Wednesday, May 7, 2008

A Bit of Honesty

You know...when I was researching the latest Reason, the one on the Emergency Tax, I took a look to see what expensive whiskies the State Stores carry. The most expensive single malt Scotch whisky regularly carried was The Macallan 18 Year Old, at $129.99 (the Stores also carry Johnny Walker Blue, a blend, at $199.99; tip of the hat to a State Store employee who pointed that out, and my apologies). Ha! I thought to myself, anything more expensive is a special order because the State knows its mark-up and tax will make it worthwhile for people to go out-state to buy it!

So I went looking for prices on the Macallan 18, to shame the State on the price of their booze...and didn't I find that Total Wine in Delaware has it for $149.99, and that's also the price that my go-to out-of-state booze source (not that they're allowed to ship to PA, because that would be illegal by PA State law...), Binny's of Chicago, shows on their site.

I guess that means there's only one thing to do...

Reason #1 for keeping the PLCB:

The hugeness of the PLCB monopoly means its buying power can get us a few deals.

Wonder if there are any other such reasons? If there are, and I agree with 'em, I will post them. It's only fair.

9 comments:

Mr. Thursday said...

I'd be curious to see how occasional those deals are. Saving 15% or whatever on 18 year old Scotch is great. But, obviously, liquor stores sell a lot more Johnnie Walker Red Label than they do Macallan.

I mean, what are the kids drinkin' these days? Smirnoff? Jameson? I'm curious the price difference there for PA vs other states, for the kinds of drinks that are most common.

Of course, the people who drink plastic bottle liquor don't really care what they're buying or who they buy it from, they just want to get it. But, so few people (whether they care or not about quality) can actually afford $130 bottles, that the most relevant product costs, I think, are the mid-range liquors and wines. The bottles that run $30-$80.

Doing just a quick search, here are some numbers:

Product - PA Price - State Line (MD) Price

Jameson 18 Yr - $77.99 - $72.99

Michael Collins - $24.99 - $29.99

Johnnie Walker Gold - $79.99 - $65.99

Martell Cordon Bleu - 92.99 - 89.99

Glenlivet 18 Yr - 66.99 - 79.99

Knob Creek - 53.99 - 48.99

Stolichnaya Elit - $59.99 - $59.99

Grand Marnier - $61.99 - $68.99

Macallan 18 - 129.99 - 134.99

Now, obviously, this is a quick-and-dirty sort of study. I used a nice swath of liquor types (blended, single malt, vodka, etc), but didn't control for bottle size or anything else. Plus, it's a teeny-tiny sample size.

But, it would appear, at this first glance, that the prices are generally slightly cheaper in Maryland, though when PA is cheaper, it's cheaper by a lot. It would also appear that, in regards to Macallan, Total Wine/Binny's just have a really lousy price, as PA only charges slightly less than State Line does.

I'd love to study this further, to be honest. If all the various taxes that PA applies can be ascertained (which, of course, is trouble enough, though you've got a good start), it should be possible to see just how strong PA's buying power HAS to be to compete with State Line/Total Wines. That is, I'd find it interesting to get an answer to this question:

If State Line buys a bottle of whiskey for $10, what's the highest amount PA can pay for the bottle to match State Line's retail price?

Now, obviously, State Line can charge whatever they want for whiskey. If they want to mark it up 10,000%, that's they're deal. But PA can't really control they're costs as well as a business can (they're obligated to enforce these taxes), so it might be worthwhile to compare the PA tax markup to an average liquor store markup.

Ah, so many questions, so much math.

sam k said...

Well, you can't be accused of being one-sided, now can you? As we have discussed in the past, I have found that as far as liquor goes, the PLCB is tough to beat price-wise. Having shopped in various locales over the years, whiskey tends to be a bargain in the Keystone State. Wine seems to be a different story, but wine and I are not good friends, so I don't pay attention like I do with booze.

You can actually special-order Rittenhouse Bottled In Bond at $11.82 per bottle by the single bottle...cheaper than ANYWHERE!

Lew Bryson said...

I'd like to see some more comparisons on every day booze: Smirnoff, Bacardi, Beam white label, Dewar's, stuff like that. And wine, too, because I understand that's where PA really loses on everyday stuff...but I don't know. Hey, I'm just getting started.

Lew Bryson said...

That Rittenhouse price is crazy, Sam. I gotta order some of that. After all, if the PLCB's going to offer it, I'd be stupid not to take advantage of it.

Mr. Thursday said...

Well, if you want any help doing the research, let me know. I'm game.

Rich said...

Are you keeping score, Lew?

BTW...I think you would find that if the liquor industry in PA were open to competition, you would have variations where some stores offer product A cheaper and others offer product B cheaper. The comparison is interesting, but you are comparing the monopoly to ONE store. There are surely others that are competetive with the monopoly because they have a similarly large amount of buying power, maybe not as big as PA, but big in comparison to their other competitors.

It's a fairly weak reason FOR the PLCB. Aren't our freedoms as consumers more important than price?

Lew Bryson said...

Oh, there would absolutely be differences among private stores' prices. You find that now with supermarkets. But nothing has the PLCB's buying power. It is the largest purchaser of wine & spirits in the U.S., period. It is by far the biggest buyer of the control states. Why it doesnt' do more with this is baffling.

As far as it being a weak reason, well, yeah. I mostly entered it in the name of honesty.

Jas. said...

sam k, lew: I bought the Rittenhouse rye at canal's on rt. 38 for $10.99 not that long ago, so the $11.82 is OK, I guess, but not that great.

Of course I would never break the law, so naturally I drank the whole thing while I was still in jersey.

wink wink

Anyway, the other thing to keep in mind is if you SLO it, there's a case minimum. I like Rittenhouse a lot, and not just because of the price, but even so I don't know how quickly I'd go through 12 bottles.

Percentage wise the markups really become more stark on less expensive items. For instance take an incredibly cheap vinho verde, like Gazela. I think it's $4.99 a bottle at Total Wine in Cherry Hill, and it' s $9.99 at the state store. While that's the same $5 difference as say, the Jameson 18 year that mr. thursday posted, it's a 100% difference as compared to a 7% one.

Of course it also makes it seem like a much "better" wine than it actually is, being a $10 bottle instead of a $5 bottle. Which means you wouldn't buy a case of it and swill it. So I guess the PLCB is controlling consumption that way...

sam k said...

Jas.,

Yes, the $10.99 Is a better price, but not substantially less than what the PLCB is asking. "Not that great" is definitely an exaggeration of the reality here. $11.82 is a GREAT price. Though I have not ordered the Rittenhouse yet, I have been in close and extensive contact with a PLCB representative in Harrisburg recently. It has been a very rewarding exchange of information (really!). She has been very helpful, and among other things informed me that Rittenhouse has no minimum for a special order. Those items with a minimum all have that minimum posted on the PLCB site.

I had been told previously that all SLOs had to be a case minimum, but I'm going to check out this recent information for validity and report back.

Stay tuned!