I recently got engaged, so I’ve been getting a crash course in the exciting world of wedding planning.
One of the things I’ve been doing is shopping around for caterers. Ideally I would like to pay a single company to supply both the food and the alcohol.
Unfortunately, this is not something that most caterers can do in Pennsylvania. This very lucrative privilege is available to just a few companies.
Here is a sales pitch from one such company:
Sagra Bistro/Catering is now one of the very few companies licensed to provide alcohol beverage packages for our off-premises catered events. No more shopping and hauling alcohol or worrying if you have purchased enough. Leave the worry to us!
Up until this summer, people hosting a catered event had to buy and transport their own alcoholic beverages, even if the caterer would be the one serving them.
But back in June, Republicans in Harrisburg changed the law to allow bars, restaurants and hotels who already have restaurant liquor licenses and provide catering services to apply for an off-premises catering permit, which would allow them to add beer, wine and spirits to their menus.
These changes make things a little more convenient for the consumer, but they’re actually a really rotten deal for smaller start-ups trying to get into the catering business.
The very same anti-competitive laws that create major barriers to entry in the bar and restaurant market will now infect the market for catering.
Even though the old law was stupid, at least it created a level playing field. Whether somebody chose to go with a restaurant or an independent caterer, they’d still have to buy the booze and transport it themselves.
Now, independent caterers are at a competitive disadvantage.
If I choose a restaurant to cater my wedding, I can get a package deal on food and alcohol. A restaurant might also be able to offer me a deal on a bulk purchase that I couldn’t get from a beer distributor or liquor store. Those are real advantages of convenience and price that an independent caterer can’t match now because of the new law.
The solution, of course, is not to go back to making event hosts buy and transport booze, but to let everyone sell it.
There’s no public safety argument that passes the laugh test here. An open bar is an open bar, and people who want to drink too much are going to do so whether the host buys the booze from a restaurant or a standalone caterer. This is a straightforward giveaway to incumbent liquor license owners.
While there’s not much evidence that regulations are an important factor in the bad economy, these kinds of anti-competitive laws matter at the margins.
It seems like more people are starting home-based, amateur catering companies, and I think that’s great. That’s a trend we want to encourage. Somebody who has cooking skills, mixology skills or party planning skills should be able to trade those services for money without much government interference. And if they can do it with lower overhead than a traditional restaurant, consumers will benefit from better value and more choices.
If the state creates unnecessary overhead costs like liquor licensing, or regulating home catering businesses as restaurants, that means fewer people can work as caterers, which in turn means higher prices and fewer choices.
Common sense regulations, like requiring caterers to pass a food safety course, are reasonable and appropriate, but on balance state lawmakers should be trying to make it easier, not harder, for start-ups to compete with established incumbents.