be a shift of focus from the thread above (pricing).
If an organization sells legal Marijuana in jurisdiction 1, should they try to make sure that people bringing it into jurisdiction 2 in contradiction to jurisdiction 2's laws are not incarcerated?
The difference there, of course, is that beer isn't illegal in MN, and legality for a particular brand is easily obtained through licensing. Even that barrier seems too high, as currently established, but it's certainly different than marijuana.
[looks like I replied to the wrong spot in this loooong thread. oops.]
I think we can all agree that the situation in which some bar owner got arrested because he sold beer to an of-age drinker is a little absurd.
What we have been arguing about, I thought, is whether NG somehow benefits economically from the regulatory barrier to doing business in Minnesota (and, IF we could establish that, which I deny, whether it would be improper for them to do so from a moral standpoint).
You have a very high standard to meet to demonstrate that NG benefits economically from the regulatory barrier. You haven't established any evidence that their prices are different in Wisconsin from what they would have been in the absence of the regulatory barrier. Cheaps has suggested that their prices are in line with or lower than those of close substitutes (via his expert opinion, which I think we can stipulate) available in the same markets in Wisconsin.
The Veblen good concept is an interesting theoretical one, but really hard to find examples for in the real world. It is different from the concept of a "superior good," which is a normal good that is differentiated from substitutes by quality. In the superior good case, as income rises, individual consumers switch from "inferior" goods to "superior" goods. But the demand curve is still normal -- as prices rise, aggregate demand declines.
Examples: Poor grad student has 1X6 and concrete block book shelves; newly-employed Ph.D. buys "real" book shelves. Poor families scramble to send kids to community college; wealthier families send kids to fancy-pants college. College kid drinks Wisco Premium and Pfeiffers Because Poor, employed adult switches to New Glarus, Surly, etc. Because Not Poor and quality considerations begin to predominate over mere alcohol consumption.
In these cases, unit price differences are largely signals about value. Yes, we know of "fads" that bid up prices of certain brand-name products irrespective of abstract "quality" considerations. But these are again normal supply-and-demand situations.
The Veblen good argument is different. The claim is that demand increases with price -- and that the exclusivity of the brand is the essential thing being consumed. Because NG beer is readily available to anyone in Wisconsin, the Veblen good argument pretty much requires that its market price must exceed the price that it would command merely as a superior good. I.e., that the sellers are extracting rents based on "cache". This is a very hard case to make empirically.
Instead, you want to make an argument specific to markets to which NG does not in fact sell beer. That by refusing to pay the costs of entry, NG is artificially manipulating the market for its beer in Minnesota, which in turn creates an aura of exclusivity around the brand in the minds of Minnesota consumers and leads to an increase in demand as the price goes up.
Unfortunately, because it is illegal to sell NG beer in Minnesota, we can't really observe this alleged demand shift -- the market is incomplete. All we can observe is that some consumers drive to Sconnie and drink it there and/or buy sixers to smuggle home. They are purchasing at market prices, competing at the margin with Sconnie purchasers (and, perhaps, Illinois purchasers and Iowa purchasers and...) for available supply at the market price. As I have said before, NG has no ability to price discriminate at the retail level. The normal goods analysis implies that these consumers would have purchased the same units of NG in Minnesota at the same net cost to them if the product had been offered. That is, they are willing to pay in the market a price equivalent to the Wisconsin market price plus the avoided (marginal) costs of acquiring NG beer (the travel time and cost).
The normal goods analysis here says that the regulatory barriers to trade across the border reduces overall competition for NG products, thus lowering equilibrium prices. Smugglers may replace some of that lost demand, but smugglers are effectively paying higher prices (without any benefit to NG) because they have to smuggle. For the Veblen good argument to hold AND provide an economic benefit to NG from the regulatory barriers at the borders, it is necessary (but not sufficient) that smugglers would have to be bidding up the retail price of NG products in Wisconsin.
But by their purchasing, they increase demand, which does increase the retail price of NG, right?
Regardless, my position hasn't been "whether NG somehow benefits economically from the regulatory barrier to doing business in Minnesota." It has been that NG's reputation benefits at the expense of the freedom of this bartender, and I don't like that. I sort of continued with the thread when reputation got turned into $$$, which was a bit over my head. But still. I don't like NG gaining prestige at the expense of individuals' liberties.
If we'd only suppressed the freedom of the press, we wouldn't have had this happening. Individual liberties could have been crushed the old fashioned way -- hidden from the light of day.
Don't blame NG. Blame stupid licensing laws that exist only to raise revenue and segment the market.
I do blame the licensing laws. Thus my proposal. But NG isn't an innocent party in this. I feel their manipulation of the market/laws is more criminal than the actions of the guy being charged.
Now, if they were to say "we'll apply for a license in MN and pay whatever costs this fellow incurs because, hey, our product is so good it's criminal," well, I'd probably change my tune then.
"criminal"?? Whoa, there.
They are a business, and apparently they are able to sell all the beer they want to sell in their home state. Why should they be obligated to pay to distribute to another state, particularly when they can sell their entire production at market-clearing prices in Wisconsin? That doesn't make any sense.
put the blame -- all of the blame -- squarely on the shoulders of a stupid regulatory regime.
They shouldn't be obligated to pay (even a nominal amount) to distribute in another state. That's a bad law.
But there is no indicia that they would sell in that other state if they didn't have to pay. In fact, from what I've seen, there seems to be the opposite indicia. That's unacceptable to me. Rather than get licensed (like most other manufacturers) , or challenge the laws, New Glarus has decided to use them as a shield for residency discrimination. They suffer no consequences for that, but rather benefit from a reputation for exclusivity. I realize I'm putting a somewhat affirmative burden on NG here, but I'm comfortable with that. Benefiting from bad laws is a form of complicity that I don't like.
Change the law, and NG has nothing to hide behind. That's the solution. But diminishing NG's reputation is also a solution. If WI exclusivity has less value than the MN market, New Glarus would certainly pay for the license.
"residency discrimination"
That's a good one. 🙂
They also don't distribute to Russia or China. Are they being discriminatory by not supplying directly to anyone who would be willing to purchase their beer in their place of residence?
You should extend your argument to every brewpub that fails to bottle its beer and make it available at retail establishments outside of the brewpub.
There are regulatory/tax consequences in many states for exceeding a certain scale of production. I don't know whether Wisconsin is one of those states and I don't know where NG falls on the scale if they do, but that's another arena for re-considering their business practices.
I'm opposed to telling a business where they MUST sell their products. Certainly, "Minnesotans" don't qualify as a class of citizens whose civil liberties deserve special consideration in law. If Minnesotans are upset about these stupid restrictions on beer distribution, they should petition their legislature to change the law. Then we can see which brewers were being deterred by the regulatory regime and which just aren't interested in distributing in Minnesota.
Hey, residency discrimination is a thing... ("The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.").
"I pick up a six pack every time I drive through WI" is a phenomena created by the embrace of license-generated exclusivity. No one says that about Leine's, because they ponied up the money for the license. NG is using the licensing laws to manipulate the market in that way. So change those laws, and all is well. But let's not pretend it isn't market manipulation enabled through the law.
And I don't like corporations manipulating markets through the law. This is far less offensive then if they were to push for legislation that benefited them or kept out competition or some other such. In fact, this is probably about as low down the "offensive legal manipulation" ladder as you can get. But it's still up a rung from open market participation, and that strikes me as a bad thing.
The best way out is to change the bad law. But that doesn't mean I can't cast aspersions at the people who are using that bad law to their advantage.
But New Glarus is challenging laws. Not national laws, but those are a hell of a lot harder for a relatively small business to deal with than local/state laws.
Also, to put this supply and demand stuff into context, Spotted Cow is the 2nd best selling beer in Wisconsin behind Miller Lite. (I'm pretty sure that's still true, at least. I haven't been able to find sales data to see if it still is, but it definitely was within the last five years, unless I was misled. Either way, they really do sell a lot of Spotted Cow) Think about what that means for their production. Per the repository, they're only brewing about 165,000 bbls of beer, total, per year, yet likely outselling Bud Light, made by AB who make about 120 MM bbls per year.
Hmm... so we know they're willing to challenge laws they don't like. I think the logical implication then is that any laws they don't challenge, they must like. 😉 Even, nay, especially, laws in other states.
I'd love to see what would happen if they were permitted to sell in MN w/o separate licensing approval.
"Market manipulation" is an unfair conclusion.
There was a time when you could not buy Coors in Minnesota. My dad used to pick up some on the drives back from visiting the grandparents in NE Nebraska. But now, I think, they do sell in Minnesota. Why?
They do because Coors determined that it was worth it to them to expand their range of distribution. Just because some random dudes find it worth smuggling a couple of sixers across state lines does not mean that the brewery should spend the money and effort to expand its distribution. That's a business decision shaped in part by a regulatory regime.
History, btw, is littered with the corpses of businesses who expanded too quickly.
I don't think it's illegal to do this - it sure as hell shouldn't be - and as such the fact that it's even a thing should just tickle them pink. This comment should in no way be taken as admission to having received such a shipment from a guy I know who commutes to Wisconsin.
I would definitly order Spotted Cow as a "go-to"draft-beer-with-my-burger kind of brew.
yea, the "smuggling" part was hyperbolic.
I don't think it's illegal to do this
It is in Mississippi. (I may or may not have gotten away with this.)
Oops, not here.
Even if everything Phil alleges about NG is true, I don't know that it's damnable.
They're satisfied being the #2 beer in Sconnie and selling there. Do privately-held corporations have an obligation to maximize and continually expand?
Perhaps they feel that maintaining their niche as Sconnie-only keeps them well-regarded in Sconnie, as a marketing angle.
Probably both.
Corporations are people too!
withered husks?
bleached bones?
dessicated carcasses?
broken dreams and hollowed out pension plans?
Remains.
1. Is licensing just "Here's five grand, give me my license"? Or are there other regulatory barriers? Having to have inspections, file annual reports, etc. Each of those is one more thing to dissuade licensing.
2. Finding distributors isn't free. Who can we trust to keep it fresh? What cut do they want? Etc. I think there's politics to it, some merchants may not work with some distributors or something like that.
Ultimate point: Why put up with the hassle? NG is not the Bad Gal in this sitch.
If that were true, and they are not doing so, doesn't that answer the question?
/Taps nose
Does Surly still sell all of it's beer in MN? I know that was the case for a long time, but maybe the new brewery has allowed them more production.
I know distribution is usually state-by-state.
No, Surly has expanded.
I can confirm that Surly is in Wisconsin.
I feel as though some retailer in Wisconsin needs to be outed and arrested in retaliation.
We have other, newer brewers, that probably haven't decided to get approval to sell in Sconnie.
Why did they wait so long? People were smuggling Surly into other states...
Surely they were twisting the regulatory regimes in other states to their benefit, until they could realize greater profit by being above-board.
I know of one bar that has trucked in kegs of Coffee Bender to DC for a couple of years. I don't really want to wade into this much but just adding a bit of info.
I think much of this is a bit silly unless you know who tipped off whom. But I probably didn't read everything that was over a couple of sentences.
If you hadn't noticed already, sean phreaked the site so you can now play the Video of the Day straight from the front page. So we've got that going for us now.
If by "noticed," you meant "accidentally started playing videos when intending to click through to view them at a larger size," then yes! (I'm not complaining, mind you. I've just been confused about why I keep doing that.)
Except some people have a too tall area for it. I can't reproduce it in Chrome yet so I'm not sure why it's happening. I think either a webkit/blink bug or poorly cached CSS.
I am not cool. I think I once was, but not anymore.
I'm still trying to understand the coffee tie-in. But then again, I've never been cool.
I have established, beyond a shadow of a doubt over the past almost 11 years at this and the former site, that I am definitely not cool. I don't think I ever was.
httpv://www.youtube.com/watch?v=LV0wTtiJygY
So that woman who caught a foul ball in her beer and then chugged the beer at Wrigley on Saturday is apparently a really good college friend of my sister. The friend definitely qualifies as cool.
I have a law school friend who expressed an interest in marrying that woman because of her skills (and fandom).
Cubs fans should be required to only marry Cubs fans to protect the gene pool. 😉
I was just going to post "If only I were single..."
I'm not a bird-watcher, but what was I'm pretty sure an eastern bluebird kept tormenting my cat yesterday my peeking in the window. Beautiful bird.
Are we doing movie day today? Because I'm only a little way in on Daredevil, but I want to talk about it.
Uh, sure. I really need to start getting Mondays off again.
I watched the first two episodes and I think i am done. I can handle a little darker super heron but I can't get on board with a super hero that tortures anybody.
What do you expect from a vigilante?
little darker super heron
You rang?
We are all gonner egret going down this path, aren't we?
If that Goliath decided to eat him, he'd be a gonner egret.
Path of least egret?
Well, it's not a Great Egret. I can't say for sure if it's a Median Egret or Least Egret.
Day game alert: Cedar Rapids at Burlington is getting underway right about now.
Basketball-reference.com has a new feature: shooting percentages by distance of the shot, grouped by 0-3 ft, 3-10 ft, 10-16 ft, 16 ft to < 3pt, and 3ptrs. This goes back to the 2000-01 season. Player A, shooting percentage, by 2pt. distance: .685, .441, .461, and .454. Player B, shooting percentage, by 2pt. distance: .634, .450, .440, and .406.
the worst part is that Player B has taken a plurality of his career FGA from that 16 ft to < 3pt range.
The day I am cool is the day Earth blows up.
Jonah Keri talks Twins this week in his weekly rankings.
I think playing left field in TF is actually about as tough as RF because of all the room out there.
How can anyone that brings up defensive metrics this early in the season be taken seriously?
When they're knocking ii, I'm willing to give them a pass.
I don't think they're all that different from what the eye test tells us is happening. And it's not surprising given the "talent" on the roster.
Torii is over 40 and he looks slow. His numbers were awful last year.
Just because the sample is small, doesn't make the conclusion false. All are in agreement.
Actually, he's 39. He'll turn 40 in July.
"He's still only 39. Nobody doubts his talent."
😉
Yup. It would be one thing if there were a couple of freak outliers, or if it said that a Buxton-type had strongly negative numbers, but I don't expect these to turn around.
Neither the advanced stuff nor the eye test give Torii a pass on the this.
http://kungfury.vhx.tv/
I cannot wait to watch this in its entirety.
Apparently the good folks in State College PA have issues with fighting words.
Looked back at that 2010 NHL Draft class.
The Wild picked 9th and took C Mikael Granlund, considered by the NHL Central Scouting Bureau to be the top European skater in the draft.
The Blues picked 14th, selecting C Jaden Schwartz, not considered a top-10 North American prospect.
The Blues also picked 16th, selecting RW Vladimir Tarasenko, considered by those Central Scouting folks to be the second-best European in the draft.
These three players are similar ages (23 or nearly) and have the same (or similar) amount of time playing in the NHL, making their first appearances in 2013-2013 and playing most of their clubs games during the past 2 full seasons (barring injury). Their lines over their first three seasons:
Minnesota Sports Gonna MInnesota Sports - No Surprises here:
[minor edit] all made their initial appearances in the 2012-13.
This is a stunning story about "missing" black men, i.e. black men who die early or are incarcerated.
I saw that, and it is stunning. However, I'm curious if Door County's high rate of black men is because of the Packers.
Presented without comment