Monday, November 12, 2012

The Beer Law Forum at Yards last week

As I warned you, we had another Beer Laws Forums at Yards Brewery in Philly last Thursday, set up by Philly Beer Scene. Senator Chuck McIlhinney was there, as were Bill Covaleski, of Victory Brewing Co., representing the Brewers of Pennsylvania, and Mike Gretz Sr. of Gretz Beer Distributors, representing things from the wholesalers point of view. I was on the panel representing the drinkers, and Tom Kehoe of Yards moderated. 

This was quite timely. Senator McIlhinney is going to be the new chairman of the Senate Law & Justice Committee (which handles liquor control), and to have him this engaged was great. He's obviously actively seeking input on this. We went right to him out of the box, asking why we had no sixpack sales in beer distributors. He started going off about grocery stores and the three tier system, and I interrupted him to explain that we were talking about the case law: why can't beer distributors sell beer by the sixpack? It would seem to be pretty simple.

But that set the tone for the whole night, and a frustration that has become familiar to those of us who want to rewrite The Almighty Liquor Code. It's because, he said, there are 22,000 licensees (tavern and deli licenses and such) in the state who don't want to lose their sixpack business, and they all vote. It quickly became apparent from audience comments that their employees vote too. But what about us, I responded: there are millions of us, and we vote. How can we make that important? It was a question we tried to get answered all night; we got something toward the end.

That led into a fairly simple question by Tom Peters at Monk's Cafe: if a beer is not registered in the state, and they want to get it in for a trial run, or a special event, is there some way to get it in without giving all the distribution rights to a wholesaler? Mike Gretz took that one and seemed to be saying that you could already do this under current state law (but several people in the room who are quite conversant with The Almighty Liquor Code told me that this was simply not so; I'm not sure). 

(Gretz took the opportunity -- as he did at least one other time -- to speak about the family businesses wholesalers represented (and the jobs), and the almost sacred trust of controlling alcohol abuse. I didn't agree with some of it -- it's just a defense of the three-tier system that wholesalers have been using successfully for years -- but I'm not insensitive to it, either. It's just that I can't help noticing that other states have sixpack sales AND sales in grocery stores, and there are no roving gangs of boozed-up semi-zombies there. Food for thought.)

Tom Peters would be quite vocal in support of the tavern owners' interests (understandably so) through the night. What are the tavern owners' interests? They have an asset -- their license -- that is quite valuable, worth tens of thousands (or even hundreds of thousands) of dollars, and they don't want to see anything happen that will decrease the value of that license. Beer distributors selling sixpacks will cut into their sixpack business. Well...maybe. But the grocery stores that bought bar licenses to sell sixpacks are cutting into it now, and the fact is that for most licensees, sixpack sales are a tiny part of their income. Even those who have used their license to run sixpack stores would probably be able to compete, though with lower markup and more effort. But if they're going to give that right up, they want something in return, and where politics and the art of the possible will come into play. 

And that is why we have no sixpack law, because the tavern owners haven't been happy with any deal they've been offered. I get that it's their family business, their livelihood, but...we vote too. Maybe, with an activist leader coming to the committee, it's time to cut that deal.

Speaking of cutting deals, we did get into privatization. The senator is backing a plan to sell wine and spirits by the bottle for takeout at bars. The licensee would pay a $10,000 annual fee for that right (this would obviously lead to the equivalent of specialty bottleshops like The Foodery, but for wine or spirits, or both). Tom was skeptical; many places don't have the room for the inventory that would require. Well, then don't get the license, or figure something else out: if there's money to be made, people will figure out a way to make it

That's 22,000 possible additional liquor stores, of course, and that sounds interesting, until you understand that the Senator's plan still has the PLCB as wholesaler. So there's your selection, shot in the arse. Although who knows, if they don't have to figure out how to sell it, maybe they'll actually get some good stuff in? Thing is, we don't know, and that's when I blew my top and started shouting. I thought this was an idiotic plan -- I still do -- and that it's not really what we want, which is privatization. I calmed down, embarrassed, but still angry.

Then the Senator pointed out that while he would like to replace the state stores with private outlets (that's a paraphrase, I didn't get the exact quote, but it's very encouraging from a state senator running Liquor Control), we had to realize what he had to work with. "40% of the townships in Pennsylvania are dry," he said. Let me repeat that: Senator McIlhinney said, "40% of the townships in Pennsylvania are dry."*

That may seem crazy in 2012, but consider. NONE of the townships in the five counties in southeast PA are dry, so we're not the best judges down here. I do know of dry townships where I grew up in Lancaster County; they're still out there, and they don't go wet. As the senator said, increasing the number of licenses sounds great to you here, but when he goes out and to try to convince a senator from Adams County (west of York) on this, he doesn't get a lot of support from the area. It's pretty rural, pretty conservative. 

I think that was when we got a great comment from the audience: If alcohol is so important and dangerous that you can't privatize it, why are we privatizing schools? The wholesalers and tavern owners talk about family businesses, my parents are educators, this is my family business, and you're privatizing the education of your children. If you can do that, why not wine sales? The Senator denied that schools were being privatized -- maybe not up where he is, but in Philly they were -- and the whole thing got a bit disjointed, but it was an excellent point. It also underscores that most of the arguments against privatization are about union jobs and tax revenue, not health and safety.

We decided it was time to wrap things up, so we asked the Senator: what do we do to get through to our legislature that we want this to happen? Show up at things like this, he said: done. Write to your legislators: do it. What about other legislators? He kind of chuckled: you don't vote for them, so they won't really be impressed. Maybe, can't hurt (I wrote the governor, too, BTW).

The thing get their attention, you have to write often, and there has to be a LOT of you. We are going to have to organize, and as this is all going to start up again in February, and we don't even have buy-in on what it is we want...that's daunting. So by the end of the week: I'll have a punchlist of what it is we want. We'll go from there.

Remember: Privatization IS Modernization; an End to The Case Law.

Note that this 2009 newspaper piece gives a number of 28% of the townships and municipalities as dry, and 12% of state's population lives in them. Even though that's less than 40%, it's still a lot.

Wednesday, November 7, 2012

The Election's Over, It's Time To Get Back To Work

The PLCB clerks have a "Save the PLCB" page on Facebook -- can't blame them, but they're standing in the way of progress toward modernity -- and this was just posted early this morning:
"Back to the subject the time to promote modernization is today! New reps need our input! Modernization is the way we move forward! Write, call, visit your Reps new and old. Strike while the iron is hot!"
We need to meet this. PLEASE reach out to your legislators (almost all of them were re-elected, so don't delay: HIT IT NOW) today and congratulate them, and let them know that you're counting on them to come up with and support a solid plan for privatization, NOT "modernization."  
Privatization IS modernization: that needs to be our slogan. The thing is...the PLCB's "modernization" plans are untested, their execution on modernization in the past has been problematic at best (the wine kiosks are only the most visible failure), and really...why would you go to an agency that has so many issues with customer service and central command-itis for ideas on how to "modernize"? 
Privatization IS modernization. There's nothing untested about private retail, it's not only how most other states (and countries) sell booze, it's how Pennsylvania supplies food, clothing, books, housewares, fuel, electronics...everything else people buy. Total Wine knows how to sell booze, Joe Canal's knows how to sell booze, almost every drugstore in Maryland knows how to sell it: it's not rocket science, and it's definitely NOT so dangerous that the state has to do it. 
It's also not really about revenue: the taxes will continue to come in, and all the Legislature will have to come up with is less than $100 million out of a $27 billion annual budget. I think there are some cuts in the Harrisburg establishment that could neatly cover that...and it's well worth it to stop treating Pennsylvanians like children. Besides, border bleed will go down significantly and we'll actually get MORE tax revenue. 
Privatization makes more sense than "modernizing" a system that most Pennsylvanians would really rather do without. Solve it all, simply, and you'll actually create jobs. Sure, the jobs of the PLCB will be largely lost, but they'll be replaced by jobs in the private liquor stores. 
Write your legislators. Today. Tell them you want privatization, not modernization.   

Monday, November 5, 2012

Is Privatization Dead? Not at all!

The Legislative session is effectively over, and the privatization bill has died with it. No one's doing anything till after the election, at which point privatization would have to be re-introduced. Mike Turzai, the vocal champion of privatization in the State House, damaged himself badly with a gaffe about voter ID, and by failing to bring privatization to a vote. Governor Corbett has said recently that privatization is still a top priority, and that he will present a proposal next year, but the Legislature may change hands, and his approval ratings are low.

We're screwed, it appears.

Oh, shut up. That's just what the PLCB partisans want you to believe! The truth is that the PLCB's incompetence is the gift that keeps on giving. As long as they keep screwing up, privatization is going to be in the Legislature's face, and the Internet makes it even easier to keep up the pressure.

Don't believe me? Take a look at this recent Philadelphia Inquirer poll. "The poll found that 55 percent of respondents supported privatization, 28 percent opposed it, and 17 percent either did not know or did not answer." That's almost 2 to 1 in favor among those who have an opinion. It gets better: "61 percent of respondents in the bipartisan survey said they supported allowing grocery stores to sell beer and wine." Even the clueless Legislature can't ignore numbers like that forever (except they will, because the unions that represent the State Store workers continue to get right in their faces and remind them that they vote and that they give lots of juicy campaign donations).

The PLCB stepped in it again during Sandy last week, when they shut down the entire State Store System for two days. Now, some of the stores were without power, and some were in areas where it was dangerous to drive...but the PLCB drove home the problem with a stupid state-wide monopoly by shutting down every single store, regardless of local conditions. Even some of the employees admitted it was a stupid thing to do.

Want more? How about even more bad press for the goofballs who run the PLCB and the State Store System? That's right, Joe Da CEO was in the news again, and it wasn't because he's a great humanitarian. It's about that dopey Tableleaf in-house wine brand they shoved down the throats of Pennsylvanians. The Legislature wanted to know how and why this lowball wine brand came to be on the State Store System Shelves in (unfair) competition with other brands, and Conti told them that vendors approached the PLCB with wine samples. But that's not the story PLCB marketing director Jim Short tells: he says he went to the wine companies looking for cheap wine to put under the Tableleaf label. Hmmm...a falling out between two of the people at the PLCB under investigation for corruption with vendors? 

It gets worse, according to a story on the TribLive website:
Conti told the House committee that the Wine and Spirits Advisory Council, a group of consumers and liquor license holders empaneled by the LCB, tasted samples of wine submitted for consideration by a number of vendors competing for the TableLeaf brand, transcripts show. But those council members deny being involved.
In later interviews with the Trib, Conti changed his story again, stating that an LCB wine educator and outside sommelier tasted samples submitted by vendors.
But Judy Carroll, a wine educator for the central region of the state, said educators don’t play a role in choosing products. “I do classes and seminars with the people who work in the (state) stores,” Carroll said.She said her six counterparts elsewhere in the state all do the same thing: conduct classes to educate state store workers.
And Melissa Monosoff, the sommelier under contract with the LCB from December 2007 through November 2011, said she was not involved in the development or selection of TableLeaf wines “in the slightest” and had “no idea who was.”

Conti, once again, has apparently misspoken. That's the arrogance of the PLCB for you.

Want more? How about this: The LCB, the Board itself, is making a dumb show of its obligation to meet publicly. Check this out, again from the TribLive website:

A Tribune-Review analysis of nearly three years of LCB meeting records, along with attendance at meetings, shows many of the board’s twice-monthly meetings lasted just 15 to 20 minutes with little or no public discussion before votes. Critics speculate the lack of discussion means the bulk of the agency’s decision-making occurs out of public view.
“It appears that ... the staff and the board members have developed a way of doing business that is difficult, if not impossible, for an average citizen to follow,” said Senate Majority Leader Dominic Pileggi, R-Delaware County, an advocate for increased government openness.
“Certainly, these issues of how the board operates will be given a fresh look as we work through the legislation for changing the way citizens are able to buy alcohol,” Pileggi said.
Unfortunately, what Pileggi means here is that the Legislature is still considering the ill-advised "Modernization" program that the PLCB is advising! Does this make sense? Here's an agency that is crippled by incompetency, riddled with corruption, consumed with its own arrogance...and you think it's a good idea to let them tell you what's needed to fix their problems?! 

We have a big job ahead of us in 2013. We need to remind Governor Corbett of his promises. We need to remind the Legislature and Senator Pileggi that we want privatization, not some crappy "modernization." We need to get a good, fair bill that gives us privatization that makes sense, not the cock-eyed greedfest that got passed in Washington (that people still seem to prefer to the old state store system). And we need to get serious about it. 

Get started now. If you're in the Philadelphia area, please come out this Thursday to Yards brewing for our second beer laws forum: if you WANT it to cover privatization, I'm willing to expand the conversation. We had 100 people at the last one, I'd love to have an overflow crowd. We're going to be talking about how to take action. It's time to get rolling.