Wednesday, February 7, 2018

Don't Let Them Fool You

The PLCB just put out their latest Retail Year In Review, patting themselves on the back — again — about how great the State Stores are doing! Yahoo! It's all here! Just don't look too closely at the numbers!

Because if you do look closely, peek under the gloss and sparkles, you can see just how crappy a job they are doing. Let's start with the record sales. Let's see: police controlled monopoly, citizens can't go anywhere else, rising prices, increased population... It would probably take a real marketing genius to have record sales under those conditions. And take a look at those record sales in the hottest market category - American Whiskey: the PLCB's growth there is less than the national average increase in sales. Not just a little less, it is about 30% less. Imagine how much more in taxes would be collected if Pennsylvania was able to match the strongest national trend in booze sales for just that one category.

The PLCB is over $1 BILLION in debt
Of course, our old friend Jack Daniel's isn't forgotten; after years of us saying that it isn't a bourbon, the PLCB in their normal bout of incompetency gets it half right. On page 32, table 19 of the report there is Jack Daniel's Gentleman Jack sitting in the number 10 spot for "bourbon." At least they didn't have JD #7 listed 3 times like they did last year (page 30, Table 19). It is hard to say if they left it out because it isn't bourbon or they just screwed the table up.

To prove they are keeping up with the "modern lifestyle," a whole one tenth of one percent (0.11%) of sales came from the Internet, which is really pathetic in this day and age for a retail company. Pathetic is the key word when talking about the PLCB's technology track record. Can you say "wine kiosk"?

Then there is the problem of saying things to make yourself look good, even when the numbers that you provide don't always match up with reality.  For most of us this is called lying, for the PLCB it's called "how we do business." Let's look at those "increased sales".  First we have the sales for 2015-2016 from the Retail Year In Review.  On page 4 it lists total sales of $2,303,405,801. On page 5 it lists sales by month and transaction; it doesn't total them up, but have no fear, I did it for you.

Notice that the total is about $23.5 million different. The PLCB doesn't say why, and apparently we don't deserve an explanation.

The next table is for the year 2016-17. Again, the monthly sales in total don't match the total listed by the PLCB on page 4 of the current Retail Year In Review ($2,443,725,791). Only this time, it is $76.5 million that has disappeared. Remember, as the owners of this mess this is our money, and I'd like to know where that $76.5 million is.


Here you'll see that the number of transactions was fairly flat, increasing only by 0.91%, while sales dollars went up 3.8%. What this tells us is that the citizens bought 1% more often, but it cost them 3.8% more each time, well above the inflation rate of 2.1%

Retail alcohol is one of the few major sales items where the individual product is elastic (in economic terms, this means that a small change in price can mean a large change in sales), because there are so many suitable substitutes. If your favorite vodka goes up, you can easily find another at a price you are more comfortable paying. The industry as a whole, though, is inelastic, meaning that people are going to pay for some form of the product no matter what the price changes to. The PLCB knows this (probably because they hired somebody to explain it to them), so they will increase prices and not have it affect overall sales that much, if at all. They are doing that right now, through the old variable pricing trick they foisted upon the public (and the gullible Legislature).

So now that you have real numbers in front of you, you have to ask where the PLCB came up with an "average statewide increase of 6.10%", when the numbers they give us don't match? What numbers are we supposed to believe Table 4 or Table 5? And why should be believe anything the PLCB tells us, given their history of anti-consumer behavior, their predisposition to screwing us? Why aren't they capable of making the sales numbers match on their own damn report? As far as that goes, why, in this age of almost instant information access does it take them six months to put this report out? Find another $2 billion business that takes that long...go ahead, I'll wait.

Face it, the PLCB does NOTHING for the citizens except cost them more in the long run. Remember: they are a BILLION dollars in debt and it isn't getting any smaller.

Privatize.

Monday, January 22, 2018

A closer look at the PLCB Cash Cow

The PLCB and the UFCW (the State Store clerks' union) have always fed the public (and the Legislature) a big lie about the PLCB Cash Cow. They make it sound like their bulging bovine is comprised of nothing but filet mignon, and shits millions into the General Fund.
What they want you to think
However, the Federal Government doesn't think so and with new accounting rules in effect, the real value of the PLCB is more starkly in focus. Remember a couple years ago, when pension debt was required to be included in the annual report, showing that the incompetents in Harrisburg were really $240 million in debt? Now other benefits besides just pensions have to be taken into account, and it turns out that the PLCB is OVER A BILLION BUCKS IN DEBT. with total liabilities of over $1.7 billion! Yup, billion.  With a 'B.'*

Let me say that again. The agency that has been stealing from the public and short-changing the clerks the benefits it promised (which it could never afford to begin with) for over 80 years, while telling us all that it makes money...is over A BILLION DOLLARS in debt.

Don't believe me?  Why not ask the PLCB themselves? Here's the minutes from their December 6th meeting; take a look at page 9.
The reality of 80 years of lies.
What does it mean? It means that even with stealing more from you with "flexible pricing," even after screwing us with rising prices just because they want to, even after cheating us out of the discounts given by the suppliers, even after purposely working against PA businesses with imported house brands...they still need more...a lot more. The lying political hack they call a Chairman could barely keep a straight face when he told this whopper: "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." 

Looking at page 10 of the minutes you can see that for October they claim a profit (Change in net position) of $8,623,941. That means that if they didn't do anything else besides pay down debt, it would take ten years just to break even for the debt due today. Of course, they would be accruing more debt, new debt during those same 10 years. This is a Ponzi scheme worthy of Bernie Madoff. No wonder they worked so hard trying to get the Governor's borrowing plan into place. It would further obligate the citizens into paying off their debts and for the next 20 years keep the people who care about limited government and fair treatment for the citizenry at bay.

What does it take to be rid of them? How incompetent do they have to be? How anti-consumer will they get trying to pay off what they owe? You know where this money has to come from, don't you? I got a hint: the wallet of someone you know really, really well.

Can we afford to keep the PLCB's cash cow? Are state stores worth it? 3,500 clerks should not hold hostage a state of 12 million people. Privatize.


(*) Now $1.8 Billion in liabilities for January)