Wednesday, February 7, 2018

Don't Let Them Fool You

The PLCB just put out their latest Retail Year In Review, patting themselves on the back — again — about how great the State Stores are doing! Yahoo! It's all here! Just don't look too closely at the numbers!

Because if you do look closely, peek under the gloss and sparkles, you can see just how crappy a job they are doing. Let's start with the record sales. Let's see: police controlled monopoly, citizens can't go anywhere else, rising prices, increased population... It would probably take a real marketing genius to have record sales under those conditions. And take a look at those record sales in the hottest market category - American Whiskey: the PLCB's growth there is less than the national average increase in sales. Not just a little less, it is about 30% less. Imagine how much more in taxes would be collected if Pennsylvania was able to match the strongest national trend in booze sales for just that one category.

The PLCB is over $1 BILLION in debt
Of course, our old friend Jack Daniel's isn't forgotten; after years of us saying that it isn't a bourbon, the PLCB in their normal bout of incompetency gets it half right. On page 32, table 19 of the report there is Jack Daniel's Gentleman Jack sitting in the number 10 spot for "bourbon." At least they didn't have JD #7 listed 3 times like they did last year (page 30, Table 19). It is hard to say if they left it out because it isn't bourbon or they just screwed the table up.

To prove they are keeping up with the "modern lifestyle," a whole one tenth of one percent (0.11%) of sales came from the Internet, which is really pathetic in this day and age for a retail company. Pathetic is the key word when talking about the PLCB's technology track record. Can you say "wine kiosk"?

Then there is the problem of saying things to make yourself look good, even when the numbers that you provide don't always match up with reality.  For most of us this is called lying, for the PLCB it's called "how we do business." Let's look at those "increased sales".  First we have the sales for 2015-2016 from the Retail Year In Review.  On page 4 it lists total sales of $2,303,405,801. On page 5 it lists sales by month and transaction; it doesn't total them up, but have no fear, I did it for you.

Notice that the total is about $23.5 million different. The PLCB doesn't say why, and apparently we don't deserve an explanation.

The next table is for the year 2016-17. Again, the monthly sales in total don't match the total listed by the PLCB on page 4 of the current Retail Year In Review ($2,443,725,791). Only this time, it is $76.5 million that has disappeared. Remember, as the owners of this mess this is our money, and I'd like to know where that $76.5 million is.


Here you'll see that the number of transactions was fairly flat, increasing only by 0.91%, while sales dollars went up 3.8%. What this tells us is that the citizens bought 1% more often, but it cost them 3.8% more each time, well above the inflation rate of 2.1%

Retail alcohol is one of the few major sales items where the individual product is elastic (in economic terms, this means that a small change in price can mean a large change in sales), because there are so many suitable substitutes. If your favorite vodka goes up, you can easily find another at a price you are more comfortable paying. The industry as a whole, though, is inelastic, meaning that people are going to pay for some form of the product no matter what the price changes to. The PLCB knows this (probably because they hired somebody to explain it to them), so they will increase prices and not have it affect overall sales that much, if at all. They are doing that right now, through the old variable pricing trick they foisted upon the public (and the gullible Legislature).

So now that you have real numbers in front of you, you have to ask where the PLCB came up with an "average statewide increase of 6.10%", when the numbers they give us don't match? What numbers are we supposed to believe Table 4 or Table 5? And why should be believe anything the PLCB tells us, given their history of anti-consumer behavior, their predisposition to screwing us? Why aren't they capable of making the sales numbers match on their own damn report? As far as that goes, why, in this age of almost instant information access does it take them six months to put this report out? Find another $2 billion business that takes that long...go ahead, I'll wait.

Face it, the PLCB does NOTHING for the citizens except cost them more in the long run. Remember: they are a BILLION dollars in debt and it isn't getting any smaller.

Privatize.

Monday, January 22, 2018

A closer look at the PLCB Cash Cow

The PLCB and the UFCW (the State Store clerks' union) have always fed the public (and the Legislature) a big lie about the PLCB Cash Cow. They make it sound like their bulging bovine is comprised of nothing but filet mignon, and shits millions into the General Fund.
What they want you to think
However, the Federal Government doesn't think so and with new accounting rules in effect, the real value of the PLCB is more starkly in focus. Remember a couple years ago, when pension debt was required to be included in the annual report, showing that the incompetents in Harrisburg were really $240 million in debt? Now other benefits besides just pensions have to be taken into account, and it turns out that the PLCB is OVER A BILLION BUCKS IN DEBT. with total liabilities of over $1.7 billion! Yup, billion.  With a 'B.'*

Let me say that again. The agency that has been stealing from the public and short-changing the clerks the benefits it promised (which it could never afford to begin with) for over 80 years, while telling us all that it makes money...is over A BILLION DOLLARS in debt.

Don't believe me?  Why not ask the PLCB themselves? Here's the minutes from their December 6th meeting; take a look at page 9.
The reality of 80 years of lies.
What does it mean? It means that even with stealing more from you with "flexible pricing," even after screwing us with rising prices just because they want to, even after cheating us out of the discounts given by the suppliers, even after purposely working against PA businesses with imported house brands...they still need more...a lot more. The lying political hack they call a Chairman could barely keep a straight face when he told this whopper: "And, as we’ve said all along, prices will increase for some items, when the supplier and PLCB agree that the market can bear the increase." 

Looking at page 10 of the minutes you can see that for October they claim a profit (Change in net position) of $8,623,941. That means that if they didn't do anything else besides pay down debt, it would take ten years just to break even for the debt due today. Of course, they would be accruing more debt, new debt during those same 10 years. This is a Ponzi scheme worthy of Bernie Madoff. No wonder they worked so hard trying to get the Governor's borrowing plan into place. It would further obligate the citizens into paying off their debts and for the next 20 years keep the people who care about limited government and fair treatment for the citizenry at bay.

What does it take to be rid of them? How incompetent do they have to be? How anti-consumer will they get trying to pay off what they owe? You know where this money has to come from, don't you? I got a hint: the wallet of someone you know really, really well.

Can we afford to keep the PLCB's cash cow? Are state stores worth it? 3,500 clerks should not hold hostage a state of 12 million people. Privatize.


(*) Now $1.8 Billion in liabilities for January)

Tuesday, December 5, 2017

The Gift That Keeps On Taking

Giving and getting booze as a gift in Pennsylvania is no easy feat.

Given the police-enforced monopoly that is Pennsylvania's wine and spirits marketplace, you might expect that there are laws to fence off all possible ways around those restrictions; for instance, no "gifts" of booze (that are then surreptitiously reciprocated with cash). But if you thought there was a one bottle or a case exception for honest gifts, you would be wrong. You still have to give the state its cut, even on a gift.

And you know who is responsible to pay the fees, taxes, and unknown markup on that bottle? Not the person giving, but the person receiving. A good friend of the blog recently quizzed the PLCB about all the steps necessary to give some hard to find, not available in PA no way no how, honest to goodness collectible booze to a PA resident. Here's what they learned.

As a rule it is generally unlawful for anyone, other than the PLCB or the holder of an importer’s license or a direct wine shipper license (or a sacramental wine license), to "import" any liquor (including wine) into Pennsylvania. 47 P.S. §§ 4-491(8), (11).

No problem, you think, I'm not bringing it in, someone else did and gave it to me. Ah, but it is also generally unlawful for anyone, other than a manufacturer, the PLCB, the holder of a sacramental wine license, or the holder of an importer license, to possess or transport any liquor or alcohol within the Commonwealth that was not lawfully acquired from the PLCB, a PLCB-licensed limited winery, a PLCB-licensed distillery, a PLCB-licensed limited distillery, a PLCB-licensed direct wine shipper, or a PLCB-licensed retailer holding a wine expanded permit. 47 P.S. §§ 4-415, 4-488, 4-491(2), 5-505.2, 5-505.4.

OK, so how do you LEGALLY get that bottle into the state so you can give it to somebody? Short answer: you can't. In a moment of supreme bureaucratic idiocy it was decided that the recipient has to do all the work. Why?  All I can come up with is that the PLCB can't screw an out of state person like they can screw a PA resident.


So if you go ahead and just illegally give that bottle to somebody in PA? Here's what they have to do, if they want to legally keep it and not just flush it down the toilet and deny all knowledge when the BLCE comes busting in.

BLCE!! HAND OVER THE GRAPPA! NOW!!
First, they have to know exactly what you are giving them...ahead of time (which kinda ruins any surprise if that was your intent). Then they have to fill out an application for importation and an application for the payment of tax on the liquor to be filed with the PLCB’s Bureau of Product Selection by the intended gift recipient (i.e., the person importing the liquor). (40 Pa. Code§ 9.51.) No word on how long it takes to get that information (because nobody in their right mind has ever done it).

Once it has been decided by the Bureau of Product Selection what fees and markup and service charge (remember that this is a SERVICE to allow you to bypass the incompetents in Harrisburg) to apply, you then have to contact the Department Of  Revenue, because the state taxes on the liquor would be levied by the Department of Revenue, and they have to determine the amount of taxes that would be owed on the gift, if any. If they're confused by this, tell them the PLCB sent you.

(By this time, you may be wondering: if Revenue is collecting the taxes, and the BLCE is doing the enforcement...if we got rid of the State Stores, what would we need the PLCB for? Good question.)

If you want to try and figure out approximately what the fees are yourself, before committing to this mindstorm of bureaucracy - be prepared to wait. It took two weeks to drag the info out of the Bureau of Product selection. They finally sent a reference to 40 Pa. Code § 9.52. Why did that take fourteen days? Probably because nobody in organizational memory had ever been asked the question before. You know...because an ordinary citizen would just give their friend the bottle of booze and be done with it. 

Once that is done, hopefully before you are too old to enjoy your gift, you have to go back to the PLCB’s Bureau of Product Selection and turn in your application for importation and an application for the payment of tax on the liquor (which Revenue gave you). Now even though you have paid the tax, the fees, the markup, and the service charge, the Board can still say no because they have monopoly power and there is no legal recourse for you to appeal to if they are feeling a little bitchy that day.

Think you are done? Of course not! Your friend can't just drive across the border with with his gift. Horrors! The world will come to an end. No, the State has to maintain CONTROL by having you hire a Transporter for Hire Class A or Class C licensee to bring it to your residence. Yeah, really. And by the time this is all over, you'll want to remember to tell your friend to please never bring you another gift.

By the way, if you decide you don't like the gift and want to sell it -- because it is, after all, your legal property -- then just turn it in to any State Store and they will take care of it for you. "But what about the money?" you ask? Don't worry, it won't cost you a penny! Really. You don't get any proceeds from the sale...but your conscience will be clear knowing you didn't break the law. I'm not sure what happens if you sell a bottle when you are out of state but I'd bet the PLCB has some way to screw you if you do that too.
More Pennsylvanians than this buy or drink bootleg booze every day
Suppose this just was too much and the giver decides to say screw it, it is too much trouble for my buddy to go through, I'll just bring him some beer. Guess what? There are NO EXCEPTIONS for beer at all. No jump through the hoops while you kiss our ass paperwork hurdles, no forms to fill out, no taxes to pay. It is illegal, period, to bring beer into the state.

Don't believe me? Here is what the PLCB has to say about it: "The importation of malt or brewed beverages is governed by different sections of the Liquor Code, 47 P.S. §§ 4-431, 4-492(8), and no exception currently exists that would allow for the importation of gift malt or brewed beverages outside the otherwise authorized channels of distribution."

So I urge you to put on that mask, and join the tens of thousands of Pennsylvanians who say, 'Up Yours, PLCB!' every day, and bring that cheaper beer, nicer wine, and better liquor in over the border in as much quantity as youu need as often as you want. Be an outlaw, be a Hero for Freedom of Choice. Perhaps I'll see you on the border.

Privatize.

Smuggler's Blues from Michael Dewey on Vimeo.

Thursday, October 19, 2017

PLCB buying power is a joke.

Well, it it that time of year again when the Buffalo Trace Antique Collection (BTAC) goes up for lottery. So how does PA fare as one of the largest buyers in the country? Worse than most control states and certainly worst than Total Wine.  Need proof?

Last year PA got an allotment of 165 bottles of George T Stagg, the most popular of bourbons in the BTAC, out of a release of 9.120 This year the total bottling of GTS is almost 29,000 more bottles and PA is getting.....you guessed it, 165 again. Maybe that is just an outlier you say. OK, let's looks at Thomas Handy Rye. PA got 408 bottles for the entire state out of a run of 11,944. This year they are getting 407 from a run of  14,021.
2017 BTAC, although the PLCB says it it 2016, but they are idiots.

Want to try another? Sazerac Rye stayed the same too even though production went up and W.L Weller also stayed the same even though production was up 42% over last year. Yeah I've got the numbers for them too if you really need them. 

So even if the allotments were just divided up by states and foreign sales PA got the short end of the stick by A LOT, It is even worse if you looked at it by a population allocation and we owe it all to the glorious leaders at the PLCB. They should hire some North Koreans, at least they have experience in allocating resources while screwing the public.


Now if you are like me you're thinking that this is what they get for trying to play hardball over purchase prices. We, the citizens and consumers, not only have to pay above list price to the ass-backward PLCB but their newly increased "buying power" gets us LESS of the products we want. Name another business that works like that? You can't - and if one did exist they wouldn't be in business because their competition would make sure they didn't survive.

So just let me say that you guys are doing a bang up job. The more stupid and incompetent things you keep dreaming up to do means the sooner we can be rid of you for good.

PRIVATIZE.

Monday, September 18, 2017

PLCB Stupid Inventory part 100

After five years of saying and showing the PLCB that they were screwing up the listings for their #1 selling "bourbon" — as Chairman Tim Holden likes to call it — the PLCB has almost managed to get their listings for Jack Daniel's Tennessee Whiskey correct. Although in typical fashion they have managed to get the most expensive hard to get JD wrong.

A bit hard to read but NO Jack Daniel's products are a blended whiskey as defined by the US Government.

The 2016 Laphroaig Cairdeas bottling confused them enough that they don't know what specific type of spirit it is, so they left it blank. Guys, it says "single malt Stotch" right there!
Then there is Jim Beam's Eight Star Blended Whiskey (#504228) which the PLCB thinks is also eight years old for some reason - maybe their lack of product knowledge?  And what about Kinahans Irish Whiskey Blended 10 Year Old  (#559929) which is stuck in with the blended whiskies. Now I know you are going to say that the bottle says "blended whiskey" right on it, but foreign whiskey does not follow same the rules as American blended whiskey. Jameson's and Bushmills are blended whiskey too, unless you get one of the Single Malt versions. It should be under the Irish Whiskey section along with all the other Irish. Again, anybody who had any real knowledge of liquor would know this.

Of course, the PLCB has the normal (for them) inability to read product labels. It is just so much trouble to get things right and hey, you can't go anywhere else so what does it matter.
If you don't like using the FWAGS website never fear they screwed it up on the flat file webpage too, calling this a blended whiskey and getting the proof wrong.

And for the last one today there is Whistle Pig 12 year old Old World Whiskey (#559250) which says "Straight Rye Whiskey" right on the label but that doesn't stop the incompetents in Harrisburg from putting it in the blended whiskey section. Here's a tip for you, "Straight" in whiskey means it is a distinctly different product from blended whiskey in US law. But if you are wandering around making up your own interpretations, I guess it can mean anything you want.

There are only 53 records in the WHISKEY (BLENDED) section and I found 5 that were wrong just by looking without really checking into them all so there may be more. So if we apply that ~ 10% error rate across the PLCB catalog there are over 1,000 wrong entries. Way to run like a business guys!  If we could we'd fire the lot of you for incompetence.

Privatize.

Monday, September 11, 2017

Lies My Liquor Control Board Told Me

A nowhere near complete list of the bullshit the PLCB has fed and is still feeding the public.

1. Prior to Act 39, we couldn't negotiate prices.

There was and is nothing in the liquor code that prevented negotiating prices. In fact, all the Chairman's Selections prices are negotiated and have been since inception. In April of 2016, Elizabeth  Brassell, the Board's director of communications said as much: "You are correct that the Liquor Code does not indicate that prices can’t be negotiated or that the PLCB has any obligation to use manufacturers’ suggested retail prices. In fact, as you suggest, the PLCB’s buying power, as well as its discretion to list and delist products, allows for some price negotiation with vendors." Yet we've been told that this is a new power, granted by Act 39.

2. "And, as we’ve said all along, prices will increase for some items, when the supplier and PLCB agree that the market can bear the increase." Chairman Tim Holden.

And as we've said all along, "flexible pricing" means "higher pricing." Today will see the increase of prices on 422 items; prices that are going up because the PLCB alone wants them to go up.


3. "Because of cooperative and collaborative negotiations, we hope to reduce prices on dozens of items in the near future." Chairman Holden again, on October 28, 2016

Here it is over 10 months later and of the top ten selling spirits and top ten selling wines the only thing that has gone down in price are pints of Nikolai vodka....by 30 cents.  This can only mean one of two things. Either the PLCB failed to get any price decrease on the items they have the most leverage on; or the PLCB kept all the reductions in purchase price they did negotiate and put the screws to us, the consumers. The truth is, we don't know, because the PLCB refuses to release this information. So much for us being the "shareholders" in this state-owned "business."

4. The PLCB and the vendors view pricing information as proprietary. At least that is the reason given for no longer showing purchase and shelf prices on the board meeting minutes and why the PLCB refuses to let consumers know what 422 items are that went up in price.

Yet the PLCB listed pricing information for decades. Act 39 and 166 did not make that same information proprietary nor did they say that the public should no longer have access to that information.

5. Wine Kiosks - "This was not a faulty fiscal decision," PLCB Chairman Aug 17, 2011

Yes it was and so was trying to cover it up.

6. Under oath in front of the House Appropriations Committee in April this year, Board Member Micheal Negra said that the loss of 'the shackles' that had been on the PLCB with regard to product pricing "would deliver better revenues for the commonwealth and better product prices and availability for consumers."

Raising prices on 422 items does not provide better availability or prices for consumers. That's a no-brainer. Higher prices are not better prices. And availability? With under 620 stores in a state this size? Don't even talk about availability.

7. The PLCB operates at no cost to the citizens

We pay for everything with higher prices, less selection, inconvenience, pension debt, few stores, inept management at all levels, nepotism, graft, incompetence, anti-consumer practices and unqualified Boards just to name a few. You might as well try to tell us that the Legislature operates at no cost to the citizens.

8. In 1934 the PLCB said that stores would be located at "convenient places to serve the public."

Wow, that's a whopper that they've never gotten over. From a high of 756 stores, we now have shrunk to 604. To reach the national average -- the average -- the total would have to be 1,800. Having 200% less stores than average is not convenient.

9. We are going to run like a business.

A business is successful when it is run by people with experience in the industry, innovates, provides goods at a better price than it's competitors. Provides better service or other services than its competitors do and is convenient for the consumer. The PLCB does none of these well or at all.

"The PLCB is a cash cow!"
10. The PLCB is a cash cow.

The PLCB is $240 million in debt, had negative assets for three of the last seven fiscal years, and by their own admission saved $110 million every year for the past 4 years (through The Wonder Of Bailment!) but has nothing to show for it, limits jobs and job creation due to monopoly practices, spends more on advertising than education, and still only contributes about 0.3 percent of the total state budget.




Tell me again why we need the PLCB? We don't and never have, they do nothing for the state and only exist as a poorly run jobs program. Privatize.

Tuesday, September 5, 2017

So I Went to the Pretty New State Store...

I went to one of the new State Stores. You know the ones, with a new color palette that supposedly offers a warm, welcoming atmosphere for consumers to browse the limited selection. I wandered over to what they call the focal point of the store; a new table, where customers can find staff to answer questions or provide recommendations. Just what I was looking for. 

I waited for somebody to come over to the table.
And waited for somebody to come over to the table.
And waited for somebody to come over to the table.

Did I mention that the table was the focal point of the store?
Looks kinda empty

Ah, a wine person! They wandered over and asked if they could help.
I said, I don't know. I have some questions.
"So what are you looking for?"

Answers.
"I'll do my best, what's the first thing on your list?"

Can you name one thing that has decreased in price in the past few months?
"Sure, pints of Nikolai vodka. We have a guy that comes in everyday, well, actually we have a few,  and is so pleased that happened.  Probably our happiest customer."

Anything go up that you noticed?
"A few here and there but when the wave of 400+ hits next month I'm sure I'll see a bunch of them"

Since this store was remodeled in the same location, did any increase in products on the shelf come with the remodel?
"Oh no, with the wider aisles, this table stuck in the middle and the plants and all there are less things in the store now then there was before."
Style over substance eh?
"I can't say."
So how long were you closed for the remodel?
"About 3 months."
Doesn't that seem like a long time to be closed? Didn't the Dollar Store close for like 16 days when they remodeled?
"The Dollar Store isn't run by the PLCB."

So is this 'modernization' thing working out, or should the Legislature have gone for more privatization?
"We aren't allowed to talk about privatization"
You aren't allowed to have an opinion?
"We can have an opinion, we just aren't allowed to talk about it."
So, the powers that be in Harrisburg don't have enough faith in you workers to offer a reasonable explanation why State Stores should still exist.
"Could be but I can't talk about it."

Can I ask if you belong to the union or just pay fair share?
"I just pay fair share, most of the people in this store just pay fair share. We have too, not like there is a choice."
So how long have you been here?
"I started as a Seasonal 6 years ago, worked part time while I was in school."
Do you think of this as a career after all that time?
"No way, I'm going to an online school for my Masters. Once I have that and a job lined up where I don't have to wear an apron, I'll let somebody else take this spot."
Maybe then you can talk to me about privatization.
"Yeah, maybe then, ha ha."
I can't talk about Privatization, the PLCB doesn't trust me.

What do you say when people tell you they bought ...whatever for less in Maryland, Delaware, New Jersey, Florida or wherever?
"I'm sure it is true sometimes but those chain stores or Mom & Pops don't have to have a store in Nowheresville, PA like we do. We have to support that somehow"
Why? Don't you think a grocery store would carry the basics if they could?
"You're talking about privatization again, so I can't comment."

The conversation above is semi-fictional. It didn't happen with just one clerk, but every question and answer did happen with multiple clerks over the past six months. I wish I could get managers to answer as truthfully as some of their workers, but they drink the Kool-Aid every day, and won't stand for it.