null

Prohibition in the United States and its Consequences

Drinking wine from a box is one thing, but have you ever heard of a wine brick? During Prohibition, which was enacted in 1920, California vineyards used wine bricks to work around federal laws and sell alcoholic beverages. Wineries would ship tightly packed bricks of grapes, concocted so that consumers could just add water and make their own wine at home—which was legal to do.

The only problem was that varieties like Pinot Noir and Cabernet Sauvignon were too fragile to survive being put into bricks and shipped across the country. So many farmers dug out their old vines and replanted their fields with the teinturier grape varietal Alicante Bouschet, which was much hardier. The result was a lot of really terrible wine, and even worse, a change in American perception of—and tastes for—wine.

These bricks were one of the many unfortunate and unintended consequences of Prohibition. Another was the devastation of tax revenues on the local and national level. At that time, in the United States, the concept of an income tax was still new, and state and federal governments derived most of their money from taxing liquor. It was estimated that the State of New York received 75 percent of its revenue from alcohol taxes. For the federal government, these taxes were second only to customs duties as the largest source of revenue. When all of this money disappeared from government coffers—an effect that was further exacerbated by the cost of actually enforcing the law—income taxes went sky high.

After Prohibition was finally repealed in 1933, the damage was done. Income taxes remained high, and individual states were handed the right to control alcohol production and consumption within their borders, which they did heavily. Most created a three-tiered system, distinctly separating producers, distributors, and retailers. This arrangement gave states full control over the alcoholic beverage industry. The problem was that each state crafted its laws somewhat differently—usually as the result of heavy lobbying from different powerful families or corporations in different regions, intended to tilt the playing field in their favor.