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We don't need no stinkin' liquor license reforms

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You can also tell me the sky is red too. But sometimes words have definitions. And artificially created scarcity isn't capitalism even if that scarcity can be profited from.


Its nothing more than a direct transfer to permit holders from consumers.


That doesn't mean I have a problem with people who licenses profiting from their sale, just that there is no intrinsic value to the licenses without stupid regulation created scarcity and there is no inalienable right to that value.

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I'd agree with both of you.


The taxi medallion or liquor license is a sometimes scarce artificial resource, made scarce by government action. In some place, like Ridgewood, a liquor license will cost nearly a million dollars. Three stops down the train line, a license costs well under a hundred thousand dollars. Passaic, Garfield and Wallington have boxes of licenses, just pick one up.


Lin Shiang is intriguing because they seized the arbitrage and picked up a cheap license in an undesirable town. And offered sufficient quality that people would go to Wallington. Bar Cara (from the Fascino people) and Orange Squirrel did the same thing, going to Bloomfield instead of adjacent Montclair. The demand for licenses was low, supply was high.


Cheesecake Factory HAD to be in the Short Hills Mall, where there were already three licenses. So they bought a license from a holder three miles away for two million dollars.


Montclair demonstrates another aspect of the supply and demand, as three liquor licenses (out of just 12 in the whole town) are being hold off the market. One will probably go to the new Centro Verde real estate development, as the hotel needs the license, conveniently held by a partner.

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  • 9 months later...

A&P recently filed for bankruptcy, and offered its Pathmark, A&P, etc store locations for sale. Here in NJ, ACME Markets bought several stores, and thought they were buying the package store liquor licenses. Maybe they did, maybe they didn't. Joan Verdon has an article in the Bergen Record on the matter.


In NJ, a corporate owner or individual owning 10% of a license is limited to just two licenses. That's intended to prevent huge chains which might use superior bargaining power to bring down prices, and otherwise reduce the profitability of small stores. Through a quirk in the law, A&P is able to hold the 21 licenses which it held in 1962.

The state, the package store owners (likely to be opposed), the grocery store owners (likely to favor a broadening of the rules) and the federal bankruptcy court are likely to be involved. Some of the licenses are in extremely valuable places like Allendale.


My bet is the licenses were terminated in the bankruptcy, and the new owner(s) need to be qualified under the town laws. We'll see how that plays out



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