[bmelton]

Of note, since I was curious as to the answer myself and just found out, there are still 'gangs' (though less the urban variety we're used to seeing) based around moonshining.

That prompted me to ask "why is moonshining illegal", and the best (wrong) answer I could come up with was for production and delivery to dry counties.

Turns out, it's just a matter of taxation. Moonshiners are welcome to go legit, but they then have to pay $2.14 for each 750ml bottle they make, which cuts into profitability.

As they likely don't have reputations and/or massive marketing budgets, they still and distribute illegally, which turns it into a pure profit + overhead scenario.

[DanBC]

There's still a small safety element. Sometime moonshiners produce toxic alcohol, or they contaminate their product with things that are toxic.

I agree that the main element is taxation.

Very many cigarettes sold in England are smuggled in from EU because of tax. But now people are counterfeiting so some cigs are both smuggled and fake - the quality of some of the smuggled product is alarmingly poor. (But it's tricky to get any sensible information about this because the only people releasing information are the customs / police who want to make it seem as scary as they can.)

[jakeonthemove]

And the cigarettes sold in EU are smuggled from Ukraine :-D - at least they're the real deal, even though they're like 5 times cheaper there...

[MattRogish]

That's an interesting point that I've never considered (or heard mentioned in the legalize argument). I'm for legalization + taxation of all drugs but will we still see significant folks producing and selling illegally as a tax dodge? May legalization merely get drugs into more hands but still maintain significant illegal production? If so, a lot of the supposed benefits of legalization dry up.

[doktrin]

The market for moonshine is niche at best :

"The number of jurisdictions which ban the sale of alcoholic beverages is steadily decreasing which means that many of the former consumers of moonshine are much nearer to a legal alcohol sales outlet than was formerly the case. Moonshine-like distilled beverages with names like Collier and McKeel White Dog,[27] Everclear, Virginia Lightning, Georgia Moon Corn Whiskey, Ole Smoky Tennessee Moonshine,[28] Platte Valley Corn Whiskey Cat Daddy and Junior Johnson's Midnight Moon are produced commercially and sold in liquor stores, typically packaged in a clay jug or glass Mason jar. As a result of these changes and aggressive law enforcement, moonshine production is far less widespread than it was formerly." [1]

[1]http://en.wikipedia.org/wiki/Moonshine_by_country

[dbuxton]

Yes, here in the UK cigarettes are legal but smuggled cigarettes are a massive (£multi-billion) business because taxes are so high.

Obviously there is a point at which taxation is virtually equivalent to prohibition (1,000,000%?) so the aim of a good tax in this arena is to (1) discourage consumption (2) provide some revenue to offset against social costs of the activity (healthcare costs of smokers, for example) while (3) not being so outrageous as to push the activity underground altogether.

[Androsynth]

The ratio of moonshine to legit alcohol sold is tiny though.

[base698]

It depends on what the markup is. You can't have taxes that equal current costs. If that was the case the market would largely stay the same.