Sunday, April 19, 2009

Protectionist Law Impeding Competition, Consumer Choice

This issue
should be a non-issue.
The developer aiming to bring the popular Trader Joe’s grocery chain to Minneapolis got a wary reaction from residents and others at a Whittier neighborhood meeting Monday night. Some residents spoke in favor of the plan, but others—including the Wedge Natural Foods Co-op less than a half block away—say the corporate retailer shouldn’t get any special favors that might give it an unfair marketing advantage.

Mark Dziuk is hoping Trader Joe’s will be the anchor tenant in a large commercial and residential project on a busy block of Lyndale Avenue South. The problem is Trader Joe’s won’t sign on unless the store is allowed an adjacent wine and beer store, but state law prohibits liquor stores within 2,000 feet of one another in Minneapolis and St. Paul. Hum’s Liquors, a neighborhood icon for the past four decades, is practically right across the street. If Dziuk wins the exemption to the state law, it would be the first in Minneapolis.

I agree with the Wedge in this case in that Trader Joe's shouldn't be given special treatment. But the special treatment Trader Joe's seeks shouldn't even be an issue in the first place. This is all the fault of some arbitrary protectionist law from 70 years ago (that would be 1939) that isolates liquor stores from competition by prohibiting competing stores from being within 2,000 feet of each other. A defensible (but not necessarily correct) argument for this law is that it might prevent any single area from becoming "liquor store alley." Even if that line of thinking is valid and even if that's a value which the community consents to, then surely the law could be written better. For example, instead of always using one distance (2,000 feet) to regulate liquor store density, why not allow more liquor stores for denser-populated areas or areas with greater pedestrian/vehicle/transit access? There's no reason a small rural town of 500 people should be bound by the same law as a densely-populated corridor in a large cosmopolitan city.

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