Back in October of last year,
PLCB Chairman Tim Holden (a political appointee, with no major business experience) put out
this piece of propaganda, trying to fool us into believing that the PLCB's new "Flexible Pricing" was good for them. (We've been telling you for years it's a bad deal for consumers, but the Legislature handed it to the PLCB.)
Holden gets off to a bad start by using an example of Pennsylvania's "top selling
Bourbon," Jack Daniel's. It isn't Pennsylvania's top selling Bourbon...it's Tennessee Whiskey, says so right on the label. A small strike, but the kind of product ignorance that's typical at the PLCB.
But it's what he has to say about Jack that's interesting. "In February 2016,
Virginia’s price per bottle from the supplier of
this product was $12.14, while
Pennsylvania’s was $14.46. The retail
shelf price on June 1 in both states was the same: $24.99." This just shows that the PLCB was too incompetent or lazy to negotiate better pricing for 82 years, and despite what they might claim about their new flexible pricing powers, there was nothing in the liquor code that prevented them from doing deals on pricing.
Now he gets to the flexible pricing shim-sham. "If
Pennsylvania had been able to obtain Virginia’s lower price – $2.32 less
per bottle – we would have achieved
an additional $2.1 million in
profit on that one product, based on the volume of sales in
Pennsylvania. Or we
could have reduced the retail price, or even a
combination of the two." (emphasis added...for emphasis)
And here it is, nine months later...and Pennsylvania's #1 selling "Bourbon"
hasn't changed price at all. They are keeping
every penny of every negotiated price to the top ten selling wine and liquor brands, all but one: Nikolai vodka pints (the alcoholic's favorite), which have gone down
30 cents. Hey, thanks. Really appreciate it, PLCB.
It's all too clear: the PLCB (owned by YOU, they say) is screwing the citizens on a daily basis, over-charging on numerous items, especially their lottery items. A prime example is the
60% average price increase they charged for this year's Van Winkle releases, and the
extra $570 they charged for the 3 bottle 'package' and the
extra $860 for the 5 bottle 'package' on top of that. Or maybe the extra $100 they charged for the Buffalo Trace Antique Collection? Make no mistake, you as a consumer come in
last in the PLCB's quest for survival. The Chairman even admits it "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."
"Charge what the market will bear" is a
cornerstone principle of the free market, especially on "luxury items" like booze. You can see it in the beer market, for example, where craft beer prices continue to rise mainly because customers continue to pay them (so far). But those prices are
kept in check by the knowledge that
another retailer may sell for less and get the sale.
As a police-enforced monopoly, though, the PLCB can raise prices and
the market -
meaning you and me - has no other choice: we can't go to another retailer (or another state...), we
have to bear it. Bet you didn't know that it was fine for a government agency to gouge you. Imagine if the Turnpike Commission had "flexible tolling." When did things change so that the government would treat you fairly and justly
IF they made enough money from you?
So how will you know if the PLCB is cheating you? You won't, because they don't have to tell you their secret pricing decisions. While they don't have any problem outing Virginia, the PLCB no longer lists the price they paid for their products. The official PLCB excuse is:
"Act 39 of 2016, which became effective in August 2016, granted the PLCB authority to negotiate product acquisition costs with suppliers for the most popular wines and spirits carried in Fine Wine & Good Spirits stores. The goal of these negotiations is twofold: to maximize revenue the PLCB generates for the commonwealth and to offer consumers fair and competitive prices. Subsequently, the PLCB removed product cost and retail price information from Board agendas and minutes in the interest of optimizing supplier negotiations. Additionally, now that the PLCB can act more like a traditional retailer with regard to pricing, it is not in our financial interest to give other alcohol retailers advance notice of our prices and sales."
But a traditional retailer has competition, not a police enforced
monopoly! I'd like to know what other alcohol retailers are they talking about. Do you really think that Mondavi doesn't know what Gallo is
charging, or Buffalo Trace doesn't know what Beam wholesales their
bourbon for? If the PLCB knows what Virginia is paying, don't you
think the distillers have a pretty good idea of what their competition
is doing? I know that competition is a foreign idea to those at the top of the
PLCB, but that is what keeps prices down for everything else
you buy, not allowing some entity to charge whatever they want and then
MAKE you pay for it.
Being the Chairman of the PLCB is the bizarro version of being Harry
Truman, without the ethics or personal responsibility. "The
buck passes here," is that right, Tim? Nothing is ever their fault no matter how
idiotic (wine kiosks), misogynistic (date rape ads), anti-PA business
(Tableleaf et al), anti-consumer (any monopoly is
anti-consumer) or just plain stupid (whatever happened to the PLCB
Savor magazine, and the drink recipes that need things the PLCB
doesn't sell?) Any Chairman claiming any responsibility for any of those
things? Didn't think so, and Mr. Holden is certainly not going to be
the first.
Stop being fooled. The PLCB does not exist for the
benefit of the citizens, it exists for the benefit of the PLCB. Anything
to keep the pigs at the trough is what they are for and anything that
resembles real business with real competition is what they are against.
Starting at the top with the Chairman..
