Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Thursday, May 26, 2005

Barriers to Trade:
No Wine from India in Ontario

I had never even heard of wine from India until I read this piece at A Canadian Econoview. And I still have not tasted it. I probably never will, unless I get a chance to try it the next time I visit Alberta, because it is not allowed at the Liquor Control Board of Ontario [LCBO]. Here is Brian's concluding paragraph:

Is there really any good reason (as opposed to a bureaucratic reason or sheer inertia) the LCBO shouldn't bring some of Mr. Grover's wines into Ontario and let Ontario wine drinkers try it for themselves? If it's as bad as the LCBO says it is, most Ontarions will twig to the fact pretty quickly. As for the taxpayer bearing the burden of inefficiency (an odd way to look at it - surely it would be the burden of bad buying decisions) the only reason that's the case is because the LCBO is a state-owned monopoly. The solution to that problem's simple: deregulate the industry and let importers take their chances. That way the burden of bad buying decision falls on the private individuals who take a risk on trying to establish a market. People customarily referred to as entrepreneurs. It'll be interesting to see how Mr. Grover does in free-market Alberta.
There is a very good reason that the LCBO is making it difficult for Mr. Grover to import wine from India -- protection of Ontario wine producers. That is the same reason it is so hard for us to get much choice of American wines in Ontario, too. One of the apparent goals of the LCBO is to encourage/support Ontario producers, and they do so by limiting competition.
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