Tuesday, November 13, 2018

The PLCB never leads only follows....sometimes even me.

We have been saying for years that the PLCB not only doesn't lead in ANYTHING. Because of the way they do things, they can only follow like sheep...or maybe lemmings.

By way of example... Way back in July of 2015, before the PLCB started a lottery to apportion their allocation of rare Van Winkle bottlings, I laid out how it would be done if I were running things. Here we are, 3 years later: let's see how the two compare.

They didn't follow my first idea: let the lottery commission handle the details. The PLCB decided they would rather reinvent the wheel. I like to think that maybe the lottery commission told them to take a hike. Why take chances? People like the lottery, they hate the PLCB.

I thought they should allow people a week to sign up. This year the PLCB gave people five days; a work week. It makes sense; management in Harrisburg doesn't work weekends. Heaven forbid they actually do something for the consumer like be open when the majority of people have time off to sign up and fill out lottery forms. What was I thinking?

It also made sense to me that everyone who signs up has to provide all their information up front:
ID -- Shipping and billing address -- credit card number (PA billing only accepted!). Get all that entered before making your picks and engaging in the lottery itself, since you're talking about a site that's been known to crash. Why risk having to enter your information again and again? They must have thought it was a good idea; they do exactly that.

My perfect lottery: a separate lottery for each item but with ALL the items on one page. That way people would just have to check the box to enter. Exactly what they did. I suggested limiting entries to one per person and that only one item could be won - they are doing that too.

Lastly I suggested that a verification code be sent with each approved lottery entry. This code would then be posted on the website so that people could check themselves to see if they had won something. We all know how many mistakes the PLCB makes just doing regular stuff and this would be another check on the system. They don't post any numbers on the website. I don't know if each entry has an internal verification code or not. I still think my way is better than what they are doing.
I wonder...
So there you have it. Did the PLCB take my freely given advice?  Did they hire an outside consultant to come up with mostly the same thing?  (The PLCB is big on consultants when they don't have a clue.) Did the lottery folks help them out?  We'll never know for sure, but you know what we think here at the blog. :)

Monday, November 5, 2018

What the PLCB does to Pennsylvania

Are we better off with the PLCB? Or is the PLCB causing active harm to Pennsylvania? It's not a set-up question, it deserves real consideration. When the PLCB claims credit, saying "We do all this good stuff," we should look at the claims and see if the "stuff" really is "good." Here are some of their top claims for good; see what you think.

1. PLCB prices are competitive.
In reality, this depends on what private store you compare them too but overall, according to the National Institute of Health, the average bottle of liquor cost just over $2.00 more in a control state than in a free state. And since this study was done before the PLCB started flexibly screwing us, it is probably more now. You don't wind up with real liquor superstores clustered on the border because they charge more.

2. The PLCB limits underage drinking.
When looking at the PLCB's own report (2017) Pennsylvania's underage drinking is at least 7% higher than the national average for grades 8, 10 and 12. What's worse, you can reasonably assume that the number is even higher since the two largest school districts did not participate - Pittsburgh and Philadelphia.

3. The PLCB limits DUI's & DUI fatalities
Using information provided by Responsibility.Org we find that for:
Percent of Alcohol-Impaired Driving Fatalities of Total Fatalities - NJ, MD and WV are lower than PA. NY is tied and Ohio (a control state) and DE are worse.
12-20 Year Old Binge Drinking in Past 30-days : PA only beats WV of the border states.
12-20 Year Old Past Month Alcohol Consumption: PA is only better than WV (barely) and NY
Alcohol-Impaired Driving Fatalities per 100K population: PA is in the middle with 3 better and 3 worse.
Under 21 Alcohol-Impaired Driving Fatalities per 100K population: Again, PA is in the middle.
There is no clear benefit from the PLCB's "control." It appears to have no effect.

4. The PLCB limits sales to minors.
According to Stacey Witalec, then Director of External Affairs at the PLCB: "... because our stores are not licensed establishments, BLCE does not perform compliance checks in them." Since they are never checked by an independent group, then claiming they are made of green cheese has as much validity.

5. The PLCB turns in (cue Donald Trump voice) Huuuuuge amounts of money every year. 
Despite the appearance given by the taxes which pass through the stores, and the "contributions" that are required by the General Assembly, the PLCB had $1.8 BILLION in liabilities in January 2018. They owe well over $230 million in pension debt. In 84 years only 3 times did they contribute over 0.3% of the budget.

6. The PLCB provides 5,000 family sustaining jobs.  

About 40% of the store workforce are part-time. If those jobs are "family sustaining," then something isn't right.

7. The people that select wine and spirits are highly knowledgeable.
Except none have the highest regarded certificates of excellence in their profession. You never hear or see Pennsylvania leading the way in new trends, cocktails, or liquors. They always follow.

8. The "Chairman's" programs are great deals.
Until you realize that most of these didn't sell well in the free market, where there is strong competition, which is why they are cheap for the PLCB to buy.

The PLCB is just a way to take money from you the citizens to keep their bloated, inefficient jobs program alive. They do nothing for the state and everything for themselves.


Monday, October 29, 2018

The Buffalo Trace and Pappy Van Winkle poster contest!

HARRISBURG, Pa., Oct. 15, 2018 /PVWNewswire/ -- The Pennsylvania Liquor Control Board (PLCB) wants to get more underage students involved in their anti-drinking poster contest...and has also started a pro-drinking poster contest to publicize the agency's lottery of rare whiskeys.

A PLCB employee (who was not authorized to lie like the official spokesperson) explained it this way. "There are millions of kids in the Commonwealth, and most of them are drinking more than the kids in New Jersey, New York, Delaware, Ohio, Maryland, or West Virginia, so they don't seem to be that interested in making posters. The adults aren't either; they don't see how important working with L.C. Bee* is: posters can make a real difference!"
These are Daddy's favorites.... 
until he gets some Pappy!
A brilliant first effort from a 10th grader in Shamokin Dam 
that advertises some State Store best-sellers!
The breakthrough moment came when some bureaucrat at the agency had a brain-surge: put a carrot on the stick! "We knew that the adults were interested in hard-to-find whiskeys," the completely unauthorized source continued, "so we thought, 'Why not allow the people who submitted the best posters an inside chance at the limited release lotteries!' That gets the adults involved, and they'll make sure the kids make posters too, so they can try and score some rare bottles! It is the perfect synergy: parents getting involved in their kid's activities, and kids learning about drinking from their folks. And when they grow up and buy more, the PLCB gets more revenue to give to the Commonwealth! After we skim off our ever-increasing operations expenses, that is."

Mom bought these at the PLCB!
This poster contest also teaches kids about business. It's pure supply and demand; almost like the real world (except in Pennsylvania, where the PLCB is somewhere in the middle, shifting the market). Kids get to learn about secondary (gray) markets, cost/value, and stupidity — all at the same time! Not to mention the art and illustration practice, drawing all those bottles and labels that we expect to see in the posters!

No, this isn't real. But if it were? We're sure it would be another example of a PLCB idea no one can remember who came up with, or find any paperwork on it. Like the house brands or wine kiosks. 


L.C. Bee! He's real! He's coming
for your parents,
the chronic alcohol abusers!

Friday, October 19, 2018

Redacted for your benefit...

Just yesterday I wrote about how the PLCB finally managed to get down to one minor inventory mistake on their listings for Jack Daniel's. That was based on checking their "database" the week before. But I spoke too soon. Never ones to rest on their laurels or maintain high standards, the registraters and data enterers have corrected their excellence. This week's database iteration shows a 200% increase in bad JD data. Back to "PLCB normal."

We have been telling the PLCB — and showing them! — EXACTLY what some of the mistakes were for five years. We aren't trained specialists like they have at the PLCB, but we do know a thing or two about whiskey. Apparently we know about twice as much as the 40 year vet of the PLCB's Chief Executive Of Doing Things Wrong, Charlie Mooney. The buck doesn't stop with with Chuck so much as it kind of blows onto the floor and slips under a desk where you can't see it...problem solved!

But we did learn something from inside the Forbidden City at 910 Capital Street. Remember that 1792 Full Proof bourbon I wrote about yesterday? The one that both the online Product catalog and the "Fine Wine and Good Spirits" (the money they paid for that name, we should use the whole thing!) website didn't show?
It isn't missing because the PLCB doesn't have it in stock, OR that they don't have the information entered yet. One of our secret army of disgruntled and fed up clerks sent us a screenshot of the secret employee version of that same page. Check this out:
Well whaddya know, there is 1792 Full Proof, just like it used to be listed on the consumer site! You know, the one ordinary citizens have to use. I know the PLCB has products in inventory that are licensee only, things that they not only don't want you to buy, but make sure you aren't allowed to buy, because they know better about what you the consumer wants than you do. A lot of that stuff isn't available for general purchase mainly because if it were someone up in Potter County might actually want to "Special Liquor Order" it — you know, like the PLCB's supporters always say is so important, the right to access to special booze in Coudersport! — and they'd lose money on the deal. Of course they would, that's what they do.

Our source didn't know why we couldn't see these "regular" and "luxury" items that are available for sale to the consumer, but he thought it was because the system was "broken,"  his word, not ours.

But we agree wholeheartedly. The system is broken, and not just the website: it's the entire agency and its reason for existence. From the preamble of The Almighty Liquor Code: "for the protection of the public welfare, health, peace and morals of the people of the Commonwealth and to prohibit forever the open saloon," or as Governor Pinchot put it, to "discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible."

It is broken, it always has been broken, and always will be broken so long as there is a monolithic, monopolistic, and inevitably incompetent bureaucracy, run by people with no real industry experience, little to no oversight, doing any harebrained things that their crazed bosses come up with (wine kiosk, anyone?). This agency has no vision, no insight, no real knowledge of what consumers want, and does not want to hear anything about that from any well-meaning and industrious folks out in the individual stores. They only follow, like sheep, as real leaders in the booze business move forward with new ideas. How good can any police-enforced monopoly be, especially when they not only don't want entrepreneurial thinking, but have laws in place to prevent it!

When everything is broken, you can't fix it. You start over...and in Pennsylvania's case, you start over where you should have started in the first place: Privatize. No matter what the PLCBniks say about "well, if we were starting back in 1934, sure, this system isn't what we'd want, but now that we have it —"

Hey. Stop right there. This system isn't what we want. Let's go with that icy chunk of truth. Privatize now. Fix what's broken: everything.

Thursday, October 18, 2018

The world as we know it is ending.

It only took 83 years, with five years of us pointing it out, but the PLCB has finally — at least for this month — listed Jack Daniel's correctly across their inventory. There is still one small mistake, but considering how bad it was for DECADES, this is pretty amazing.

Of course, the "adaptive" inventory lookup that the Chairman spoke about well over two years ago still doesn't work.  Don't put in "Jack Daniels" or "Jack Danials" or "Jack Danial's" and expect to find anything...but that's something for them to work on for the next 83 years, I guess. Nope, as of October 2018, the only questionable listing is for item 2419 (the "Jack Daniel's Tennessee Whiskey Family of Brands Combo," a pack of five different airline bottles) which is listed under the category of "Whiskies." Like a catch-all category, except it's one that the PLCB doesn't have. You can't search it on their "Product Catalog," but it does come up on the splashy 'finewineandgoodspirits.com' page. Consistency, guys...

That doesn't mean they're off the hook. There are so many more inventory mistakes to be found, we'll be busy for years to come.

Here's something that made me delve into the PLCB inventory again. I was in New Jersey and bought a bottle of 1792 Full Proof (125 proof) Bourbon. I'm not a big fan of 1792 in general, but a high proof non-chill filtered bourbon isn't that common, even more so at under $50; so I took a chance. Well worth it...if you can find it. So, back to the the online PLCB Product Catalog.

That's never as easy as it sounds. Even the PLCB doesn't think too much of their system, because right in the instructions for using the keyword search, they say, "If too precise, the product may not be returned as expected." In other words, don't put in exactly what you want, put in something close...unless it's Jack Daniel's, because then you have to be exact with the spelling of Daniel's. Which is something the PLCB apparently couldn't do for eight decades. It's tough being a consumer in Pennsylvania.

So I put "1792" into the keyword search box, select "spirits" and hit Enter...no 1792 Full Proof shows up.
OK, I'm used to the PLCB not having most things I buy. But this is pretty mainstream stuff, so I was surprised that it wasn't listed. Well, maybe it just didn't make it through the "good ol' boy" selection process, since it was fairly new. After a month I check again - still nothing. The search page says it is updated daily so if it hits the system, it should show up right?

Wait a minute...I head over to the FWAGS website to see what is there. Sure enough, the Full Proof is an "Online Exclusive." Now, the Online store is technically a store, and everything in it used to be shown in the Product Catalog because, well, you know, it lists "everything." So I randomly search for some things listed as "Online Exclusives" — McKenzie Rye Whiskey, Peerless Kentucky Straight Rye Whiskey, Highland Park Full Volume, and a few others. None of them show up any more. That is helpful in a uniquely PLCB kinda way. Great way to sell product - don't let the consumer find it.  Must be that "control" they always talk about.

I know we don't do much wine here, but...if this is what they're screwing up with a few hundred whiskeys, can you imagine how they're screwing up thousands of wines? The mind boggles.

Hey, PA legislature — are you sure we can't do better?  Privatize.

Tuesday, October 16, 2018

Let's talk New Jersey just a bit

This is a blog about Pennsylvania's drinking problem -- the PLCB. But sometimes we look at how other states do it, either to see how it's done right, or how it's done wrong. Today, "done wrong" is the New Jersey Division of Alcoholic Beverage Control, and their recent "crackdown" on limited brewery licenses...which was followed by an amusing 180 when they were brought to heel.

Let me explain. A limited brewery license is a relatively new thing, an adjustment to the NJ Booze Code that was just passed in the Garden State in 2012. I'll save you the trouble of looking at it: it's a license for breweries that produce under 300,000 barrels a year, and allows them to sell to wholesalers or direct to retailers, sell directly to consumers on their premises (by the drink, or in quantities up to a half-keg at a time for off-premise), and give limited amounts of free samples. The license is an annual fee, between $1,250 and $7,500, depending on the size of the brewery.

There are two restrictions in the law. On-premise sales must be "in connection with a tour of the brewery" (which has been interpreted to be as simple as signs on the brewing equipment or a three-minute instructional video). And "The holder of this license shall not sell food or operate a restaurant on the licensed premises." And that's it. 

And yet...last month, David Rible, the director of the NJ Division of Alcoholic Beverage Control (ABC, and why does it say "control" if they don't have state-run stores?) took it upon himself to arbitrarily issue a restrictive ruling that suddenly limited that "limited license" with a load of restrictions that seem to go way beyond the NJ legislature's original intent of "in connection with a tour" and "shall not sell food." 

Rible's ruling on consumer freedom
According to Rible's ruling, the limited license holder was now restricted to 25 "events" per year; "Trivia night" is given as an example of an "event," but so are "live" television display of sporting events, and each event must be approved by the ABC. The license holder may only do 12 off-premise events in a year; beer festivals are not included, but events in the brewery parking lot are. They are allowed to host up to 52 "private events," but only in a walled-off area. These "rulings" make things a lot less fun, but then Rible just got stupid. Yeah: David Rible got stupid. PLCB-level arbitrarily stupid.

The food thing got crazy. No food trucks are allowed, which...how? Why can't a food truck park in the lot? Then this one is just a killer: "No restaurant menus of any kind shall be placed or maintained on the licensed premises of a Limited Brewery." Which, one, in the era of GrubHub and Yelp is just stupid and pointless, and two, would seem to violate all kinds of commercial free speech.

Then there's this one, which is just weird: "A Limited Brewery licensee shall not allow, permit or suffer other mercantile business, such as "pop up' shops, bazaars or craft shows, to occur on the licensed premises." Sounds like Rible doesn't like hippies.

Upshot: there was a huge uproar from consumers, breweries (and I suspect the legislature), and within about a week, Rible was back-pedaling like mad. The whole thing was suspended, and now the Legislature is going to revisit the limited license. (And some brewers are pleased with this! Be careful what you wish for...)

Sigh. This is exactly the kind of crazed arbitrary rulings the PLCB loves to make, regardless of consequences. Rible is not a judge, he's not a legislator, he's certainly not the governor. But he took a law, and simply rewrote it. He presumed to know what the legislators really meant when they said "in connection with a tour" and "shall not sell food," and that was "don't take business away from complacent tavern owners." 

Rible's Library of Arbitrary Decisions and Policy Mistakes
Whoops. Did I say that out loud? Yeah, it sure looks like he did this to please tavern owners, who felt they were being gored by this limited brewery license. After all, because New Jersey has the same stupid limits on licenses that Pennsylvania does -- only worse! -- they had to pay a LOT more for their license, often over a million dollars. And that doesn't seem fair. 

Well, it isn't. But it's not the brewers' fault, and they shouldn't be punished for simply following the law. There wasn't any news of breweries selling food, and every New Jersey brewery I've ever been to (a lot of them), has offered some kind of "tour". 

No, the real problem here is that the licensing system is broken, and no one who currently has a license wants it fixed. Sound familiar? 

I'll spell it out for you. The arbitrary decision by the PLCB to allow grocery stores to sell beer because they have purchased a restaurant license (and maintain a "cafe" area separated from the rest of the store) is a bad idea, and it is only making the broken licensing system worse. And in the future, if the Legislature wants to fix that by creating a new, reasonably-fee'd store license, guess who's going to be spending a lot of money to convince them that's a bad idea? The grocery chains who spent millions buying restaurant licenses, that's who. 

Leave it to the Legislature. They answer to us. Bureaucrats like Rible, and the PLCB, rarely answer to anyone. Though I do have to admire the brewers of New Jersey for standing up to this bullshit. Well done! Hold onto those menus!

New Jersey's example is clear. As long as the PLCB has this kind of arbitrary regulatory power...mistakes will be made. The solution? It's at the top of the screen, as always: Abolish the PLCB. Rewrite the Code. 

Thursday, October 4, 2018

Oregon: the 2nd highest liquor taxes in America! Or are they?

Today we are going to look at Oregon, home of the Oregon Liquor Control Commission (OLCC), and generally considered to have the second-highest liquor taxes in the country behind Washington State. They are a control state for liquor sales, but wine sales are private business. This chart by The Tax Foundation shows the tax levels for 2016; Oregon appears to have a tax rate of 3.1 times that of Pennsylvania.

Wow. If we have high prices, the prices in Oregon must be astronomical, right? Let's compare some of the top selling liquors in the two states today, now that we have the additional wonder of variable pricing. Keep in mind, the PLCB's very own report on variable pricing says nothing about using price negotiation to benefit the citizens, only about how much more money they can take from us in "Revenue."

We're going to compare the prices for the top selling spirits in the PA State Stores from 2017 (Fiscal 2018 ended 3 months ago, but the new report still isn't out) to those same bottles from Oregon, using both state's website prices. We'll give you the OLCC price, and the PLCB's shelf price (and out the door price). We'll explain that shortly.

First on the list is Tito's Handmade Vodka. Oregon # 8488B is selling at $23.95. The PLCB has it as # 9359 and it is on sale this month for $17.99. ($19.07) Yay us!

2. Captain Morgan Spiced Rum: Item # 0475BB in Oregon, selling for $16.95. Here it is Item #8865 at $17.99 ($19.07).

3. Jack Daniel's No. 7: OLCC Item #0146B, which sells for $21.95 (on sale this month); or you can pay $25.99 ($27.55) for Item #4291 in the State Stores. Such a deal!

4. Fireball Cinnamon: Oregon item #0939B for $15.95 in plastic, or $17.95 in glass. The PLCB equivalent, #4302, is on sale for $17.99 ($19.07). Even on sale they can't match the Oregon price. How much do you reckon they had to variably mark it up for that to happen?

5. Jameson Irish Whiskey: Item # 0391B for $29.95 in Oregon; or pay $29.99 ($31.79) for item #7303 in Pennsylvania.

6. Bacardi Superior Rum: Oregon #6179B is currently selling for $12.95. But it's on sale at the PLCB! Yeah! Item #7970 is on sale for $13.99 ($14.83). Wait...what?

7. Grey Goose Vodka: Oregon's #0636B at $35.95 compares to the PLCB's # 8963, selling for $32.99 ($34.97). Hey, we won one!

8. Crown Royal: Oregon's #0311B is going for $27.95 there; but #5186 is selling for $28.99 ($30.73) here. Screwed again.

That's the tale of the tape. Now we'll explain it.

Why did I include the out the door price for Pennsylvania, but not Oregon?  Because there are no extra or hidden taxes in honest Oregon. The price you see on the shelf is the price you pay: no hidden variable markup, storage fees, extra 1% 'just because' fees, and no sales tax dumped on top of the already taxed liquor. Kinda makes you wonder about the "negotiation" on those JD prices in Pennsylvania, doesn't it?

Remember that these are the largest selling 750s in Pennsylvania*. If there was any buying power leverage that could be used, it would be on these items. So what did that buying power get us? Jack went up a dollar, as did Fireball, Bacardi Superior and Crown Royal.

Looks like Oregon has pretty competitive prices even though their tax rate is THREE times as much. How is that possible? Hidden taxes, with the main one being product markup, the bloated PLCB "profit" that's being used mainly to pay for bloated PLCB operating costs. It used to be fixed at 30%, but now it is whatever they need it to be -- that's "variable" pricing! -- to pay off their burgeoning overhead, incompetent decision making, and of course to maybe pay some of the pension debt they owe. Need more money? Just vary the pricing! UPWARD!

You see, in Oregon they just have taxes, and it's transparently easy to find exactly what they are. From that they pay for the OLCC's costs. Here in Pennsylvania, we have the super-secret Variable Markup that no citizen is allowed to know, used to pay for the PLCB and whatever idiocy they come up with: wine kiosks, house brands, courtesy training, bad contracts, renaming stores for the 4th or 5th time...you get the idea.

Oregon's listed tax rate may be OVER 3 times that of Pennsylvania, but our secret taxes make them almost equal on many, many items. This is what we get with an "independent" agency with almost no oversight, no experienced business people in charge, and 80 years of cronyism and incompetence at every level. Is this the system that is best for the citizens? Are you sure we can't do better by having real business people run real businesses in competition with each other for the consumers' dollar? You know...just like you buy everything else?

Privatize - now more than ever.

* (Oregon does not carry the same bottom shelf vodka that the PLCB does, so that was left off the comparison.)