Tuesday, January 25, 2011

Privatization chances handicapped by experts

See that quote over to the right, from former PLCB chairman (1995-2002) John Jones? He's talking about Tom Ridge's attempt to privatize the PLCB in 1997, and why it didn't work: lack of support in the legislature and the public. Read it again:
"...there was [in 1997] no overarching passion within the General Assembly, or in the public at large, for privatization. Unless and until there is a general hue and cry, it is very unlikely there will be a privatization initiative that succeeds."
Jones and other former PLCB members are quoted at length in today's Scranton Times-Tribune, giving their impressions on the chances of privatization succeeding this time around. I found these quotes by Jones's predecessor, James A. Goodman, who served from 1987 to May 1995, to speak directly to Jones's previous statement.

"Since the system has been in existence, there have been bills in the Legislature" to privatize state-run liquor stores, Mr. Goodman told Times-Shamrock Newspapers on Monday. "But I would consider this to be the most serious threat for it to happen. You have the governor and you have the majority leader (state House Republican Majority Leader Mike Turzai, R-28, Pittsburgh) as the prime sponsor of the bill. That's a lot of juice. And you have newspapers ... editorializing in favor of it all over the state."
Don't think that means Goodman is in favor of privatization. He said he opposes it, apparently (the paper didn't quote him directly) because the system funds alcohol education and enforcement efforts. Well...given the problems we've had with enforcement efforts, maybe they could use some shaking up.

Here's something I just don't get. One of the arguments against privatization is brought up by John Reiley, who was the PLCB secretary for 29 years (WTF? Really?!): "One driving force behind the effort is "big business trying to latch onto those profits" that the state now sees through its monopoly on liquor sales, Mr. Reiley said." Well...yeah! That's what retail business does. It's called capitalism, and the profit motive, and that's the reigning model in the United States, has been since 1776. Supporting the PLCB against privatization is anti-business, plain and simple...which smacks of anti-Americanism.

One of the biggest balls of bull that's being batted around (on both sides of the debate) is the number on what the State might net by auctioning off liquor store and wholesale licenses (and real estate, and stock, and fixtures, and all that jazz). It's all either pie in the sky numbers from those in favor, or lowballs from those opposed (mostly the union, but also religious groups and anti-booze groups, who are really drinking the "control" Kool-Aid). We need real numbers; and the paper also has a report on a possiblity that the House will contract for an independent study on that. Good. We need real numbers.

Because this is important. Turzai is pushing to have a bill through the legislature by Memorial Day. To move that fast, we need real information, and we need real alternatives. My major issues with Turzai's legislation? Not enough licenses (we really ought to have at least 1,200, not 750), and not enough limits on who gets them (I really like the idea of no company getting more than three, but 10% is too many; and I'd really like to keep any current or former legislators out of ownership). And maybe some other stuff. Discuss!!!

10 comments:

Jeff Frane said...

Why place a limit on licenses at all? For many years, Oregon had a severely-limited number of bar licenses (everyone else was restricted to beer & wine). Not only were they very expensive, but they were essentially unavailable to new businesses, unless one of the license owners was retiring. Those restrictions were dropped, apparently at random, quite a few years ago and Oregon has somehow survived the explosion of bars.

The only rationale for restriction is prohibitionism. Obviously, if there is a liquor store on every corner business will grind to a halt and the sidewalks will be piled with drunkards -- much like yourself. And me.

Lew Bryson said...

For what it's worth, Jeff, I agree. But I also want to get this passed, and it will never pass without a limit on licenses. Being pragmatic.

Jeff Frane said...

In that event, 1200 seems a little arbitrary. (OTOH, 750 seems ridiculous. Is that just for Philadelphia?)

Lew Bryson said...

1200 is completely arbitrary. There are about 620 state stores now, in the whole state: the proposal is to increase it all the way 750!!! Probably be sidewalks piled with drunkards...well, you know.

If we had about as many as New York state, proportionally by population, it would be about 1500. I just hit 1200 in the middle. But man...750? Come on!

Jeff Frane said...

620 stores? And these stores are the only places to buy spirits and wine and beer? How screwed up is that?

Lew Bryson said...

NO. Beer is private stores, always has been; you just have to buy it by the case. But yeah: there are only about 620 stores (I keep saying "about" because they're opening and closing a couple few stores all the time...and because they insist on referring to their stupid automated kiosks as "stores") where we can legally buy a bottle of wine or spirits, and we're not legally allowed to buy a bottle outside the state and bring it in. Really.

Gary said...

"Mandating the use of I.D. scanners with age verification software." I've not seen anyone discuss this aspect of the bill, but it's a point I'm really against; it would change the law from being 21 to having the proper credentials, a very different situation. I'm 55 years old and have to show I.D. every time I buy beer at Wegman's, because of their extreme fear of the PLCB and it's entrapment policies. It's not hard to tell who needs to be carded, and who's obviously legal... we have plenty of stiff laws in place to address not serving minors, don't need to legislate a blanket approach!

Lew Bryson said...

Gary,
As I've said elsewhere, I am of two minds on this. I don't like the invasion of privacy (http://noplcb.blogspot.com/2008/06/reason-8-octopus.html) at all. On the other hand, it would totally deflate the PLCB apologists' argument that they stand between us and a tidal wave of teen-drinking. A bogus claim, largely -- even the PLCB admits in their bi-annual report that teen drinking in PA is about the same as it is in other states in the northeast -- but you can't shut these people up with facts, apparently.
Pushed, I would admit that I'd much rather have the privacy. But as I just told someone else: Turzai's bill is a proposal. It ain't set in stone. We need to unpack it and see what we want to push for and against. Me, I'm not nuts about one company being able to own 10% of the licenses in the state. Not at all. I'd like to see a lot more licenses, too, about twice as many. For starters.

Anonymous said...

You are not nuts having 10% of ownership with licenses for state stores,so why in the world can a few wholesalers have 100% ownership and distribution of beer in Penna.
They control prices,they selectively give larger distributors better deals and will put the smaller guys out of business,and if you do not like it good luck trying to buy your Miller,Coors,Bud somewhere else.

Anonymous said...

As someone who distributes within the system selling wine and spirits, I have mixed feelings about the system going private. My "gut" is for it, as I have no love for the systematic roadblocks that we put up with everyday. My concern is for the confusion and disarray this will cause with restaurant licensees getting their specific products without having to deal with an even more unorganized system. One thing rarely written about is that most restaurants of quality buy special liquor order wine, not normally shelved in state stores. The process they have to go through now to order and receive is slow, and completely reliant on the proven to be broken computer system that the plcb paid 30 million dollars for. I talk to many plcb clerks who all "hate" the way this new computer system has slowed down the system, provides inaccurate inventory,is no better than what was in place before. So my concern is, what order process takes over when the state privatizes? What new systems will restaurants who have been burdened by the plcb for years, now be forced to work with. Will they be better? Will they order directly from the distributor? Will they go through the state at all? Retail sales are dominant here for sure, I make no statement to the otherwise. However there are many distributors with large staffs, and many privately owned restaurants that wants to know what is next for them if this goes through. I want to see an article on that for a change.