Beer Bill: Veto Is in Order

California’s beer wholesalers have won their celebrated legislative battle to get a firmer grip on the beer distribution market in California, but Gov. George Deukmejian should put a quick end to the celebrating--whether with champagne or beer--by vetoing this bill. California should have some semblance of economic competition for the taste buds and pocketbooks of the state’s beer lovers.

At present, about 200 beer wholesalers control the sale of about 90% of all beer sold in the state under exclusive franchises from manufacturers. For instance, if Joe’s Beer Co. has the Budweiser franchise for Irwindale, Joe is the sole authorized Irwindale distributor for Budweiser. That is not a bad deal, but the California Beer and Wine Wholesalers Assn. wants to make it even better by having the system written into state law.

The legislation would in effect bar brewers from selling directly to large retail outlets like supermarkets. Both sides in this fierce legislative battle have claimed to be working in the interest of the consumer. Wholesalers claim that the stability of the market created by the law would allow them to maintain low prices, and California currently enjoys some of the nation’s best prices for beer. Consumer groups respond that the state-sanctioned monopolies would reduce competition and give the wholesalers the ability to fix prices at any level they want.

The controversy now is in the governor’s hands. The state Assembly voted 43 to 22 on Thursday for the final passage of the bill sponsored by Assemblyman Jim Costa (D-Fresno), who said that it tries to deal with a turf war between wholesalers and retailers. The legislative battle has been paralleled by a bidding war between the two sides in campaign contributions to key lawmakers.

Deukmejian’s office said that he will study the measure carefully before deciding how to act. The governor once vetoed a somewhat similar measure dealing with the wholesaling of wine, but an aide said that this should not necessarily be considered a precedent or a signal as to how he will move on the beer bill.

The trend in California over the past 25 years has been toward an open market in the sale of alcoholic beverages. The evidence is that the consumer indeed has benefited. The proper arena for wholesalers to win their battle is in the marketplace, not in the Legislature. A veto is in order.