Over the weekend, I visited a whiskey distillery, StilL 630, in downtown Saint Louis. The owner and operator of the company talked about why he chose to set up in the city. Missouri’s reasonable alcohol regulations were one factor that made his business possible. In Missouri, unlike many other states, a brewer or distiller of any size can produce, sell, and distribute their own product.

The ability of a company to sell and distribute its own product seems like common sense, but that right is under attack in neighboring states. For example, just last Friday, Kentucky enacted a law that bans breweries from distributing their own products. This law, which legally protects three-tiered beer sales, was a blatant attempt to protect independent alcohol distributors and may force companies like Anheuser-Busch to sell its Kentucky distributors. Missouri has flirted with these types of regulations in the last couple years. As Director of Development (and former Policy Analyst) David Stokes wrote in 2013 regarding SB 412:

I recognize that the rules for alcohol distribution have been in place for a long time, but that is not a justification in 2013 for new rules that prevent a maker of alcohol from simply having an ownership interest in a distributor of alcohol. . . . I can imagine no market failure or public good problem that this proposed law would address. The point here seems to be the preservation of existing distributorships and the limiting of competition. . . . Simply put, the government should not mandate the use of a middleman.

Missouri’s reasonable alcohol regulations promote small-business creation, helps large companies operate efficiently, and can ultimately benefit the consumer. Missouri should hold onto that advantage and resist any temptation to move in the direction of Kentucky’s legally enforced three-tiered system.

The post Low Alcohol Regulations Benefit Missouri Business appeared first on Show-Me Institute.

• Plans are for a new stadium located on the riverfront, north of Lumiere Casino and northeast of the Edward Jones Dome.

• The stadium also would be available for professional soccer.
• It would be a public asset owned by a public entity and leased to the team. Also, the new stadium would come with a new lease, 30 years or more.
• Cost estimate: $860-$985 million, at least half of which would be privately financed (minimum $200 million from Stan Kroenke and another $200 million from the NFL).
• No new tax burden, although there would be public money involved.
• Estimated completion date: 2020.

After listening to the press conference and going over some of the points raised here, I have my misgivings about this project. First, I would like to know specifically where the money is coming from to pay for this new stadium. During the press conference, Peacock said that the sources of public financing would not be ascertained until there was a commitment from the NFL and from the Rams on moving forward with this project. Second, the $860-$985 million price tag would only be for the new stadium. Additional money (it wasn’t said how much) would be needed to upgrade the current Dome so it will be a full-time convention center. How are we going to pay for that as well?

My biggest misgiving is the fact that we will be publicly subsidizing this thing at all. Kroenke’s proposal in Los Angeles would be completely privately financed. Why should the public put up money when Kroenke can afford to pay for the costs himself? The most recent trend in stadium construction is toward private investment. That’s what happened in San Francisco and New York, so why should Saint Louis be different?

I know it is easy to be wowed by beautiful pictures of sparkling developments like the one above. Yet, nice pictures aside, these kinds of plans do not produce the economic benefits that would make these developments worthwhile. I want Saint Louis to remain an NFL town, but I don’t want to spend taxpayer dollars to do it.

The post Thoughts on the Latest Rams Press Conference appeared first on Show-Me Institute.

Apparently, in other circumstances, you can play big and always win big if you know the right people and have enough money. Especially if your name is Paul McKee.

I recently wrote about the lack of progress on McKee’s NorthSide Regeneration project in North Saint Louis, despite the $40 million he has already received in tax credits.

One specific state tax credit, that only McKee is eligible for, is set to expire in April. But not if he can help it. Seventeen lobbyists registered on Monday to represent the NorthSide project, which the St. Louis Post-Dispatch notes is the same amount that represents Ameren Corp. and Anheuser –Busch, combined.

When will McKee end his relentless pursuit of tax credits?

Unfortunately, priorities shift when business becomes intertwined with the government. Relying on the government often incentivizes companies to hire people with the ability to work with government, not the ability to complete projects.

Ludwig Von Mises discusses this problem in Bureaucracy (pages 76-77, if you are interested). He writes, “Why bother about bringing out better and cheaper products if one can rely on support on the part of the government? For them [corporate executives] government contracts … and other government favors [are] the main concern.”

This reliance on government favors is not necessarily McKee’s fault; he did not create the system. But this is not an excuse to let it continue. We need to change the system that encourages businesses to spend significant resources on government lobbying instead of investing efforts into their business. It is time for Missouri to cease “business as usual” and put an end to corporate welfare.

The post Gotta Spend Money To Make Money? appeared first on Show-Me Institute.

It is not clear who approached whom with the proposition to make Grant’s Farm a national park, but one can only hope it was not the National Park Service. The budget for our national parks is already strapped, and the lack of funds is evidenced by deteriorating infrastructure. The last thing needed is to add one more park to be maintained with public funds. Furthermore, the growing national debt makes it unlikely that the NPS will be receiving a significant increase in funding in the near future.

I believe Grant’s Farm has the potential to become sustainable if it were to charge an entrance fee. The 273-acre animal preserve is visited by 550,000 people a year, more than enough demand to allow the parks owners to cover costs — or even turn a profit, if management operates the park efficiently.

I hope the Busch family and Anheuser-Busch continue to run Grant’s Farm, even if that means charging an entrance fee. Grant’s Farm provides a unique experience that will be lost if it falls under government control.

The post Grant’s Farm a National Park? appeared first on Show-Me Institute.

The colleges allege trademark infringement. The beer cans don’t feature any mascots or logos, though, so I don’t see how Anheuser-Busch could be in violation of trademark. Surely, these schools don’t have a monopoly on color combinations like blue and yellow.

Regarding marketing to underage students: It’s true that most college freshman and sophomores aren’t old enough to drink, but what about the juniors, seniors, graduate students, and faculty? Are they off-limits, too?

The FTC would have a weak legal case because of a concept called “free speech.” The government can’t forbid a company to use a combination of two colors on a package. However, that doesn’t deter an FTC lawyer from harassing Anheuser-Busch:

“We would certainly hope that something like this never happens again,” she said.

The post Beer Cans and Freedom appeared first on Show-Me Institute.

So, should Missouri institute a deposit law of either a nickel or dime? I think it should. It would be one way to encourage positive social behavior (recycling bottles) through incentives rather than directives. You don’t have to recycle if you don’t want to, it will just cost you $1.20 extra per case of beer. This is not a tax you have to pay, it is one you choose to pay, and the behavior encouraged is so simple to do it can hardly be considered onerous or burdensome. So, I say bring on a 5- or 10-cent deposit law in Missouri. Let me know what you think in the comments.

The post Should Missouri Have a Bottle Deposit Law? appeared first on Show-Me Institute.

Shocking. You know who else stands to benefit? Me, probably you, and just about everyone else.

Who actually owns AB? The Busch family? Its employees? The city of St. Louis?

Let’s take a quick look at AB’s latest financial statements. The largest individual shareholder of Anheuser-Busch (owning about 5 percent of total shares) is Warren Buffet. Well, he’s from Nebraska, so obviously he’s an outsider. But what about institutional investors? Well, a British conglomerate owns about 6 percent. And Mr. August Busch? A whopping 0.2 percent (though I believe he has about 4 percent of the voting power)!

And you know who else owns AB? Me, along with several hundred thousand of my closest friends at Vanguard. And probably Barack Obama, Francis Slay, and Matt Blunt, too.

Saint Louis has no “right” to AB when only one percent of the entire company is owned by AB insiders. And more than that, how do Missouri governmental officials have a right to have any say in a shareholder decision whatsoever?

One comment in the Post-Dispatch article is particularly misguided:

[H]ow ridiculous to say that Barack Obama wants the brewery to remain American while Republicans want it to go. Hello!?! Republican (Ex Chief of Staff to Matt Blunt) Ed Martin is behind the “SaveAB.com” along with SEVERAL other Republican operatives.

I don’t see all of these Democrats in the city doing much to stop the deal.

As well they shouldn’t, because it’s none of their business. This is a decision for the 99 percent of the company owned by outside investors. That’s how a free-market economy works. As voting shareholders, we can each choose to vote however we please. But what we cannot do is ask our government to step in and force a decision on our behalf. There is nothing less American than that.

The post More Lunacy Regarding Anheuser-Busch appeared first on Show-Me Institute.

Referring to Anheuser-Busch, the News Tribune quotes Missouri Sen. Claire McCaskill:

"[…] This is a company that’s been profitable year in and year out and has provided good middle-class jobs in America. It feels like to too many people in our country right now that these are the kinds of jobs that are going away."

This seems a bit confused. It assumes that if InBev does successfully purchase Anheuser-Busch, it will move the production facilities overseas. This isn’t necessarily the case. In fact, in the same article, InBev CEO Carlos Brito is contends:

"What we’re proposing basically is really to take an American brand, so successful as Budweiser, and unleashing that to the world via our distribution system," Brito said.

Taken at face value, this quote suggests that there is no reason to assume that InBev wants to move the production of Anheuser-Busch beer overseas. Even if this were right, the idea that the move would cause job losses to the U.S. is still misguided. A certain Frenchman is always relevant. The problem lies in focusing only on what can be easily seen — the jobs lost overseas. A careful analysis will also reveal what is unseen.

If InBev were to move Anheuser-Busch’s production facilities overseas, suddenly a large amount of consumption goods in the U.S. would be imported rather than produced domestically. If this occurs, the importer (in this case, InBev) can do one of two things with the U.S. dollars it receives: invest in U.S. assets or purchase export goods. To the degree that the former occurs, domestic industries are able to expand and create new jobs with the increased investment. In the latter case, export industries see increased demand and respond by ramping up production, creating new jobs.

The net impact of the move overseas on job creation is ambiguous without empirical data, but it isn’t obviously negative (or positive, for that matter) because there are effects running in both directions. The likely long run effect would be minor, if there is one at all. This is assuming that all else is held equal, of course. Without any evidence to suggest that the net effect would be negative, inferring that it would be negative is a bit rash.

One might argue that this is all well and good for an entire country, but what is at stake in this case are the jobs of Missourians — or, more accurately, St. Louisians. This argument is also misguided. The above analysis applies no matter where the border of the domestic region is defined, whether it be St. Louis or your own backyard.

The post Removing the Beer Goggles appeared first on Show-Me Institute.

“I was very upfront,” McCaskill said of her discussion with [InBev’s CEO Carlos] Brito. After offering him a Budweiser and sipping one herself, she told him she would “do everything I could to stop this sale from going through … It’s a bad idea. I don’t want you to buy it. The people of Missouri don’t want you to buy it.”

Politicians never seem to understand how capitalism works. The InBev deal is not the government’s decision or the people of Missouri’s decision. It is the decision of the shareholders of Anheuser-Busch. If shareholders reject the InBev deal, AB stock will plummet. But that is the shareholders’ decision, not ours.

More from the article:

Speaking to reporters after, McCaskill blasted the proposal as a “premium profit for hedge fund investors” and said A-B is a strong company that has provided thousands of good middle class American jobs.

Anheuser-Busch displaced thousands of good middle class American jobs last year when it bought out Pennsylvania’s Rolling Rock. And despite a website that looks very familiar to another local website, there was no outcry (or even a tear) from Missouri public officials.

“We do not have a ?For Sale’ sign on our front lawn in America,” she said.

Well, then maybe the government shouldn’t have gotten to the point where the American people owe $9.2 trillion dollars (of which about a third was accumulated under President Clinton, and another third under President Bush). If I owed trillions of dollars in debt, I might have to sell off a few possessions, too.

The Post-Dispatch (surprisingly) ran a pretty good reality check on the AB deal. And yours truly did, too.

The post This Bud’s for Them appeared first on Show-Me Institute.

Signals that public-private partnerships to manage Missouri roads give him "deep concerns," because of the potential for foreign ownership . . . Still, Jay Nixon leaves "everything on the table."

Having co-written an entire study of this subject, let me repeat that there is no "ownership" in a public-private partnership. The private partner leases an existing asset, or obtains the right to build and operate a future asset, but does not own it. The people of Missouri, through state government, would always own any infrastructure built or operated under PPPs.

As for the "foreign" part, I can’t fathom why this bothers so many people so much in these cases. It’s just a frickin’ road. (As an aside, I can understand why potential foreign ownership of Anheuser-Busch bothers people.) There are plenty of American campanies that can bid on these projects, and the leading international companies that do this type of transportation PPP are based in Australia and Spain. If we were to decide that we needed to really finish what we started in 1898 and return to war against Spain, like Rome v. Carthage, it’s not as if a Spanish company that built and operated a Missouri bridge could take the bridge and move it back to the Iberian Peninsula. This is foreign investment in America, that could potentially provide new transportation infrastructure only at a cost to people who choose to use the asset, and unlike the AB/InBev situation, no current jobs would be at stake. Why this upsets so many people is beyond me. …

The post A Post About Foreign Ownership That Has Nothing to Do With InBev! appeared first on Show-Me Institute.

“Americans don’t want the Statue of Liberty bought by the Saudis or the Washington Monument purchased by the Chinese. Shareholders should resist choosing dollars over American jobs. Selling out to the Belgians is not worth it ? because this is about more than beer: it’s about our jobs and our nation.”

While I certainly appreciate the sentiment and nostalgia surrounding the Anheuser-Busch drama, I cannot agree with the author’s logic. The InBev bid is a perfect example of what capitalism is all about — the migration of capital to the places where it can be used most productively. It is this free flow of capital that has powered the U.S. economy since its inception.

For example, during the past decade Toyota has created 36,632 new American jobs. Is Toyota destroying U.S. culture? No. It has been fundamental in fueling innovation in the automobile industry and ensuring that those 30-some-odd thousand families have a home to live in and food on their plates, and are able to contribute to the growth of the U.S. economy. In fact, there are currently more than 5.1 million Americans (4.4 percent of the entire labor force) employed by non-U.S. companies. If we deny Anheuser-Busch shareholders the right to choose whether to accept InBev’s bid, what are we saying about the long-term prospects of millions of Americans’ jobs?

Moreover, if foreign investment is such an “affront to democracy,” then why is the Missouri legislature paying Bombardier Aerospace (a Canadian airplane manufacturer) millions (of taxpayer money, no less!) to build a factory in Kansas City? If we rely on nationalistic sentiment, shouldn’t we demand that those jobs remain in Toronto? Or shouldn’t we demand that Anheuser-Busch bring back the jobs of the nearly 24,000 people it employs outside of the Saint Louis area? If we were to follow this kind of protectionist sentiment to its logical extreme, we would simply revert back to an economy of sustenance farmers, completely dependent upon our local economies for our entire means of production.

How “American” is that?

The post Ice-Cold Beer in a Red, White, and Blue Label appeared first on Show-Me Institute.

Although I can understand where they are coming from (securing local jobs, pandering to voters, etc.) this blatant act of government interference is unnecessary and quite ridiculous. This is a possible acquisition between two publicly traded companies, and for government officials to even suggest impeding the process is outlandish. Officials even acknowledge there is nothing they can lawfully do, yet they insist on causing a commotion in hopes that InBev will retract its offer and ride off into the figurative sunset. There is no doubt that Anheuser-Busch has played an influential and charitable role in the development of St. Louis, but after all, it is a private corporation and if it decides selling to InBev is in the best interest of shareholders, no government official should try to obstruct the process. It is not the responsibility of government officials to determine what is best for a private entity, and they are grossly overstepping their boundaries in attempting to influence the outcome of this particular situation.

Personally, I hope the shareholders of Anheuser-Busch reject the offer and the organization remains a pillar of stability in St. Louis and throughout Missouri. After all, InBev Stadium just doesn’t have the same ring. With that said, if stockholders agree to a sale and the government continues to try invoking its (phantom) power to affect the outcome, it will just be another case of the government acting inappropriately and out of its realm of authority.

Ah … the politicking that takes place during an election year.

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My favorite part of the article is the section on how the retailers that sell gas in Missouri often sell other products (left unsaid is that the main product is beer) that allow them to keep gas prices low and make nice profits on those other sales. We often forget in Missouri how much stricter other states can be about who, when, and what can sell alchohol. Here, we just buy it at gas stations, grocery stores, liquor stores, blood donation centers, anywhere. And we can buy it just about anytime except early Sunday mornings. My friends and I made innumerable late-night beer runs from Fairfield, Conn., to Portchester, N.Y. (one-hour round trip if you drove really fast), in college because of Connecticut’s stupid 8 p.m. alchohol sales cut-off law. Dear God, do I love Anheuser-Busch and its lobbying efforts!

The post Missouri Gas Makes the Slate appeared first on Show-Me Institute.

However, what if wine just seems a little too “fancy” for
your next adventure across the Lake of the Ozarks Community Bridge to a certain section of Camden County, and you don’t want to deal with the hassle of
visiting your neighborhood gas station/pharmacy/liquor store/grocery store to
pick up a few cans of Missouri’s official beverage? Can’t it just be delivered to your home?

Actually, no. Anheuser-Busch (along with every other brewery
and distillery in the state) cannot ship directly to consumers. The reason
for this happens to be the same reason that people in Kansas and Utah won’t be able to take advantage of Amazon’s most recent business venture: After
prohibition, almost all states in the union moved to what is now known as the
three-tier distribution system, composed of manufacturers, distributors, and
retailers of alcoholic beverages. This system was designed to ease the states
back into alcohol consumption, and to further regulate companies like A-B.
However, its separation has led to the notion that producers cannot sell
directly to consumers. In Kansas,
this means that wine can’t be delivered directly to your home. In Missouri (thanks to the
input of a remarkably powerful wine lobby) it can, but you still have to buy
your beer at the store, because the beer lobby is more concerned with other things. This isn’t a big deal if you want to get a Budweiser,
but if you’re in Kansas City and you want to sample the latest Schlafly Reserve, or you’re stuck in Saint Louis without a
special kind of Boulevard, you’re out of luck.

The only solution to this problem? Eliminate the three-tier
system and allow manufacturers to sell directly to customers. This will keep
prices down for consumers and allow for more freedom for direct-delivery
purchases, for both beer and for wine. I really doubt anyone at A-B would be
sad if they were able to sell direct, both because revenue would skyrocket and
because no midlevel jobs would be lost — distributors of A-B products are all
monopolistic in their sale of the company’s products as is. Meanwhile, all of Missouri’s smaller
breweries would no doubt see an increase in business as their distribution
areas grew. How can this not be a good thing?

The post ’47 Cheval Blanc … to Your Doorstep! appeared first on Show-Me Institute.

If you have ever been to a state-operated liquor store in Pennsylvania — and they are all operated by the state — you know that you can only buy beer by the case. There is a proposal to change that, and allow beer to be sold in various six-pack quantities: six, 12, 18, or the beloved case of 24. This change would make beer sales in Pennsylvania pretty much like they are in the rest of the western world. Unbelievably, the microbreweries in Pennsylvania are opposed to the 12- and 18-pack allowance. I’m all for making sure small businesses have everything they need to compete, but not at the expense of basic economic choices for the consumer. From the article:

The problem for many is the proposal to allow the sale of 12- to 18-packs of beer: Smaller breweries don’t have the packaging equipment to produce those sizes. It would give larger breweries an even larger price advantage.

"Who’s this bill going to help? It’s certainly not going to be the little guy," said Joseph Piccirilli, consultant to the Iron City Brewing Co. near Pittsburgh, one the state’s larger brewers.

Arguing against these changes just because smaller companies might have to invest capital in packaging equipment is NOT a worthwhile argument against giving consumers more options. The supporters of the bill have some very sensible counterarguments:

The two senators contend the measure would help in-state brewers by creating more outlets for six-pack sales. Customers now may be reluctant to try a case of their beer because if they don’t like the taste, they are stuck with unwanted bottles.

That seems very logical to me, although truth be told I pretty much just drink Budweiser, so I am not the ideal test case here. I also usually buy my beer by the keg instead of in six-packs or cases. (I’ll let you decide whether or not that is a joke. And please note that the required Missouri connection for this blog post is Anheuser-Busch’s extensive lobbying for these changes.)

Here is an obnoxious quote from a microbrewer who clearly enjoys people having the freedom to drink alcohol, but only on his terms:

"There’s not one microbrewer in this state that can make an 18-pack, not one," said Piccirilli, the Iron City consultant, who supports expanded access to six-packs, even 12-packs, but nothing beyond that.

Another microbrewer apparently knows more about both economics and human nature (the two go closely together), and trusts his product and his customers a little more:

Tom Kehoe, president of Yards Brewing Co. in Philadelphia, agreed that the larger-size beer packs would put a strain on in-state brewers. But he does not believe it will drown the state’s craft-beer businesses.

Microbrews, Kehoe said, appeal to a different kind of beer drinker, who usually won’t buy from "the big guys."

I subscribe to the beer theory of civilization, and beer is a great part of life. People should be able to responsibly enjoy it in whatever quantity they choose to buy it. (Safety-based limits are another issue — a drunk should not be able to buy a case on his way out of the bar.) These choices should be up to consumers, not laws backed by breweries.

The post Beer Bloggles appeared first on Show-Me Institute.

Perhaps Blog KC says it best when they comment that “such a move would give Missouri a monopoly on sh[!#$@] yellow beer.”

Not to mention one more thing to fight about.

The post Coors-Miller HQ: Kansas City? appeared first on Show-Me Institute.

Jeleesa had wanted to be a lawyer. Cole opened the phone book and started writing letters. She figures she sent one to every law firm listed. Then she wrote to companies — big ones, like Monsanto, the former Ralston Purina Co., and Anheuser-Busch.

Cole’s life became a hunt for connections. She scribbled names on scrap paper at meetings, at work, at school. She came away with lists of charities, foundations and businesses. She tracked down the Knights of Columbus, Catholic Charities and even pro football players.

Low-income families shouldn’t have to work as full-time fundraisers just so their kids can get a high-school education. But the positive side of this story is that it shows how beneficial parental choice can be. When Jeleesa had to improve her grades in order to stay at her new private school, she excelled beyond everyone’s expectations.

The post Choice Against the Odds appeared first on Show-Me Institute.