Is Contaminated Alcohol Sincerely A Reason to Regulate?

We’re interrupting this Beer Industry Fair Dealing Act Thursday to bring you something better.

Some recent comments about homebrewing, alcohol regulation and the notion that one of the justifications for alcoholic beverage oversight is the danger posed by potentially contaminated products have little support.

The standard thought about this industry’s regulation is that it’s the government’s interest in collecting tax on a product that created the intricate history and regulatory systems applied to alcoholic beverages, not some need to ensure that bad beer didn’t make it to the public.  Every history of beer that I’ve read either discusses in detail, or at least pays homage to, the fact that until recent times, beer was safer than most drinking water on account of a brewing process that involves boiling.

Not even the U.S. legislative history offers support for the notion that alcohol requires regulation as a possible source of contaminated food.

In 1935 Congress passed the Federal Alcohol Administration Act to regulate the alcoholic beverages industry.  Over at Archive.org there’s this amazing little gem:  The Legislative History of The Federal Alcohol Administration Act.  It’s a comprehensive look at some of the legislative debate, congressional comments and concerns, and cultural impetus for passing the Act back in 1935.

Now, the Jungle was published in 1906.  The Pure Food and Drug Act of 1906 was certainly an acknowledgment that the food industry needed regulation to ensure public safety.  The eventual creation (after many other names) of the FDA and the food regulation that went on in the 1930s bears out the point that around the time of this act, there was a public understanding that the food industry needed comprehensive oversight.

So you’d expect that in 1935, at the height of public concerns about a growing industrial system that needed regulation to ensure that the public got uncontaminated food, that if the government really considered contaminated booze a problem, there’d be some mention of the need to regulate alcoholic beverages for this reason.

But it doesn’t.  In fact, the legislative history bears out the notion that first and foremost, the government’s concern is revenue.  These notes from page 19 of the legislative history concerning how the new agency should be structured shed light on this subject.  The last few comments are particularly interesting  to small producers who think that the amount of present regulation makes it almost prohibitive to get into the business – remember, this is 1935:

“Note. — It was recommended by the F. A. C. A. that an independent agency be created to administer the act. Mr. Choate, in testifying before the “Ways and Means Committee of the House, gave the following arguments for his belief that an independent agency should be established: First, that the administrative officer was endowed by the bill with complete responsibility for the execution of the powers and duties imposed by the bill and should also be given complete and final authority to carry out his powers; second, that the Treasury’s function has always been the collection of the revenue and that it is not suited to the regulation of the liquor industry for the correction of social evils, governmental problems, and the industry’s own economic welfare; third, that the Secretary of the Treasury would be subjected to great pressure to give the final decision on questions he could not be qualified to answer: fourth, that agencies of the Government with quasi-judicial functions should be, and generally are. independent and are not subjected to executive control; and fifth, that the authority and prestige of the agency over the industry, through suggestions and advice, would be curtailed.

“Mr. Vinson, a member of the committee, in support of the committee’s position stated that the bill was, at least in part, concerned with the protection of the revenue, that all regulation of the liquor industry should issue from one department and that conflicting regulations and rulings would be avoided and the other benefits resulting from a united control would be secured by putting the new act in the Treasury Department (record of hearing on H. R. 8539, pp. 13-20. 22-24). The Secretary of the Treasury was of the opinion that the duties imposed on the new agency were such that it should not be made a part of the Treasury Department (id. Mr. Graves, Assistant to the Secretary of the/ Treasury, pp. 29-31. Mr. Hester of the Treasury Department, pp/ 42-13). At these same hearings Congressman O’Malley, appearing as a witness, said that he favored placing the new agency in the Treasury to get rid of “a lot of red tape and cockeyed regulations”, to get liquor down to a reasonable price, and to enable small units to get into the liquor industry” (id. p. 98).

I’m all for honest debate.  But honest is the key word.  To claim that the type of contamination we’ve seen in spinach and lettuce – the type of contamination that gave rise to the recent Food Safety Modernization Act, is an impetus for the government’s involvement in the regulation of alcoholic beverages and not some ad hoc justification just doesn’t have support.