Monday, August 7, 2017

"Given our need inside this building..."

Pennsylvania Liquor Control Board member Mike Negra may have inadvertently told the truth (he'll probably be fined for that). Quoted in a story about the PLCB's recently announced price hikes that ran in several state newspapers, Negra let it slip that the PLCB's main mission is the survival of the PLCB, its jobs, stores, and cushy bureaucratic positions. How else are you supposed to interpret this quote?
"Given our need inside this building and throughout our agency due to rising costs of employee benefits and so forth, a lot of that is out of our hands, we felt it was something we needed to do," said board member Mike Negra. "That's what is behind it."
Any PLCB bureaucrat
You see that, right? "Given our need inside this building..." None of the usual window dressing and self-sacrificing bullshit about how the PLCB does so much for the state. Nothing about the General Fund, nothing about the state's financial crisis, nothing about the State Police, nothing about actual alcoholism prevention (what about the children???), and certainly nothing about you, you poor shlub. No, the prices are going up because the bureaucracy needs to fund their ever-increasing operating costs. 

We told you, over and over, that "flexible pricing" would mean "higher pricing." We take no joy in being right, we just wish someone would have listened.

Now can you finally call your rep and tell them it's time to privatize this mess? All of it?


Friday, July 28, 2017

Big PLCB Price Hike May Be Coming!

The PLCB is playing hardball with their suppliers, and it looks like part of the process is threats in the media. Check this out from a recent story at KDKA's CBS Pittsburgh site titled "Prices Of Best-Selling Wines & Spirits To Rise."
The PLCB’s Elizabeth Brassell says the suppliers have been told the price for their product is going to go up on the shelf, “unless our suppliers of those products offer us lower acquisition cost to avoid the retail price increases.”
Brassell says the price increases affect “the best-selling 150 brands of spirits and best-selling 150 brands of wine.” In other words, probably your favorites.
You know what we have to say about that, right? Welcome to Flexible Pricing...we told you so! You know why it's going to affect the 150 best sellers? Because those are the only PLCB products covered by Flexible Pricing! Everything else is still under the mandated markup. 

Here's what the PLCB thinks is going to happen. The PLCB is going to hammer the producers in negotiations! They'll balk at lowering prices, because they know the PLCB isn't going to lower the price on the shelf (because they promised to make a LOT off of this), the PLCB will make this childish "don't make us raise prices!" bid in the press, figuring the producers will lower prices, and then they can say "look, your prices stayed the same, we are HEROES!!" while sucking off all the difference to cover their spiraling operating costs and hold off privatization for another legislative cycle...and the producers will call their bluff, and give 'em nothing.

And the PLCB will just have to raise prices and look like the inexperienced amateurs they are, we'll get screwed, border bleed will explode, and maybe, maybe we'll finally tell our representatives to get rid of this moldy old piece of Prohibitionist crap.
The PLCB Act .39 Special, only one made.
And here's the beauty of it all. If I were the producers... I'd be saying "Screw them. Jack the prices, blame it on them, and maybe Pennsylvania will finally wake up and get rid of these idiots. This is our chance!" Run the long game, booze folks, run the long game, and help us dump these rubes.

Because you know what I'm going to do when the prices go up at the end of August? Hop in the car and go buy booze in Delaware. Why not come along? Let's dump these rubes!

Great New Profit-maker for the PLCB!

Great news! As reported here on Philly.com, and in more detail here from the Justice Department's own website, four companies have been ordered to pay a total of $9 million in fines for their role in the unethical practices of three PLCB officials: P.J. "PJ" Stapleton, Joe "Da CEO" Conti, and James "Fall Guy" Short. It took over four years, but they're paying, and even when you're selling booze to a monopoly that doesn't care about its customers, that ain't chump change.

We were glad to see this, since we fully support telling the truth and stating facts, even if they don't necessarily make the PLCB look bad. That's not our main mission: our main mission is proving that the current system is outdated, not good for customers, and yes, naturally prone to corruption and abuses like this. We were also glad to see that our friend (no, he doesn't know it, but he is, just like Joe "Da CEO" Conti was) James "Fall Guy" Short still hasn't been sentenced almost two years after his conviction on fraud charges. Hmmmm...wonder why that is? Bet a lot of current and former PLCB employees are wondering too.

Dat's a right: Malocchio!
Anyway, the Philly.com comments gang — usually a heap of steaming crap; angry steaming crap — managed to come up with a great idea related to this! Check this out from a genius calling themselves Malocchio: "Maybe this can be a new revenue generator for them... entrap their vendors into giving gifts, then assess confiscatory fines against them... instant profit!"

Brilliant. In fact, too smart for the PLCB. It would all fall apart shortly after the gifts were received...and the employees spent them and asked for more. Hey guys! Remember the "entrapment" part? The trap's gotta spring! Guys? Guys?

End the corruption. Privatize now. Not after more "studies," not after more "hearings," not with all the states where privatization works to look at. 

PRIVATIZE NOW. In fact, right now would be a GREAT time: swap the Democrats a fracking tax for full and immediate privatization. Get what we want, balance the budget, and chances are good no one would really even notice the frack tax. Let's do this, PA Legislature, the citizens are waiting.

Thursday, July 20, 2017

Pay no attention to the man behind the flexible pricing...

Back in October of last year, PLCB Chairman Tim Holden (a political appointee, with no major business experience)  put out this piece of propaganda, trying to fool us into believing that the PLCB's new "Flexible Pricing" was good for them. (We've been telling you for years it's a bad deal for consumers, but the Legislature handed it to the PLCB.)

Holden gets off to a bad start by using an example of Pennsylvania's "top selling Bourbon," Jack Daniel's. It isn't Pennsylvania's top selling Bourbon...it's Tennessee Whiskey, says so right on the label. A small strike, but the kind of product ignorance that's typical at the PLCB.

But it's what he has to say about Jack that's interesting. "In February 2016, Virginia’s price per bottle from the supplier of this product was $12.14, while Pennsylvania’s was $14.46. The retail shelf price on June 1 in both states was the same: $24.99." This just shows that the PLCB was too incompetent or lazy to negotiate better pricing for 82 years, and despite what they might claim about their new flexible pricing powers, there was nothing in the liquor code that prevented them from doing deals on pricing.

Now he gets to the flexible pricing shim-sham. "If Pennsylvania had been able to obtain Virginia’s lower price – $2.32 less per bottle – we would have achieved an additional $2.1 million in profit on that one product, based on the volume of sales in Pennsylvania. Or we could have reduced the retail price, or even a combination of the two." (emphasis added...for emphasis)

And here it is, nine months later...and Pennsylvania's #1 selling "Bourbon" hasn't changed price at all. They are keeping every penny of every negotiated price to the top ten selling wine and liquor brands, all but one: Nikolai vodka pints (the alcoholic's favorite), which have gone down 30 cents. Hey, thanks. Really appreciate it, PLCB.

It's all too clear: the PLCB (owned by YOU, they say) is screwing the citizens on a daily basis, over-charging on numerous items, especially their lottery items. A prime example is the 60% average price increase they charged for this year's Van Winkle releases, and the extra $570 they charged for the 3 bottle 'package' and the extra $860 for the 5 bottle 'package' on top of that. Or maybe the extra $100 they charged for the Buffalo Trace Antique Collection? Make no mistake, you as a consumer come in last in the PLCB's quest for survival. The Chairman even admits it "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."

"Charge what the market will bear" is a cornerstone principle of the free market, especially on "luxury items" like booze. You can see it in the beer market, for example, where craft beer prices continue to rise mainly because customers continue to pay them (so far). But those prices are kept in check by the knowledge that another retailer may sell for less and get the sale.

As a police-enforced monopoly, though, the PLCB can raise prices and the market - meaning you and me - has no other choice: we can't go to another retailer (or another state...), we have to bear it. Bet you didn't know that it was fine for a government agency to gouge you. Imagine if the Turnpike Commission had "flexible tolling." When did things change so that the government would treat you fairly and justly IF they made enough money from you?

So how will you know if the PLCB is cheating you?  You won't, because they don't have to tell you their secret pricing decisions. While they don't have any problem outing Virginia, the PLCB no longer lists the price they paid for their products. The official PLCB excuse is:
"Act 39 of 2016, which became effective in August 2016, granted the PLCB authority to negotiate product acquisition costs with suppliers for the most popular wines and spirits carried in Fine Wine & Good Spirits stores. The goal of these negotiations is twofold: to maximize revenue the PLCB generates for the commonwealth and to offer consumers fair and competitive prices. Subsequently, the PLCB removed product cost and retail price information from Board agendas and minutes in the interest of optimizing supplier negotiations. Additionally, now that the PLCB can act more like a traditional retailer with regard to pricing, it is not in our financial interest to give other alcohol retailers advance notice of our prices and sales."
But a traditional retailer has competition, not a police enforced monopoly! I'd like to know what other alcohol retailers are they talking about. Do you really think that Mondavi doesn't know what Gallo is charging, or Buffalo Trace doesn't know what Beam wholesales their bourbon for? If the PLCB knows what Virginia is paying, don't you think the distillers have a pretty good idea of what their competition is doing? I know that competition is a foreign idea to those at the top of the PLCB, but that is what keeps prices down for everything else you buy, not allowing some entity to charge whatever they want and then MAKE you pay for it.

Being the Chairman of the PLCB is the bizarro version of being Harry Truman, without the ethics or personal responsibility. "The buck passes here," is that right, Tim? Nothing is ever their fault no matter how idiotic (wine kiosks), misogynistic (date rape ads), anti-PA  business (Tableleaf et al), anti-consumer (any monopoly is anti-consumer) or just plain stupid (whatever happened to the PLCB Savor magazine, and the drink recipes that need things the PLCB doesn't sell?) Any Chairman claiming any responsibility for any of those things?  Didn't think so, and Mr. Holden is certainly not going to be the first.  

Stop being fooled.  The PLCB does not exist for the benefit of the citizens, it exists for the benefit of the PLCB. Anything to keep the pigs at the trough is what they are for and anything that resembles real business with real competition is what they are against. Starting at the top with the Chairman..

Wednesday, May 10, 2017

PA House Democrats keep up the scare on privatization



As the State Store System trembles from the freshening breeze of competition from the likes of Wegmans and Giant and Giant Eagle (and remember, they're still chained by the cafe rule, and wine only, and the Four-Bottle Folly, and state-regulated pricing), and new salvos of booze freedom launch from an increasingly bold House GOP caucus, the House Democrats are in full spin mode in defense of the archaic PLCB monopoly. They're trying to convince the people of Pennsylvania that it is better to have a government retail monopoly than a free market for booze, a pure case of the mindwarp that is Wolfonomics.

For example, let's comment on a press release they put out on April 24th.

"Liquor sales in PA should be about consumer convenience and small businesses, not big profits for a few huge corporations."

Pennsylvania House Democratic Caucus    April 24, 2017 | 6:01 PM

Republicans in the Pennsylvania House of Representatives are scheduled to move several liquor privatization bills this week. They all have one thing in common: Pennsylvania consumers aren't demanding any of them and the Pennsylvania Senate is unlikely to consider them.

Of course the Senate will consider them, they may not act on them all but the four bills will be consolidated into some package...unless McIlhinney kills them. What party is he affiliated with again? Is he one of your guys?  

Consumers Are Happy With Modernization! Forward!
Consumers are happy with the modernization and convenience changes made last year to Pennsylvania's liquor laws -- there is no widespread public support for comprehensive privatization for privatization's sake. 

After 82 years of nanny state idiocy why wouldn't consumers be happy about changes? But are we satisfied? Since every scientific poll of the past 40+ years shows the public doesn't want the State Store System, probably not! 


Those guys? Only in it for the money!
There are only a few groups pushing to rush forward with more liquor changes so soon after last year's consumer-friendly improvements — the chain grocery stores; big-box retailers and mega-wholesalers that want to corner the market at the expense of consumers and small, family-owned businesses; and the newspaper publishers who want to reap millions of dollars in advertising sales. 
Of course stores (except the State Stores) want to gain customers by providing what they want, where they want it, be it Walmart or a local wine store (which you may have seen in other states). Just what small family-owned liquor stores are there in Pennsylvania that the Democrats are talking about? They don't exist, and unless things change, they won't. Not because of big box stores, but because the Almighty Liquor Code doesn't allow it, and the House Democrats are just fine with that. And they're still banging away at the news media. For years the Democrats and Windy Wendy Young have been saying newspapers only back privatization (and practically every Pennsylvania newspaper does, by the way) because they will reap a small fortune due to alcohol advertising. Just where is that happening? Looking at the papers in New York City: not a one has an eighth of a sheet worth of liquor ads. Even if there were more here in Pennsylvania, it would show that stores are competing with each other for your business, which can only be good for the consumer. 
By pushing expanded alcohol sales, the state risks jeopardizing public safety in many counties and municipalities, reducing revenues for the Pennsylvania budget, and killing thousands of family-sustaining jobs in every community in the state.
Really? Yet the PLCB has been pushing to expand sales for years - why is that good but real growth bad? Of the last two places that fully privatized in the past 25 years, both have lower rates of DUI, underage DUI, DUI fatality, and underage DUI fatality than the Commonwealth currently does. In fact, four of the six border states have better records. One that doesn't is Ohio (also a control state!), the other is Delaware. Maybe it's the PLCB that is jeopardizing public safety by focusing on increasing sales instead of regulating alcohol sales and abuse. The conflict of interest is real!
Jobs? The current system is limiting jobs in favor of the monopoly. Full privatization has tripled jobs in the industry where it has happened. It has increased convenience and consumer satisfaction, because there aren't some unqualified bureaucrats deciding what the entire state is allowed to buy. 
Creating thousands more wine and liquor retailers will saturate the market in many counties and municipalities.
Just to get to the national average Pennsylvania would have to add 2,000 stores. Like any other product there can only be as many stores as the market will bear (and local zoning and ordinances will allow). Imagine local communities deciding what is best for them, not Harrisburg. 
Access to a wide variety of wine and liquor selections in well-lit, clean and safe state stores will be replaced by a limited choice of major-brand items relegated to one or two aisles in chain grocery stores and big-box retailers like Costco and Wal-Mart. 
Why would a grocery store stock the same amount of products as a stand-alone liquor store?  Compare a State Store to a liquor store. Go look at a Total Wine, a BevMo, a Super Buy Rite, a Binny's or any of the real liquor superstores and compare it to a "Premium Collection" State Store. The private stores will have more variety ACTUALLY ON THE SHELF then the PLCB stocks in their entire system. Privatization can bring a wide variety of stores, specialty stores, warehouse size stores, local stores, convenient stores instead of the same one size fits all State Store. 
Wine and liquor in Pennsylvania's state stores are priced competitively. Prices for consumers in states where wine and liquor were recently privatized have gone up, not down.
With the largest border bleed in the country, there are probably a large number of citizens who disagree that the selection, service, and prices are competitive. As far as the ONE state that has fully privatized, one can expect that an additional 27% in fees and taxes that were imposed at the time of privatization may have had an effect on prices. However, prices didn't go up 27% which shows that the free market is much more efficient than a monopoly. Besides, with the knowledge of hindsight we don't have to do things exactly the same — wrong — way. 
Combined markups and taxes in Pennsylvania for wine and liquor are comparable to and, in many cases lower than, those in privatized states.
The first true statement in this entire release, but with variable pricing causing the markup to go up, it may not be true for long. As the 2nd largest retailer of wine and spirits, the real question isn't whether your prices are competitive; it's 'Why aren't they better across the board than MD, DE or NJ?'

The bills being considered this week will substantially increase the number of businesses selling wine and liquor but provide no additional money for alcohol control or law enforcement. There are already too few officers monitoring Pennsylvania's 30,000 licensed establishment. Do we really want to add even more locations to already-saturated markets? 

Most of the additional businesses that would be selling wine and liquor are already licensed by the board and are already checked by the BLCE. While there are 30,000 licenses of various types, only 19,000 are active and the state itself is adding 1,200 to that total. Again PA is below the national average, so the idea that we are "over saturated" is disingenuous at best. 
Many Pennsylvania municipalities are already struggling with the crime and expense caused by nuisance bars. We need to find solutions to those problems before we add even more licensed locations.
As already pointed out, the state is adding more licensed locations. Three of the four current bills are not adding any locations but expanding what can be sold. Maybe if the communities didn't have to wait for the PLCB to act, they could better control what happens in their towns. 
The U.S. Centers for Disease Control and Prevention has determined that liquor privatization leads to increased excessive consumption. Pennsylvania has not examined how vastly expanding access to wine and spirits -- and oversaturating the market in several counties and municipalities -- will impact public health and safety. 
The study mentioned also had consumption increasing by over 40%, which has not happened in any state, and overall the research data has been debunked by Stats.org the premier body for statistical analysis. The CDC report was so bad that Forbes did an article about it. 
Moving toward full privatization of wine and liquor sales in Pennsylvania would replace skilled jobs that provide financial security for thousands of families with a much smaller number of minimum-wage cashier jobs that don't protect public safety, improve customer service, or support families. 

Currently State Stores are never checked for age compliance by the BLCE, but every licensed establishment is. A number of private stores selling beer and wine have 100% carding policy; the State Stores do not. Everybody that serves alcohol in a licensed establishment has to be RAMP certified; State Store clerks do not. 
Being a clerk in a liquor store is not a skilled job, but as already mentioned, employment in the industry tripled the the last places that fully privatized. Not a guarantee it will happen here but a good indicator. Keep screwing around with these "ass-backwards" measures (as Senator McIlhinney pungently put it) that only complicate the mess further, and things probably won't go as well.
This blind leap toward full privatization of wine and liquor sales comes without an examination of the public health and safety impacts, no evaluation of whether Pennsylvania consumers believe full privatization is necessary or desirable in the wake of recent consumer-friendly improvements, and with no accounting of what privatization will cost Pennsylvania workers and taxpayers. 
The citizens have never wanted the State Stores. In poll after poll, privatization or private retail has always won out. After over 40 years of the same result, do you really think the citizens will change their minds? The recent improvements simply show that full privatization is desirable. People want convenience that the PLCB can't provide. They want better pricing that the stores can't give them because they have to buy from the PLCB. They want the selection they see at stores on our borders - stores that stock more than the entire state has on the shelf.
Pennsylvania should be working to benefit and protect consumers and small businesses, not rigging the system to put one of the state's most important and lucrative assets in the pocket of a few huge corporations.
Since there are no small liquor store businesses now it seems that you are already rigging the system against them. Privatization can fix that. Who will get licenses and what type are up to you in the legislature. If you say only stores of 10,000 sq.ft., then guess what...only chains and big box stores will get licenses. If you allow specialty wine or liquor only licenses then you will see entrepreneurs opening that kind of shop or restaurant - something that PA doesn't have now.
The one size fits all thinking of the PLCB can't and shouldn't be applied. 
This isn't 1934 anymore. It's time to move forward, toward a license and regulation model that the majority of states use. Get out of retail and wholesale so the free market can do what it does best. Provide products based on the wants and needs of the consumer, not on what is allowed by the government.

Monday, May 1, 2017

Are Your Prices Variable Enough?

Just how much is the PLCB screwing us with "variable pricing"?

A good question, and one that the PLCB doesn't really want to answer. There is no sunshine at PLCB HQ; their mission is to hide as much as possible, keeping as much information away from the citizens as they can. And why? It's not like they have any competition to worry about, no business secrets to keep: no one else is in their business, they've made sure of that. They do it for one reason: to keep the owners — that's you, and I, and the Legislature — ignorant of what they're really doing; of how they're desperately shuffling prices and margins around to try to look "profitable."

Would the wine kiosks have passed if the citizens, if the press, knew about them, knew that the PLCB had been advised against implementing them...by their own people? Would Joe "Da CEO" Conti been brought back after having been found to have committed ethics violations if the citizens knew, and could do something about it?*(Correction: please see below.)  Maybe anti-competitive branding and placement wouldn't have taken place with citizen involvement. But that all did happen, mainly because the PLCB kept it all hidden away and secret, to the point of having records destroyed, to the point of appearing to have had secretive off-book meetings to make decisions that are supposed to be discussed in public.

Now they don't want you to know how much of a shaft you are getting on variable pricing, the one thing they wanted more than anything else from "modernization." Remember, the PLCB said that they couldn't negotiate prices for 82 years, even though there was nothing in the Almighty Liquor Code that prevented it, and then they said that they did negotiate on some things, but not most. ACT 39 changed that, and supposedly allowed the PLCB to do something they could have been doing all along...only now the game is rigged to benefit the PLCB and not the consumer. That sounds fair.

In the PLCB meeting minutes, you used to be able to see what new products were going to show up, and the cost for those products. Not anymore. The PLCB doesn't want you to know what they are paying and what they are going to charge,  because it will raise questions about why the consumer isn't seeing benefit from "variable pricing." They don't want you to know that they are making an extra $1.16 for every bottle of Jack Daniel's sold while you see no change** on the shelf.

Now, a real retailer wouldn't tell you this either. But the PLCB isn't a real business; they have a police-enforced monopoly to ensure their market share! A real business doesn't tell you this stuff, but their competition keeps them honest, and you can be sure that they're passing along savings to you; if they don't the competition will.

But the State Store System has no reason to benefit the consumer by lowering prices in order to increase market share or maintain their customer base. They don't have to worry about that, and there's nothing in the Almighty Liquor Code that says they do. Remember the founding principle of the PLCB, as stated by Governor Gifford Pinchot himself: “to discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.

So what does the PLCB tell us about the effects of variable pricing? The Chairman said that they will not raise prices across the board, but with having to dip into reserves to pay more into the general fund, and trying to prevent privatization by making it look like they contribute more than a piddling amount to the state (not including the taxes, which would still be collected in a private system!), and having to pay off $260 million in pension debt...what do you think they are going to do? Keep their sinking ship afloat in any way they can, or benefit the consumer?

Last year the PLCB charged an average of 45.36% above cost for every product sold.  For the first eight months of this year it has risen to 45.46%, and I guarantee that will continue to climb as time goes on. If you remember, the Democrat's modernization plans said that the PLCB will make an extra $75-100 million because of this alone. That would mean they'll have to raise the charge above cost to over 60% — such a deal!

The choice comes down to this. Do we want to continue to have limited selection, limited convenience, Harrisburg bureaucrats selecting the booze for the entire state, and anti-consumer pricing? Or do we want the freedom of choice that the private market brings?

Privatize - all of it. Retail and wholesale. Why wait one variably-priced month longer?



*Correction: Conti was ruled to have violated the state's ethics code about a year after he was brought back as an 'emergency consultant' and paid about $67,000 more of your booze dollars. Our error, which we own up to...unlike Joe The Ethics Violator, who is currently on the faculty of the Fels Institute of Government, and a lobbyist with Triad Strategies. Great places for a known ethics violator.

** Since the PLCB hides all of their purchase information now, the $1.16 is just my best guess, but it is an educated guess...and it is most likely more.


Monday, April 24, 2017

Reality check: how is "modernization" working out?

The end of February marked eight months gone of the fiscal year, and just under seven months of Act 39's "modernization" of the state's police-enforced monopoly on wine and liquor sales, changes that Governor Wolf trumpeted as "historic."

So things are booming for the State Stores now, right? Well...not exactly.

Remember how bailment was going to cut inventory costs and save the citizens all sorts of money? It may have but it didn't last. Inventory cost went up over 10% so far this year and has now gone up over 46% since bailment was implemented in 2012. It will certainly pass pre-bailment amounts next year with a modest 3% increase. For the same period of time, the inflation rate went up 6.2%. (2012 Inventory $175,902,668; 2017 Inventory (so far) $257,285,382; Pre-bailment inventory $265,816,891)

Still, with all that inventory they must be making more money right? Sorry! Total Operating Income is down almost 5% year to date, while total assets squeaked out a gain of 4.2%. Meanwhile, Total Liabilities jumped almost 16%, from $803.7 million to 930.5 million. (And you know who has to cover that; you and me, the taxpayers.) Total debt is up almost $50 million more than at this time last year; $264,454,330 or about $26 million in additional debt than at the end of last fiscal year. To be fair, the PLCB statement has numerous notations about 'See Note X, Table Y', but they don't provide what those notes are. Are they valid reasons, or just lame excuses? The public doesn't know, and the PLCB clearly doesn't think we need to; it's kind of like their selection, if they don't have it, we don't need it.

The Never-Ending PLCB Story!
The PLCB is selling more product while making less money. In desperation, they're dipping into reserves to make a big payment to try and fend off  privatization, blowing smoke as thick as possible so you don't notice that they're going even further in the hole with liabilities approaching a Billion dollars...all the while remaining as incompetent as ever.

The benefits of modernization? I'm not seeing any evidence of that extra $137 million the Governor said they would make, and I'm willing to bet I won't, with only four months left in the fiscal year.

How many reasons do you need to get rid of this broken system and replace it with one that works for the consumer?