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.

Tuesday, August 22, 2017

PLCB Math

So here we are, about to be screwed again by the PLCB. What is it this time? More nepotism? More corruption? No, this time it's just plain monopoly gorilla tactics (yeah, gorilla, not guerrilla). They wanted to force a private business to lower their margin so the PLCB could raise theirs.

Once again, they're just playing at being a business. A real business increases profits when it reduces costs through innovation or consolidation, they change benefits, they leverage productivity, they control operating costs. The PLCB does none of that; well or even at all.

For every dollar the PLCB spends buying booze, they make just over $1.45 selling it. (PLCB Financial Report 2015-16), but that isn't enough apparently. How can that be? Back in 2013 when Bailment was put in place -- that "nifty little system" that was going to make such a big difference -- the PLCB saved enough to no longer need a tax and interest free loan of $110 million from the state to start up their operation every year.  So where did that $110 million saved per year for the past 4 years go?  It isn't zero sum as some PLCB supporters suggest. 

For instance, if you start the year in debt by $100 million, and over the course of the year you make $500 million, your net is $400 million for the year. If you have no debt to begin with, then your net is the full $500 million. The PLCB no longer has that debt every year and so should be making $110 million more every year. Are they? Not according to their own financial reports.

In 2012, the PLCB contribution to the general fund was $80 million. In 2014, with bailment in full swing...it was $80 million. Maybe they spent it on improving the stores? Nope, store operations only went up $25 million over the two year period - still missing over $195 million. ($110 million times 2 years minus $25 million) Maybe they paid down some of the non-reported (at the time) pension debt. Hard to say, but if they did then they didn't continue it in 2015-16 when they had to report pension debt. That only went down just over half a million on almost $240 million of debt - a 400+ year payback plan.

Now we have "flexible pricing," which is of course all about "our need inside this building." Since none of the top 10 sellers of wine or spirits went down in price (except pints of Nikolai Vodka, which decreased a whopping 30 cents, and let's not talk about what a whopping display of hypocrisy it is for the PA Liquor Control Board to lower the price on The Drunkard's Friend), one can only assume that the PLCB kept all the negotiated differences of the most popular items. Now the question arises: how much more do they have to squeeze us by the balls to make the projected income increase of $165 million (or $137 million, depending on who you believe)? Raising the prices on 424 items isn't going to do that. Keeping all the $2.1 million in Jack Daniel's profit — as I'm sure they are doing or anticipating doing — still leaves a long way to go. 

By the PLCB's own admission of saving $110 million a year from bailment, and $165 million from price gouging the consumer, my math says that even with paying $195 million to the general fund, the pension debt should decrease by at least $50 million, and if you count that $110 million from the 4 previous years, there shouldn't be any pension debt.

Of course, that would assume the PLCB is an efficient, well run business organization with knowledgeable leadership and people who take initiative. None of which is true. It is a political pig sty stocked with innumerable incompetents that have no real business experience and run like a old boys club, hoovering up the hard-earned dollars of the citizens while giving almost nothing worthwhile in return.

So much for the Chairman's statement of:"...we can both generate additional revenue and achieve more competitive retail prices through cost reductions, rather than broad price increases." As a businessman, let me clue you in, Tim. You NEVER achieve more competitive prices by raising the price for consumers. The idea is to gain competitive advantage over other places selling the same or suitable substitute items. I'm betting you don't have a friggin' clue what that means.
Speaking of the Chairman, he was so proud saying that the PLCB didn't initiate any price increases during the period of 02/14 to 10/16. Well, guess what? They don't have to. ANY price increase gives the PLCB more money no matter who initiates it. I bet the suppliers never initiated 424 price increases all at once, though, did they, Tim? If you listen to the fearmongers at the UFCW and their lapdog bureaucrats in Harrisburg, we are told that there are 20,000 products available from the PLCB!! Yet Ol' Chairman Timmy is complaining that suppliers tried to increase prices on about 4% of them over two and a half years! Da noive o' dose guys!

You gotta ask why the $110 million from bailment PLUS the $137-165 million from screwing the public with "variable pricing" PLUS the $80-100 million or so they have been contributing the last 7 years or so doesn't total up to at least $337 Million being turned into the state ABOVE the taxes collected. Just what black hole of incompetence is it disappearing into? The answer is that it is all a lie. While they might make something more than before, the state, the General Fund, we the citizens are never going to see it. The PLCB needs it to keep their ship of mismanagement and incompetence afloat. They always have said that the PLCB will make more, not that the state or the consumer or the citizens would ever benefit from it.
It's OUR money; not yours.
What we need now is another border bleed study next year to see what damage has been done by these idiots. My money is that real border bleed is over $500 million by then, if it isn't there already.

Now more than ever we need to be rid of the PLCB.

Privatize, now.

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?