Supermarkets selling wine, and liquor store insanities

I hate taxes and government-imposed fees as much as the next guy. When Governor David Patterson announced that he wants to increase licensing fees for stores that sell wine (to the tune of up to $300 million in new tax receipts over two years), I wasn’t impressed. But one side effect of this did impress me: the hope that such changes would allow wine to be sold in stores other than liquor stores, notably supermarkets.
Unfortunately, not everyone believes that retailers should be allowed to sell whatever they want, even if it means bringing in more money to Albany. State Assemblyman Lou Tobacco (R-Staten Island) had this to say:

The purpose of a liquor store is to sell liquor, they’re not going to make any money selling chocolates and cigars. There are over 1,000 independent liquor stores in New York State. If this happens, it will have a ripple effect to local economies with the loss of business and jobs. This would really be detrimental to the loss of mom-and-pops.
Source: Weak support for Paterson’s plan to allow wine sales in supermarkets (FoodBizDaily)

To this, I have a few comments and observations.

  • Shouldn’t the liquor store decide whether it can or can not make any money selling chocolates and cigars, not a bureaucrat?
  • Liquor stores sell more than just wine; they also sell liquor, which supermarkets would still not be able to sell.
  • Why can’t liquor stores sell beer? It is an alcoholic beverage, just like wine and liquor, yet this is sold only in supermarkets.
  • Why can’t liquor stores be open 24 hours per day? Why can’t they sell their goods before 9AM on a Tuesday, or after midnight on a Saturday, or at 11:30AM on a Sunday?
  • Supermarkets will likely not stock the selection of wines that liquor stores do. Supermarket shelf space is valuable, and they rely on high volume and low margins, and will not replace the selection and service of liquor stores. (Source: Wikipedia)

To add to the insanity of this, did you know that 35 of the 50 states permit wine sales in supermarkets and liquor stores? Blogger Dr. Vino asked some retailers questions related to this (Wine shops in states with supermarket sales – three views). The responses from those retailers is interesting; the comments to the blog post are enlightening. I recommend reading them if you want a wider perspective than mine.
The final insult to injury: a recent Siena poll showed that 58% of New Yorkers would support the sale of wine in supermarkets and grocery stores, and only 39% would object. To this, Assemblyman Tobacco was reported as not being “impressed by the number” (source: SILive.com). Nice to know that the standing elected official in a representative government disregards the opinions of his electorate.
Unrelated side note: While doing the research for this article, I noticed that two articles, one written by an anonymous staff writer at FoodBizDaily.com and one by staff writer Judy Randall on SILive.com, to be suspiciously similar, and in my opinion borderline plagiarism. Someone seems to be borrowing content from the other. Very sad, if it is true.
Additional Sources:

Two simple ways to reduce health insurance premiums

Summary:
Many people are burdened by the high cost of health insurance premiums. There are options to reducing these premiums without sacrificing quality of care, and without risking a failed overhaul of the health care industry.

A 2009 study by the AHIP Center for Policy and Research, entitled Individual Health Insurance 2009: A Comprehensive Survey of Premiums, Availability, and Benefits (PDF download), reveals a great deal of facts about health insurance premiums throughout the United States.
Going through this report, one can identify two simple but effective steps to reducing the cost of health insurance:

1. Allow people to buy insurance from out-of-state.

Consider three facts revealed in the study:

  • Residents of New York pay the highest annual health insurance premiums ($6,630 for individuals, $13,296 for families).
  • The national average is less than half of that ($2,985 for individuals, $6,328 for families).
  • Lucky residents of North Carolina (a not uncommon retirement place for former New Yorkers) pay even less ($2,613 for individuals, $5,120 for families).

Conclusion: Allowing New Yorkers to buy insurance out of state can save up to $6,000 per family per year.
What harm could be caused in this? Is insurance from North Carolina (or any other state, for that matter) so inferior to insurance in New York? Neighboring states like Connecticut have rates up to 40% lower — why can’t we take advantage of those? If someone insured in New York can get medical coverage while visiting relatives in California, why can’t they buy (cheaper) insurance from California?
The irony is that out-of-state insurance is prohibited for individuals but permitted for employers. My employer has offices in New York (where I work), San Francisco, Seattle, and Michigan. Some employees live in those states, and some live in New Jersey, Pennsylvania, and Washington, D.C.. The health plan originates in Michigan, yet we all participate in it and get more than adequate health coverage. If an employer can do it, why can’t an individual? (I’ll tell you why: a bureaucrat said you can’t, so insurance providers don’t offer out-of-state options.)
(For more, read Rx: The Interstate Insurance Competition Cure.)

2. Expose the cost of employer-provided health premiums to employees, and give them options.

In the study, the average premium for a family plan with no annual deductible was $12,686. Increasing to a $1,000 annual deductible (whole family) reduces that by nearly $5,000. Why on earth would someone pay $12,000 for a plan with no deductible, when you can buy a plan with a $1,000 deductible for $4,000 less? No one would; but they would it someone else is paying, of course.
Consider if you were buying a car with someone else’s money. What incentive do you have to keep costs down? You can go for a $5,000 used car, but it isn’t your money, so you will try to get a $20,000 new car. Or maybe something more luxurious — maybe a $35,000 car with all sorts of navigation and entertainment systems. After all, it isn’t your money, so why be frugal?
When health insurance is provided through an employer, the only costs we know of are our co-payments and our contributions. In many cases, both of those are overshadowed by the overall cost of the plan, which is paid by the employer. The actual cost is hidden from the employee. As a result, employees — notably trade unions, who have more leverage than individuals — will wrestle the best possible health insurance plan from employers. The “gold-plated” plans you hear about aren’t just for the executives; it’s also for labor unions.
If your employer gave you the choice of a $1,000 deductible health insurance plan and a $5,000 raise, or a no deductible health insurance plan and no raise, what would you choose?

Small changes can yield big results

Health care reform is difficult because the health care industry is huge. Taking up greater than 16% of the entire GDP, and growing each year, health care takes up no less than $2 trillion of our economy. To think that 500 or so bureaucrats, together with their advisers, can redefine such a large part of the U.S. economy is foolish (even in 2,000 pages of legislation).
Instead of total reform, we need to make incremental changes; to review the effectiveness of those changes; to make continued, small adjustments along the way; to set and work towards achieving reasonable, long-term goals. In software development, this is known as the agile method (allowing solutions to evolve through small incremental changes). Similar principles can — and should — exist in public policy.