Industry Experts, Business Leaders: Michigan’s Alcohol System is Strong, Pro-Growth
LANSING – Michigan’s existing system of alcohol regulations and safeguards has helped manufacturers, distributors and retailers in the beer and wine sectors succeed economically while balancing public safety and health priorities, panelists at a Center for Alcohol Policy (CAP) forum said today.
Jim Hall, CAP Advisory Council member and former chair of the U.S. National Transportation Safety Board, credited Michigan’s forward-looking system of alcohol regulations with driving the growth of the local beer and wine industries, opening new markets and creating value.
Today, Michigan is home to more than 90 craft brewers, ranking the state fifth nationally. Michigan is also home to 178 wineries (ranking it eighth nationally), 130 distributors (sixth nationally) and more than 16,200 retail outlets for beer and wine. Altogether, the alcohol industry employs nearly 40,000 people statewide and has an economic impact of more than $5 billion each year.
“The alcohol industry in America is strong – and here in Michigan, you are a leader in creating jobs and economic impact,” Hall said.
The forum, “The Economic Impact of the Alcohol Industry in Michigan,” was the first of the CAP’s 2012 Michigan Alcohol Policy Series and featured presentations by Michigan’s leading craft brewer, Larry Bell, founder and CEO of Bell’s Brewery; Auday Arabo, president and CEO of Associated Food & Petroleum Dealers, representing more than 3,000 large and small retailers in Michigan; Mike Brown, partner at Carlin Edwards Brown, PLLC; Ed O’Keefe III, president of Chateau Grand Traverse Winery; and Mike Lashbrook, president of the Michigan Beer and Wine Wholesalers Association, which represents nearly 60 family-owned beer and wine distributors.
Bell said the growth of Michigan’s domestic craft beer sector is the result of hard work, innovation, entrepreneurship – and a system that allows small brewers to compete on a level playing field with large producers.
That framework, also known as the three-tier system, requires alcohol producers to sell their products to independent, licensed distributors, who then sell the products to individual retailers such as grocery and liquor stores.
“The three-tier system in Michigan provides for a level playing field and allows small brewers to get their products to market,” Bell told the audience.
Today, Bell’s Brewery is the 14th largest craft beer producer in the nation, producing more than 240,000 barrels a year. Bell said Michigan’s craft beer sector is also driving tourism through craft beer festivals and sports and arts sponsorships.
According to O’Keefe, Michigan’s wine industry is also experiencing tremendous growth, with 590,000 cases of wine sold in Michigan in 2011 (up from 334,000 cases in 2005).
Arabo said Michigan’s regulations have found the right balance between meeting the needs of businesses and the need to protect public health and safety.
“Michigan is the best of both worlds,” Arabo said. “From a retailer standpoint, it is a very good system.”
While he voiced support for updating an overly cumbersome licensing process in Michigan that dates back decades, Arabo cautioned against changes that impact public health and people’s safety – including possible proposals to increase the number of alcohol licenses.
“Just because you have more licenses, doesn’t mean you will have more sales,” Arabo said. “At the end of the day, we are all parents, grandparents, members of our community – and we have to be responsible. We’re not selling milk, eggs or bread. We’re selling alcohol.”
Session Two of the series, “Public Safety and Law Enforcement in Alcohol Regulation,” will take place Wednesday, April 18, 2012; and Session Three of the series, “What’s Happening in the World of Alcohol Regulation,” will take place Thursday, May 3, 2012. All sessions will be held at the Radisson Hotel in Lansing.
Download the full Session One presentation here.
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The Center for Alcohol Policy is a 501c(3) organization whose mission is to educate policy makers, regulators and the public about alcohol, its uniqueness and regulation. By conducting sound and scientific-based research and implementing initiatives that will maintain the appropriate state-based regulation of alcohol, the Center promotes safe and responsible consumption, fights underage drinking and drunk driving and informs key entities about the effects of alcohol consumption. For more information, visit www.centerforalcoholpolicy.org or follow the Center on Twitter at www.twitter.com/AlcoholPolicy.