How much did they steal from you this year?

It's that (belated) time of year, time for the PLCB to tell us what a wonderful job they are doing and what a swell place to work they have. Their Annual Report is out (you can download the PDF document here), and the truth is in there; we just have to root it out. 

We say it's "that time of year," but it's not, actually, because the annual report took a ludicrous four months to come out...again. Last time it took four months they said, "Ohh, there were special considerations with the new tax code." No new tax code this year, and they didn't bother with a new excuse. What's the point: it's all lies anyway.

Onward! Right on page 2 there's a mission statement (emphasis added):

The mission of the Pennsylvania Liquor Control Board is to responsibly sell wine and spirits as a retailer and wholesaler, regulate Pennsylvania’s alcohol industry, promote alcohol education and social responsibility and maximize financial returns for the benefit of all Pennsylvanians.

Funny how the part about maximizing revenue isn't in the liquor code. Just as well, since based on the available statistics they aren't doing a very good job on the stuff that is, like alcohol education or social responsibility; at least, not compared to states on our border. Their own report on these outcomes shows that students who consumed alcohol in the past year went up from 81.4% to 83%  After 85 years of the PLCB, 85 years of CONTROL FAILURE...maybe it is time to try a different system. Any normal business wouldn't survive 85 years of failure.

What have they done to us lately? After record sales (and record variably-priced screwing us) PLCB liabilities went down $2.03 million on over $1.1 billion dollars of debt. A payback rate of over 500 years, and getting worse. It was "only" 400 years previously. For some reason they don't report that number. Another interesting part of their financial reporting is that they say, on five pages in a row, that "The accompanying notes are an integral part of these statements." And then don't list what any of the accompanying notes are. They aren't going to verify what they are saying; just believe them, because they have such a great track record of telling the truth.

Another thing they don't tell us is that while variable pricing was supposed to be a partnership where the public was supposed to receive some benefit, we don't know what the benefit is in dollar terms. We can look at past financial statements and see that the PLCB is making almost double what it used to. That's almost all because of lower acquisition costs, but where is the share that the public was supposed to get?  We may have seen a 2% reduction in prices, and even that might be high. For every extra $100 they make, we are probably lucky to see a $2 reduction, spread across a number of products. Even then the PLCB still screws us, because of their rounding formula. Rounding is not considered part of "mark-up," so they can hide that from us, just like they hid what the mark-ups actually are now.

It all goes back to the total lack of leadership and experience of those at the top. They are never held responsible for the lack of progress under their leadership, so the status quo, or even a slip in the status quo, is the norm. On the business side it is even worse. I can understand hiring political hacks if you don't want things to improve in a structured order. But when you've got a failed congressman, a political chief of staff, and a furniture company exec it doesn't seem to be the path to a successful liquor business. In 85 years there hasn't been a Yuengling or Jacquin's executive, or someone from a wine wholesaler or spirits importer, who was qualified and wanted to do the job...really?

When you think about this, keep in mind this quote from the Joint session of the House Liquor Control Committee and the Senate Law & Justice Committee of 2017 (adjusted a bit for truth):

SENATOR MCILHINNEY (former Chairman Senate L&J Committee, since retired): "... the state citizens own this system, and they should be able to get some...benefit by having a good  deal when they go to the liquor store."

MR. HOLDEN (Chairman: Liquor Control Board) : "Absolutely Absolutely not."

There, I fixed it for you, Tim.

Let's Sum Up: the last nine years

It's not exactly nine years since I started this blog, but it's close enough, considering where we are. Seemed like a good time to take stock.

There was a lot of sturm und drang in the first seven years, "Told by an idiot, full of sound and fury, Signifying nothing." The idiots in this case, of course, were the Republican members of the Pennsylvania Senate, led by the surprisingly obstructionist Senator Chuck McIlhinney (R-10), who managed to consistently thwart a clear majority for liquor privatization in the House, led by Speaker Mike Turzai.

Me and King Dork

Whatever the reason, McIlhinney worked with the Democrats (de facto, if not actual hand-in-glove) to keep a solid privatization bill from being laid on Governor Tom Corbett's desk. Corbett would most definitely have signed it, too. McIlhinney knew that, so he never gave him the chance. Could Corbett have been re-elected if he'd been able to deliver liquor privatization? Maybe, and then we'd be in the middle of four more years of King Log, instead of the current ham-handed reign of King Dork, but it's impossible to know.

Then came the election in 2014, and things changed, in a strange way. The GOP increased their legislative majority, but the party's abandonment of Tom "One Term Tommy" Corbett made that less useful by giving us Tom "One Term Tommy" Wolf (I really want "One Term Tommy" to become a Pennsylvania colloquialism for any Governor who fails to win a second term, no matter what their first name actually is). That upset the balance, but once the long budget logjam finally broke (a nasty defeat for King Dork), suddenly things happened.

Lurking in the background; why is
he still allowed to drink in PA?

Bang! We got takeout wine sales at licensees (right, not at groceries or convenience stores, just ones with tavern licenses, and with the stupid "cafe" requirement, and a limit of four bottles, and it's gotta cost the same or more as the State Stores, and the PLCB is still the wholesaler, and of course no spirits sales), we got direct wine shipment (only from wineries, no out of state retailers or importers, and again limits), more stores open on Sundays...whoopee...and we got a surprising little grab bag of other kind of neat stuff like looser cider and mead regulation...none of which really affected the state's retail/wholesale monopoly. And of course, we also got flexible pricing, the gleaming hook inside all the colorful lure of the rest of it.

They were, unfortunately, almost all things that McIlhinney wanted. Why does this man, this second-rate hack from Bucks County who's in a variety of pockets, get to rule over the liquor reform we've wanted for decades? The GOP put him there, and continues to leave him there, despite the way he thumbs his nose at the House majority and the Speaker on these issues.

Yep: you can get the whole thing, or just one bottle.

Ye gods and little fishes. Of course, we also, finally, cross it off the list, saw an end to the much-hated Case Law. Which was awesome, and great, and all that...except of course that the Case Law's evil twin, the Two Sixpack Law that afflicts bars, restaurants, and grocery stores is still firmly in place. And I have to admit, I'm not sure if it applies across types; if I went into the State College Wegmans, could I get two sixpacks and four bottles of wine? Mind blown.

The sad thing is how excited we all are about this. We're whooping it up -- the Case Law is dead! We kin buy us wine at the Giant Eagle! -- so much that we don't even notice how sad it still is.

1. We still aren't even up to "normal," let alone "world class." New Hampshire is still better off: lower prices, better State Store System (much much better), and wine in stores all over the place; New Jersey is much better off, Maryland, Delaware...we're finally a step ahead of Utah, and that's cause for celebration? 
2. Spirits haven't changed a bit, except for the flexible pricing that will soon be costing us more.
3. And worst of all: the half-assed way that we finally were allowed to buy beer and wine at grocery stores -- by letting them buy one of the restricted number of tavern/restaurant licenses -- is causing the price of those licenses to skyrocket, as I warned here (I've warned about this for years). Over $500,000 for a liquor license, just for the piece of paper, so a Giant Market can sell sixpacks? That's putting small independent grocers out of the game (and likely out of business), and making it too expensive for restaurants to have a bar. Hope you like BYOB.

The Case Law is dead, and that's definitely progress. The changes for off-site and cross-license sales for Pennsylvania breweries/distilleries/wineries/cideries/meaderies are a tremendous opportunity (one the State Stores surely weren't delivering). And the 'zombie license' auction, even though it transparently benefits chain stores and the PLCB over everyone else, does, at least, free up some more licenses.

But we still have a long, long way to go.
We're not done till there's whiskey in private stores.
We're not done till they don't need a "cafe" to sell booze.
We're not done till the state's out of the retail and wholesale booze business.
We're not done till this whole thing gets sorted out.

And when we're done...what happens to the guys who got us through this stupid period? The GREAT sixpack shop owners and managers, the GREAT owners and managers of the exceptional beer distributors? You know, the folks who will now own a largely worthless business, as supermarkets and convenience stores undercut them relentlessly on prices, while inevitably shrinking selection (not completely, maybe, but it's never going to be their focus)?

What happens to all those State Store System employees, a significant number of which do a decent job at the register, and some of whom honestly do have a passion for what they're doing? Do they find new jobs? Do they open liquor stores?

What happens when the Legislature finally gets its gumption up and puts a real stake through the heart of this zombie relic of Repeal?

What then? WHAT THEN?

Gun it! The Finish Line is in sight!

I don't know. But specialist booze emporiums do survive and thrive in states where supermarkets sell booze. So they can work here, once we get to that point.

So let's get going, let's keep going, and get this done. Don't slow down, don't listen to the last ditchers who will tell you "We have to give these changes a chance to work out!" No, actually, we don't. We can admit that they were a compromise that didn't need to be made. The time to change this is now, before we have another entrenched set of entitlements.

We've got the momentum. Let's finish this.

The Dam's Breaking!

Hot news out of Harrisburg: a bill loosening rules on wine sales has passed both houses of the General Assembly (passed by the Senate back in December; the House Rules Committee brought it up, passed it, and sent it to the floor all this morning, and the House passed it early this afternoon) and is on its way to the Governor's desk. The bill -- a creation of Senator McIlhinney's -- does not eliminate the State Stores or the wholesale monopoly, but it does allow licensees to sell up to four bottles of wine for takeaway, including of course the licensees that are supermarkets and gas stations. The bill passed with bipartisan support in both the committee and the full House (two Democratic Senators voted for it in December).

Stealth bill, zooming under the UFCW radar!

Governor Wolf released a statement on the bill's prognosis:

"Today the House concurred with the Senate on historic liquor modernization legislation that provides greater customer convenience to the people of Pennsylvania. As I have always said, my goal is to modernize the sale of liquor and beer in Pennsylvania to ensure convenience and satisfaction for customers. Once the bill reaches my desk, I will conduct a final review of the legislation to ensure it meets my goals of enhancing the customer experience, increasing much-needed revenue to help balance our budget, and bringing our wine and spirits system into the 21st century."

So...maybe, maybe not, but it's going to be hard for him to veto a bill that passed with significant Democratic support that doesn't actually privatize the State Stores or the wholesale system. What it does do is potentially take a LOT of sales away from the State Stores, and UFCW Local 1776's Wendell W. "President For Life" Young IV knows it. "This is the first step to killing the Pennsylvania Liquor Control Board and the Republicans know it," Young said.

It's a wobbly step, a baby step, and a head-shakingly stupid step that recapitulates the useless mistake of the case law...but it is a step. The State Stores will be in deep crap from competition, and things will get worse, especially as people want more convenience. They're going to be irked that they still have to go to the stinky old State Store to buy liquor; they're going to be irked by the stupid four-bottle rule; and they're going to be angry and confused that they can't buy booze at every supermarket and gas station. And that's what's going to break the dam. Finally. The end may be in sight.

Privatize, don't modernize.

Chuck McIlhinney gives it to us again

Senator Chuck McIlhinney, the current Chairman of the Senate Law and Justice Committee (the Senate committee responsible for liquor laws, among others), again proves that there isn't a law he won't muck up. As far as any "Justice" for the citizens goes, the very idea eludes him.

He has not only sent the "National Event License" bill (HB 1196) out of his committee to the full Senate (which then immediately approved it by a shameful 50-0 vote), he braggingly explained it to reporters like this: "Bring your booze, have it at your party, enjoy yourself responsibly, and then go home." (This ignores the fact that ordinary Pennsylvanians have not been allowed to do that for well over 50 years.) Having proven time after time that he doesn't have the stones to admit that the Pennsylvania liquor monopoly is a joke nationwide, he instead tries to hide the abomination we all have to live and deal with by doing special favors, bending the rules for political reasons. 

I live by these words....you should too.

When you start treating those who govern differently than those they govern, there is a problem. It's called entitlement. And it's not so much that he thinks he and his fellow politicians are entitled but that the almost 13 million citizens of the Commonwealth aren't. That we don't deserve to be freed from the idiocy of the PLCB and their little fiefdom of incompetence, but that those who in some way, some how, can or may give him an imaginary pat on the back or "contribution," shouldn't have their party spoiled by the state monopoly's crap booze selection and non-existent licensee service.

Or in his words "....we're not going to put it in our liquor stores for four days and then sell it to them and then have to be stuck with it" Except that if it isn't in the stores now it has to be ordered by SLO, which means that it is at least half paid for already! The PLCB won't be "stuck" with anything since they have half the money already and still can sell the product.  What kind of idiot in charge of PLCB legislation doesn't know how the PLCB works?


If screwing the public out of private liquor and wine sales with his propaganda show-trial "public hearings"* wasn't bad enough, he now thinks that flaunting his incredibly bad decision-making is something the public wants to see and hear about. Is Chuck a  tool of anti-privatization? A tool of the beer distributors? A secret tool of the Democrats? Or maybe...just a tool.

We need less unfair Law and a lot more Justice from you and your committee, Senator.



*Which strangely enough, didn't have any members of the actual public involved.  No citizens that didn't have interest groups or businesses behind them were invited, and only a token few of those that were in favor of privatization, even though we comprise a majority of the people.

Quick, Clean Up Those Liquor Laws: The Neighbors Are Visiting!

5-20-2016: This piece has been updated after a full reading of the bill as released by Sen. McIlhinney's committee and subsequently swiftly approved 50-0 by the Senate. Updates are italicized; deleted words are struck out.


This headline in Tuesday's Inquirer caught my eye this morning:

Pa. May Ease Liquor Rules For Democratic Convention

Here's the piece, describing likely temporary changes in The Almighty Liquor Code for the duration of the Democratic National Convention in Philadelphia later this summer.

Short version: the Legislature feels politicians' pain, but not yours.

"C" is for "Cheat"

Less-short-but-still-short version: Bars can stay open past 2 AM while the convention's in session — four whole days — if they are granted a special license, which costs $5,000, and is only available for events directly related to the convention (What's odd: it's not clear if the event license applies to individual licensees, or the event premises, or wherever the "national event" decides to serve booze). Even more galling: for that time period only, these special licensees will be able to buy receive booze directly from out of state for those four days, unlike you...ever! This is so state delegations can get their favorite hometown booze (Washington State wines, Maine craft spirits), recognizing that (as our old pal, Senator Chuck McIlhinney, who passed the House bill out of committee, put it) "we're not going to put it in our liquor stores for four days and then sell it to them and then have to be stuck with it." Well...probably sounded good to him at the time. What Chuck probably meant to say was that it would be unreasonable to expect the clerks to have to deal with a bunch of interesting new products, so let's arbitrarily bend the law instead. Right, Chuck? That's what you do over in the Law & Justice Committee, after all.

Our version: Someone in the Legislature got a rush of blood to the brain and realized that conventions run on booze -- they do, even the Democrats, and don't even start on the whole weed thing -- and that our booze laws suck so bad that it could hurt future convention business...no, wait, if that was it, they'd make these changes permanent for Philadelphia and Pittsburgh, because that's true for every convention, not just political ones.

No, this is, as usual, about different rules for the ruling class, and charging you to pay for them. Because if you think that the bars who get those special licenses are going to pay for them in four days, or even try to pay them off in four days, you're dreaming. You'll be paying for them. Lucky you. (Okay, what's likely to happen is that some deal will be struck that the licenses are paid for as part of the venue payment, or covered by the donations of free booze.) And if the licensees are smart, they're going to stock up like mad during those four days, get Total Wine to ship in truckloads of booze to beat the PLCB like a gong. There is no limit on how much booze can be brought in, either. In the words of the bill as it stands, the licensees may "ACCEPT, IMPORT, POSSESS OR RESELL 
DONATED ALCOHOL ACQUIRED FROM LICENSED AND UNLICENSED ENTITIES SO LONG AS IT RECEIVES BOARD APPROVAL PRIOR TO DOING SO. THE DONATED ALCOHOL DOES NOT NEED TO COME TO REST AT A PENNSYLVANIA LIQUOR STORE PRIOR TO ITS USE BY THE PERMIT HOLDER, UNLESS THE  BOARD SO DIRECTS. MALT OR BREWED BEVERAGES DONATED UNDER THIS SECTION SHALL NOT NEED TO COME TO REST AT A LICENSED IMPORTING DISTRIBUTOR PRIOR TO THEIR USE BY THE PERMIT HOLDER, SO LONG AS
THE DONATED BRANDS ARE REGISTERED WITH THE BOARD AND THE BOARD APPROVES THE ARRANGEMENT." Note that this kind of arrangement would be exactly the kind of thing that could normally cause a licensee to be fined, possibly even lose their license.

Is that even how the law would work? Who knows, because McIlhinney had his fingers all over it, so it's likely to be something completely novel that no one asked for or wanted. Would you pay $5,000 for the "right" to be open from 2 AM to 4 AM for four days? For a bunch of drunken strangers? (On the other hand, would you pay $5,000 for the "right" to buy booze from regular wholesalers, rather than the PLCB? Just for the novelty of someone delivering the booze to you for a change? Hey, maybe!)

Leave out the longer hours, which is window-dressing: all they'd have to do to achieve this is to tell the BLCE to stay away from Philadelphia and give the bars the high sign. This is nothing more or less than an admission that the PLCB can't deliver what wholesalers and retailers in other states do routinely: put new products on the shelves (not in some airy-fairy "online store" that no one can search properly) in a timely manner by delivering them directly to bars. An admission that the state's booze monopoly is a failed, broken system that can't do what business needs.

If it needs to be fixed for four days...it needs to be fixed for good. And we know the way to fix it. The Inquirer knows, too. They ran this editorial on May 20: have a look. The House GOP caucus should belatedly redeem themselves by refusing to pass this deeply cynical bill. Failing that, the Governor should veto this unabashed deal-making. And if they don't, we the people should raise hell.

Privatize it. The time is now. 

Beer in Supermarkets: the Down Side

Giant Market plans to sell beer at their Stone Mill Plaza store in Lancaster County!

Weis Market opens beer cafe in Mechanicsburg!

Yeah, really, beer in Da Grocery Store in Da Commonwealth!!!!

Is this great? Or is it pathetic?

I asked that question seven years ago, when I first bought a beer at a Pennsylvania supermarket. It's high time that the question was asked again, because things are accelerating. We're seeing more and more big supermarkets adding "beer cafes" and selling sixpacks, and there are going to be consequences; we need to look ahead at what may happen and consider action to head it off.

It's a simple problem. It's great that Pennsylvania supermarkets have figured out a way to sell beer, a workaround that involves sacrificing part of their building to create a "cafe" where people could have a beer if they really wanted to (but mostly don't, with a few cool exceptions where the idea's been embraced) and buying a tavern license, which can be wicked expensive (check by county; hello, Chester!). But clearly the big chain supermarkets -- Giant, Wegmans, Weis, Whole Foods, Giant Eagle -- have found that the profit is worth the cost, because it seems like a month doesn't go by without another opening.

Why is that a problem? A few things. First, Pennsylvania has a "quota system" for liquor licenses: one per 3,000 people in a county. It's essentially a broken system, as it's never really kept up with population shifts, and there are a ton of "grandfathered" licenses in counties that have lost population, and there are a number of exceptions (The Almighty Liquor Code has a silly number of kinds of licenses), but essentially, there are no new tavern licenses being issued. If you want a liquor license, you have to buy one on the open market, because the Legislature foolishly made them transferable and salable. I say "foolishly" because when a liquor license -- a piece of paper issued by the State with no intrinsic value except what the State-enforced "quota system" has given it -- is sold in Chester County, for instance, for $270,000, the State gets next to nothing. Even though the full value of that license only exists because of State law. Yeah, I call that foolish.

That's a problem, because every time a supermarket simply wants to sell beer, it buys up another of these limited licenses, which then become more scarce, and therefore more expensive if you want to buy one to open an actual bar, tavern, brewpub (you need a license to sell anything other than your own beer or Pennsylvania wines at a brewpub), or restaurant. As licenses get more expensive, you get more chain restaurants and fewer independent operators opening (because they don't have the deep pockets); you get more nuisance bars (because they have to sell more booze to make their loan payment), and you get more high-end places with expensive booze (which isn't bad in and of itself, but if the ratio is unbalanced, people have fewer choices).

Another part of the problem is that it creates two tiers of grocery stores: the ones with beer and the ones without. I recognize that some grocery stores don't want to sell beer; especially in rural Pennsylvania, where there are some family-owned places that simply don't hold with alcohol at all. Fine, no reason to force stores to sell beer, but there are stores that would like to and simply can't afford the ridiculous unnecessary expense of buying a tavern license and tying up a substantial amount of retail space and equipment in a "cafe" with separate beer cashiers.

This was brought up at the McIlhinney Hearings in 2013, by a representative from Redner's Warehouse Markets, and Senator McIlhinney's response was essentially 'that's nice, but that ain't gonna happen.' Since then, there have been attempts to come up with a separate license for grocery store sales (of course, another type of license is exactly what we need!), none of which went anywhere. Given the tenacious opposition of the beer distributors to any expansion of grocery store beer sales (and the likely opposition of the already-licensed groceries), I doubt this will fly, and...

That is going to mean we'll have this half-assed workaround forever. The stores that got a liquor license won't be happy with anything that devalues that major investment, so they'll be fighting it. And Pennsylvanians are pathetically grateful for anything that even looks like buying beer in grocery stores (and having a liquor license actually puts the stores one tiny step away from selling wine, as there's already been a push to allow taverns to sell "to-go" bottles of wine), so if we think we have it, we're not going to push for it; we're just going to go to the stores that sell beer. That means that more and more supermarkets are going to go after tavern licenses, which is going to accelerate the scarcity issue (more chains and more nuisance bars!), and put even more pressure on the family-owned supermarkets to sell or close.

Well, hello, unintended consequences!

More crappy nuisance bars. Friendly neighborhood bars will sell their licenses at top dollar while they can, and the families will retire. And we get further away from a REAL solution to the problem.

This is yet another fine mess the PLCB and the Legislature have gotten us into, with the help of the MBDA and the behind-the-scenes maneuvering of Bucks County beer mogul (and SEPTA Board and Turnpike Commission member; and did you know he also owns 4% of the Sands Casino?) Pat Deon. Please note that I do NOT blame the supermarkets; they're just playing the hand that was dealt to them, and playing it well.

The only solution to Pennsylvania's alcohol beverage sales quagmire is going to be an all-alcohol solution, some grand bargain that fixes everything. More on that to come.

Liquor Privatization's Enemy #1: Senator Charles McIlhinney

Three times in three years a reasonably effective liquor privatization bill passed the PA House (it also came close in 2014, but got sidetracked as GOP legislators scurried to distance themselves from Governor Corbett's sinking reelection ship). That's something that never happened before in the 80-odd years since the PLCB was established, despite decades of polls that consistently showed that was what Pennsylvanians wanted. But thanks to the solid support and unfailing energy of Representative Mike Turzai, the House Majority Leader and now Speaker, it finally happened, and it was historic.

One of those bills also passed the Senate, but it was a sacrificial lamb, vetoed by Governor Tom "I Love Me Some PLCB" Wolf. But the other two were shot down in the Senate, practically single-handedly, by Senator Charles "Chuck" McIlhinney, the Republican who represents the 10th District in northern Bucks County...curiously, the same district that gave us Joe "Water Heater" Conti, better known to readers of the blog as Joe Da CEO, the former "CEO" of the PLCB who resigned three years ago while under investigation for ethics issues (an investigation that may still be going on under the eye of a federal grand jury). There must be something innately pro-PLCB about that area.

The first time the privatization bill passed the House, in 2013, McIlhinney held a press conference as soon as it happened -- in mid-March -- and announced that the Law & Justice Committee (his committee; he was and still is the majority chairman) would be holding hearings on liquor privatization. He had three months, and the hearings -- stacked with anti-privatization speakers, a circus of shouting and intimidation -- were shoved into the last part of that, after which McIlhinney held everything up on his committee until he presented his version of the bill.

Then I simply took the House language and burned it. With fire.

In a legislative move known as "gut and replace," McIlhinney replaced the House's bill in its entirety with his own scheme, a mishmash of State Store clerks' union-proposed "modernization" measures (that are blatantly anti-consumer), beer distributor pipe dreams, and his own plan for selling wine by the bottle (but only four bottles at a time) at taverns and restaurants, a plan no one asked for and no one wanted. The committee got that a week before the session was over. It never even came to a vote.

The second time, in 2015, the House passed another privatization bill. Knowing that Governor Tom "Look For The Union Label" Wolf would veto a solid liquor privatization bill in the first pass -- he'd said so, promised it -- McIlhinney waved it through, the Senate passed it, and sure enough: Wolf vetoed it, along with the proposed budget.

And now? We still have no budget, but McIlhinney's still at work. The House passed another privatization bill in December, part of their negotiation strategy with the Governor, and this time, McIlhinney went to work on it...making it look a LOT like the bill he shoved out in 2013, complete with no change to the state wholesale monopoly, nebulous talk about selling wine at grocery stores that had bought an R-license and were selling beer, and plenty of anti-consumer "modernization" language (including "flexible pricing," which essentially gives the PLCB the green light to raise prices to cover their ballooning operating expenses). It's what we've been calling The Big Step Sideways. It's not anything the House was going to pass when it comes back for reconciliation, and he knew it, and now liquor privatization has apparently been dropped from the negotiations. Chances are slim that it will come up this year; an election year. (Which is foolish: no legislator is going to lose their seat over how they vote on liquor privatization.)

Go ahead. Ask me "Why?" again. I love that.

McIlhinney, you've done it again. Which leads us to ask...why? As in Why does McIlhinney so doggedly and effectively thwart privatization efforts? He's a Republican, isn't he? Aren't they supposedly the party of business, of smaller government? Well...maybe. But there's pro-business, and then there's pro particular businesses; like this. And then there's the personal politics of the whole thing, like this. (It's worth noting that some pundits tag the beer magnate noted in those links, Pasquale "Pat" Deon," as the reason we didn't see a privatization bill pass the House in 2012). And then there's this winking tidbit about Pennsylvania politics: Unions buy Democrats; they rent Republicans.

But another why is this one: Why does the state Republican party continue to put up with McIlhinney's shenanigans on this issue, and indeed, why is he in the one spot, the chairmanship of Law & Justice, where he can effectively, single-handedly, block privatization? Is it true what the unions have consistently said, what the Democrats have consistently said? That the state GOP doesn't really want privatization, that it's too good an issue to run on, to get donations with, and to pass it would kill that cash source? The thing is, for that to be true, it would all hinge on...Chuck McIlhinney.

Progress

In 1933...this was what you drove:

In 1933...this was how you washed clothes:

In 1933...your phone was only as smart as the operator:

In 2015...this is still how Pennsylvania sells liquor:

1933: brought to you by Pennsylvania's Democratic legislators, assisted by The Senate Republicans of SouthEast Pennsylvania, cheered on (and funded) by the UFCW. Ain't it great to buy booze like Great-Grampa did?

What's So Modern About "Modernization"?

The main alternatives to liquor normalization*, as proposed by HB466, are doing nothing...and "modernization." The Senate GOP got their chance at "doing nothing" two years ago when they torpedoed the House's last normalization bill. Now the other one's getting an outing; but just how modern is "modernization"? Let's find out:

The Democrats are in a full court press against liquor normalization, from Governor Wolf -- "I will veto the bill if it reaches my desk in its current form." -- to Representative Costa -- who puts his faith in the Governor's veto and one nebulous "modernization" plan -- down to little Democrat wanna-be Gene DiGirolamo, the Republican representative from lower Bucks County, who's been pathetically peddling his own "modernization" bill for two years, with no serious takers.

It's too little too late for the House: HB466 swiftly passed with a 114-87 vote on party lines (with four spineless Republicans deserting their party). The Democrats and their union foot-soldiers see the writing on the wall, the writing that says "30-20 Republican Senate majority," and they're nervous. They're talking tough, but they're relying completely on two things at this point: the past (and unexplained) reluctance of Senator Chuck McIlhinney (R-Bucks) to let a normalization bill out of his Law and Justice Committee, and the Governor's stated readiness to veto a bill..."in its current form" (emphasis added to a word that gives him some wiggle room).

If the governor full-out vetoes a passed bill, the Republicans on their own don't have the votes for an override, and they won't get any Democrats to go with them. That just won't happen. So it's possible the Governor offers a deal to get what he wants, and part of that deal may involve either open debate of the "modernization plan, wherever that may go, or incorporation of some of the modernization ideas into a watered-down normalization bill.

That begs the question: what do the Democrats (and little Gene) mean by "modernization"?

As you might expect from the crew backing the State Store System, it's a retro kind of "modernization." Here's what the plans offer.

Sunday sales -- Expand Sunday sales to all State Stores, and extend the Sunday closing time from 5:00 to 10:00 although the majority of stores close at 9:00 other days. Hmmm, let's see...so what? First, there are already over 150 stores open on Sunday, and they're in the most heavily populated areas, so not a huge impact. Second, and just to be petty: does this include the stores in places like Snow Shoe, and Clymer, and Knox that are only open three days a week now? The sad thing about this? It's the most directly consumer-friendly part of the whole "modernization" proposal.

Direct shipment of wine -- Kinda depends on what you mean. Do you mean that wineries and importers would be able to ship directly to you? Or directly to the State Store of your choice? (Wow, so convenient!) Because it depends on which Democrat you talk to. And keep in mind that they want the wineries to pay a hefty fee and do a ton of paperwork to support it and to tell them who bought what and how much; there's a limit of 9 liters/12 bottles a year (one case and you're done). Then you'll have to pay shipping, and...this really only affects a small number of high-end wine buyers. This one sounds good, but it's going to be bait-and-switch.

Wine and beer sales in grocery stores; cafe licenses and "store-in-store" -- A proposal to expand wine sales to grocery stores that have bought an R license to sell beer (with the stipulations that they must open a 30 seat cafe and ring up the booze separately from any food purchases...and limits on how many bottles they can sell at one time). This is not modernization, it's something the stores thought up, and are paying through the nose for because the state won't adjust the Almighty Liquor Code to allow it to happen without buying up an expensive bar license. (No one's said whether regular taverns will be able to sell wine, either.) If they DO expand the Code to allow wine sales by the bottle, they will make sure that the price isn't competitive with the State Stores. Count on that.
Then there's the bright idea to expand the "store-in-store" program, which puts a State Store under the same roof as the grocery store. Well, hooray. Fact is, "store-in-store" has been available since 1981, and since the big co-location push began in 2003 most supermarkets just aren't interested (read the sad story here). Bringing it up only sounds new because very few Pennsylvanians have ever seen one of these sorry things, or realized that it was particularly convenient when they did; after all, it's just a State Store that has a door that opens into a supermarket. Then there's DiGirolamo's idea, which is to put a free-standing 400 square foot "mini-State Store" with a limited selection of wine in grocery stores. It sounds like a wine kiosk, only there's always a clerk there, not just when it breaks down...well, okay, you're right, that was pretty much always. This isn't modernization, this isn't even a new idea. It's an old idea that already hasn't worked.

Extended hours -- First they tell us when private stores come in, people can buy booze at all hours of the night, and that leads to crime. Now they tell us they want to stay open later. You figure it out.

Sen. Costa illustrates how much prices could be increased
(or maybe he's ordering a Subway foot-long)

Price flexibility -- This is beautiful. Currently, the State Stores work on a regulated markup: every price is set to go up by 30% of the wholesale price (plus taxes and fees). They want to change this to allow the State Stores to set the margins as they see fit, "up or down," on different products. Given that the System's operating costs just keep increasing as a percentage of total revenue, how long will it be before all the margins are going up? (Keep in mind, increasing the overall margin was suggested to the Board as a way to "counter higher expenses" just last year by the PLCB's finance director.) Consumer-friendly? This is PLCB-friendly, it does nothing for you.

"Upgraded procurement guidelines" -- What does this even mean? Do you think it will be good for you? Do you think it's modern?

Personnel hiring outside the Civil Service system -- Yeah, that's modernization: the Civil Service rules are the only thing keeping the PLCB from being a complete patronage pit. They say they need it to hire people who know wines and spirits and promote people for product knowledge (then on another day, they'll insist that all of their employees are already wine experts and highly trained).

Increased licensing fees -- Charge bars and restaurants and beer distributors more to sell booze on the license they already have; charge them more to sell six-packs, charge them more to be open on Sunday, charge them more to sell both wine and beer. This isn't any kind of 'modernization,' this is charging everyone more for drinks in order to cover the PLCB's steadily increasing operating expenses.

Customer loyalty programs -- Because everyone has been asking for coupons and a PLCB "shoppers card." Haven't you asked for that? Isn't that modern?

Expedited review of leases -- Right. So they can move the stores around more without any input from the local community. More top-down Soviet-style planned economy crap. That's not "modern," that's 1950s-era thinking.

Enter into a buying consortium with other control states -- To lower prices. Really? If they get this and the price flexibility, they'll pay less to producers, they'll charge us the same amount as before or more, and -- you got it -- their operating costs will keep going up. And will selection improve? Never.

Self-service lottery ticket sales in State Stores -- This isn't "modernization." This is simply taking lottery sales and fees away from actual businesses, supermarkets and convenience stores. Next they'll want to sell snacks and cigarettes. The State Store bureaucracy apparently just doesn't like independent businesses. (They don't really like you, either; State Store employees refer to you as a "chronic alcohol user." Did you know that?)

That's it? That's "modernization"? Yup. Does it address the real concerns? No. There is:

• Nothing about more stores than the current bizarrely low number of about 610, when the average for a state our size and population would be, at the least, over 2,400 (but those increased operating costs mean more stores would utterly bankrupt the system)
• nothing about better selection in the stores (because they don't even know how to sell what they already have)
• nothing about taking down the insulting police-enforced monopoly that makes buying a bottle of wine in New Jersey a crime (there's been talk recently, sure, but the Legislature's been talking about getting rid of the case law for over 20 years)
• nothing about delivery to licensees (did you know that? Bars and restaurants have to go to the PLCB to pick up their booze, because the state agency can't be bothered to deliver it. Good thing, probably, because the increased operating costs would be huge! Forget the fact that private beer wholesalers somehow manage to do it...)
• nothing about breaking the case law (because they don't want to upset the beer business, which has been such a friend to them by killing normalization in 2012 UPDATE: Senator Brewster's latest modernization plan DOES contain language about lowering the case limit. You'll have to buy his whole bill to get it...)
• nothing about allowing any supermarket to sell wine and beer (without buying a scarce tavern license and adding a "cafe", something small family-owned stores simply can't afford to do)
• nothing about beer sales at convenience stores, drug stores, gas stations (that's so scary)
• nothing about how to even get this crappy system up to the level of New Hampshire's control stores
• nothing about fixing our crappy booze tax system (which currently makes cheap booze cheaper and expensive booze more so; just the thing to "control" consumption)
• nothing about improving service, which continues to elude them; at least, it does in all the stores we've gone into recently.

Nothing, in short, of any real value to the consumer. Modernization is a lie, a shiny glittering lie, just like a fishing lure, and the hook hidden inside is that it's an excuse to keep this creaking relic alive for ten more years without threat of normalization while we 'give modernization a chance to work.' But it won't. They don't even know what's really wrong with this horrible mistake of a retail system, which is why they can't fix it. They want to "modernize" it? They've had 80 years! How many more chances do they deserve? Governor Wolf says he's a businessman? MAKE IT A BUSINESS, many private businesses. It's not even radical; it's normal, just look at any and everything else you buy.

Normalization is modernization. Accept no substitutes.



*We're considering a change here. Changing the state's current monopoly on wholesale/retail liquor and wine sales is something both liberals and conservatives are in favor of, but calling it "privatization" gives its opponents a wedge to split off liberals who don't like the idea of privatizing more legitimate functions of government, like roads, schools, prisons. We'd use 'modernization,' but... We're going to try the word "normalization," given the fact that selling wine and liquor in privately-owned stores IS normal in the majority of the U.S. (yes, even in most of the "control states") and the world. We offer this idea for the supporters of real change to use.

On Hold

So, before the "PLCB is the bestest we won!!!!" crowd starts to wonder where I am... I'm really busy. I know, my anonymous "friends" have been telling me I'm obsessed about this, but the truth is, I spent the weekend with my family, celebrated a birthday, and went to the Jazz Festival in Rochester, NY (Trombone Shorty, GREAT show). And I'm in deadline mode on a whiskey book AND wrapping up an issue of Whisky Advocate. Got a lot on my plate.

To be brief, then: we ran out of time, for which I say, WELL DONE, SENATOR CHUCK MCILHINNEY, your plan worked! Your hearings really wasted time, and made it impossible to get a liquor privatization bill passed before the June 30 deadline. So you're down as having tried, but you're not on the hook with your beer and union donors for having actually passed a bill. Be careful that fence doesn't split you right in half, now. And Senator Tomlinson? One word for you, fella: primary.

And it's not over. Things don't usually get done in the Fall session, but there IS a Fall session, and that Transportation bill needs to be passed. Let's push on this. Liquor privatization has never come this far before; don't let it fall on the floor.

Details...Why So Late, Senator?

In the wake of yesterday's endorsement of SB100 (such as it is; I'm just a blogger, fergodssake), I have to bring up this: why did it take so stinking long?

Here we are, shoved up against the legislative deadline, with only 10 days to get this bill out of committee (which is apparently achieved but not voted), passed in the Senate (and we've already been told that the votes are not in place yet), reconciled in the House (where Rep. Turzai is not happy with the loss of wholesale privatization, and who would be?), and then signed by the Governor (which should be a slamdunk; he's not going to veto a privatization bill, and I assume he's going to have input before it gets to his desk). Now, the Gov has already said he was prepared to stick around for as long as it takes to get a budget passed, so the session may not actually be OVER on July 1...but let's stick to the official calendar for now. Why did it take so long?

I can tell you in one word: McIlhinney. Senator Charles T. "Chuck" McIlhinney is the majority chair of the Senate Law & Justice Committee, the committee that oversees the PLCB in the Senate, and he got House Bill 790, the liquor privatization bill, way back in mid-March...when he promptly -- promptly -- announced that he was going to hold hearings on the bill. Hearings that the House Republicans were excoriated for not holding...by the Democrats and the union, who knew that hearings would delay, delay, delay, and do nothing to change ANY Democratic votes -- their party discipline on this has been impressive, stoked by the hopes of a Corbett defeat and continuing union-donated campaign cash -- and likely not change any Republican votes. 

Why not? Let's face it: this issue has been around for 40 years. If you're a Pennsylvania legislator and you don't know about this issue and have an opinion, you're incompetent and should be voted out. The hearings would be an opportunity for two things: delay and bloviating. McIlhinney supplied the delay -- spreading the hearings out over six weeks -- and the Democrats, led by Senator Jim Ferlo and the UFCW's jeering yellow-shirted shlock troops, supplied the bloviation, which McIlhinney was all too ready to allow.

Meanwhile, the hearings were blatantly stacked. The first hearing was all "beware the harms of alcohol" people, who could be guaranteed to be against any kind of liberalization of alcohol policy, regardless of facts. Well, okay, we thought, that's out of the way. 

But then the second hearing was almost as bad! Representatives from Wegmans and Redner's supermarkets appeared to ask for beer in the markets (the guy from Redner's made an excellent point that the cafe requirement was slanted against smaller stores), the main desire of the citizens who only want normalcy (don't hold your breath: you ain't getting it). But after Senator Williams asked them about their "diversity plan" (sure, be good to have, but what's it got to do with the issue? And how many beer distributors have one?) and McIlhinney had brushed them aside (essentially saying, yeah, that's what you'd like, but that's not how it's going to be), it was the Pro-PLCB Express again, with the MBDA saying 'You will utterly destroy 1,400 small family businesses if you don't leave things exactly the way they are!' (paraphrasing) and the president of Philly-based Charles Jacquin Liquor Co., who said "We love the PLCB!" (actual quote, and of course he does: they sell most of their bargain-style booze here and never have to spend a dime on sales because the PLCB carries all of it at cheap prices. A marriage made in Purgatory (though mind you, I don't mind a dose of Rock 'n' Rye occasionally in the winter...)), the tavern owners (who essentially said the same thing the MBDA did: don't rock the boat, we're making good money here), and a Pennsylvania winery that's managed to get in the State Stores and...you guessed it, doesn't want to rock the boat.

The third hearing lost control. The beer wholesalers got a chance to plea for no boat-rocking. There was a moment of opposition, beautifully presented by the Wine and Spirits Wholesalers and DISCUS, and they held their ground well against Senator Ferlo and his minions. But then we got three hours of straight "The PLCB is the most amazing thing since fire!" from direct stakeholders like the unions, one of the three companies that gets paid to haul the PLCB's wholesale business (not the one that's owned by Attorney General Kane's husband, oddly enough...), and the PLCB themselves (classic moment: McIlhinney says to them, the guy from DISCUS says you can't handle wholesale for 14,000 businesses (when everyone knows they can barely handle wholesale for their own 596 stores). Can you? Oh, you bet, says the PLCB guy, with a straight face. Wonder what the tavern owners had to say about that?).

Then the Lieutenant-Governor finally gets to speak, with almost no time left, and Ferlo heaps derision on him, and the State Police commissioner, while the yellow-shirted union reps cheered, booed, and cackled. It was, as veteran political reporter Brad Bumsted put it, "unlike any committee hearing I've seen in more than three decades." And in case you think I'm exaggerating about Ferlo and the union, he also said: "Cawley and his panel, including Col. Frank Noonan, commissioner of the state police, and Secretary of Health Michael Wolf, were verbally thrashed by Sen. Jim Ferlo" and "[the state store clerks] cheered wildly for Ferlo and, not surprisingly, hooted and jeered at Cawley."He then described McIlhinney's belated call for order as "laughable."

It was a terribly cynical exercise, but do you know what the worst thing was? Not one single consumer was heard from. Not one of the people who actually have to deal with this system. The Legislature didn't want to hear from the civilians, the citizens...the voters. Why start now? They haven't wanted to hear what we've had to say about the State Stores for over 40 years!

If McIlhinney was going to schedule such a circus, a pro-PLCB parade, he could have done it in a week. All these people gave what are stock speeches; the slavishly pro-labor academic Dr. Ron Zullo delivered essentially the same speech he did at last year's hearing. There's no excuse for taking six weeks...unless you wanted to delay a vote, to jam this up against the deadline so hard that it didn't really matter what you came out with, it would be too late to get it through.

Don't believe me? Then tell me why, if the last non-meaningful hearing was over two weeks ago, McIlhinney only announced his "plan" on Tuesday...and still has not actually released a bill for examination? More delay. We read today that his committee won't be considering the bill till next week. The last week of the session.

Because of McIlhinney's delaying tactics, we now have this lump of a bill. I'll support it, and urge its passage, because it's all we have time for. We won't be able to get a good law, because the Senator successfully wasted the time he had. 

Would HB790 have passed the Senate? Probably not. And McIlhinney's deliberate delays ensured that we would get this mishmosh instead. But if we don't pass this, it's going to be ten years till we get another chance to get this ludicrous relic off our backs. Thanks, Senator. I sure do hope the Republican Party remembers what you did to them when election time comes around.

Not a Mistake, Not perfect...Good Enough

Last post I asked if we would be calling Senator McIlhinney's privatization proposal "McIlhinney's Mistake." Here's what I thought we'd see in it:

Best guess at that, from things he's been saying: bars and restaurants should be allowed to sell full bottles of wine and spirits to go, the State Stores stay open, the case law stays and the beer in grocery stores situation remains in its ridiculous "cafe needed" state, and the PLCB remains as the state's sole wholesaler...and that's going to be "privatization," McIlhinney's Mistake-style.

Here's how that went when we got a revamped version of his SB100, yesterday:

• Beer distributors and bar/restaurant/deli/hotel license holders can sell wine and spirits to go (for an $8,000 annual fee ($4K for just wine/just spirits, and $2K for "specialty spirits," single category), and a limit of four bottles per sale unless you're a distributor); there are about 14,000 such licensees, and another 1,000 in escrow (some kept there deliberately by anti-drinking types).
• The State Stores stay open
• Distributors can sell sixpacks (as packaged by the manufacturer...killjoys); taverns can sell up to a case
• Grocery stores still need a deli license -- no new licenses created -- and a cafe area, some minor restrictions on what can be sold at each register area are loosened
• The PLCB remains as sole wholesaler; study of situation required after 2 years, if divestiture will not have "significant impact on the fiscal stability of the Commonwealth," the Legislature may consider selling the wholesale operations
• PLCB as wholesaler is required "to buy any specific liquor or alcohol requested by a permit holder"
• PLCB will ship to "permit holders" by the case for a fee; manufacturer/distributor can drop-ship directly to permit holders 
• State Stores get "flexible pricing"
• Licensees get an 18% discount on PLCB prices
• Elimination of the Johnstown Flood Tax!
• Direct wine shipment to citizens
• "Windfall" money goes to senior citizen property tax relief
• All retail liquor stores (State and private) to have consistent hours: 8 AM to 11 PM.
• PLCB and permit holders are prohibited from selling private labels (buh-bye, TableLeaf!)
• Creation of a Wine Industry Promotion Board (nothing about brewers or distillers)
• Did I mention that the State Stores stay open?

 Well...My major issues, in another bullet point list.

• The State Stores stay open, and with NO formula in place to close them. That's left to the discretion of the PLCB. Bad idea, verging on very bad idea. Rip off the band-aid.
• Why stop at sixpacks? Take away all restraints on volumes: distributors and taverns can both sell everything from single bottles to kegs. And why "as packaged by the manufacturer"? Why no mixed six? They'll be pulling the wings off flies, next. If they do keep the stupid "compromise with no one" sixpack minimum, I nominate "as packaged by the manufacturer" as the first thing to go in the amendment process. It's just petty. If the store doesn't want to sell mixed sixes, they can make that a policy. Doesn't have to be a law.
• Limits on wine and spirits sales for taverns/hotels/delis. If you're going to charge everyone $8,000, everyone should get the same deal.
• Kick the licenses out of escrow with a "use it or lose it" clause. Any license unsold in escrow for more than two years reverts to the state.Why should they be wasted just because some Mennonite doesn't want me to have a drink?
• Kill the cafe: this is an advantage for large supermarkets and hurts small grocers. 
• End the police-enforced monopoly.
• Privatize wholesale. Period.

Now...what I think we might get? Not much. I think this bill is either going to pass with relatively minor tweaking, or it's going to die. I'm hoping for more complete "package reform," and I'd really like to see an end to the insulting police-enforced monopoly, but I'm not holding my breath.

Actually, my hat's off to the Senator. I'd love to see all my major issues dealt with, and I do think that leaving the PLCB as wholesaler is going to be a disaster, but...he always said the hard part was coming up with something that could pass. I think he may have finessed that. He won't get any Democrat votes -- and bad cess to them, and especially the mule-mouthed Senator Ferlo -- but I think this could get 26 Republicans. I've got my fingers crossed.

And on that note...write your senators! Urge the Republicans to vote for this, and beg the Democrats to abstain. CC the Governor and make sure the Republican Senators you write to know that he needs this bill; CC your local representative to they know how you're pushing your senator. You know the union's doing it. Get off your ass and make it happen; this is the best chance privatization's had in 75 years. Don't let perfect be the enemy of good.

Here's what I wrote to my Senator:

Dear Senator Tomlinson,

Senator McIlhinney's proposal for eventual liquor privatization is out, and I'm sure you have the details. The proposal doesn't close the State Stores, doesn't slash jobs, keeps the wholesale monopoly, covers the revenue, provides for senior citizen tax relief, gives Pennsylvanians at least some of the beer package reform they've been begging for, and gives beer distributors an affordable way to add wine and spirits to their businesses. Most importantly, it ADDS competition, choice, and convenience to wine and spirits retail for Pennsylvanians, without harming family-owned beer distributors.

It seems like a very good compromise, one that the House can approve, and that the Governor can sign for a much-needed legislative victory for the Republicans. I hope I can count on your vote for this proposal in its final form; it is, as I've told you, very much a ballot box issue for me.

Sincerely,
Lew Bryson

Feel free to use some or all of it. DO IT!

Give Rep. Petri an Earful

Rep. Petri -- well-known as fairly soft on privatization -- has a liquor privatization survey up on his website. It's lengthy, it's somewhat slanted, but I'd encourage you to take it, and give thoughtful -- not shouty-stupid -- answers. We need to give him something to think about, not an excuse to dismiss. Beer is very much included, by the way.

I find this interesting, because it indicates that Petri does believe that some kind of privatization bill will come back from the Senate -- likely at the very last moment Senator Chuck "Footdragger" McIlhinney can engineer -- and he wants to be ready. We need to help him.

When he asks you where you want to buy booze, tell him YES. Sell it in groceries, gas stations, convenience stores, Target. Why not? Wegmans has a great record on preventing underage sales, and no gas station chain will want the fines that come with such sales. When he asks you what you want to buy there, tell him YES: beer, wine, and spirits. Again, why not? 

When he asks you "Do you think that Pennsylvania should retain the wholesale operation in order to avoid raising taxes to fill the loss of approximately $80 million in revenue?", tell him NO! Tell him that his numbers are speculative and pessimistic, and don't take into account all the revenues from a private system; privatization is going to be, at worst, a wash. And if it isn't? We already have some of the highest liquor and wine taxes in the country; maybe it's time the rest of the Commonwealth's citizens paid a little more of their fair share.

And it is a little: $80 million is a lot of money, but it's a tiny shred of the state's annual budget; they could recoup most of it by cutting out some of the ridiculous overspending at the Legislature itself (starting with the size of the thing). The main point here is that if Pennsylvania retains the wholesale operation, we're still leaving selection in the hands of a committee in Harrisburg: not what we're in this for at all, and he needs to understand that.

Take the survey, and think about it as you do. What do YOU really want from privatization?

• Lower prices
• Better in-store selection
• More stores 
• Better service
• An end to the police-enforced monopoly
• Wine and beer sales in supermarkets, drugstores, convenience stores
• End the case law
• End the state wholesale monopoly

Think about it...and then write your own senator and representative and tell them. And then tell them that this is a ballot issue for you, and you'll be watching how they vote. You might as well...because every State Store union member is.

The Selection Lie

When the PLCB Partisans have made their statements about how dangerous privatization is -- ignoring the fact that it doesn't seem to be causing chaos or undue harm in the states that have it -- and how many jobs it's going to cost -- their jobs, usually, which isn't exactly objective, and ignores the jobs that privatization will inevitably create (if we don't do it the stupid way Senator McIlhinney wants to; yeah, Senator, I said stupid, and if you want to talk to me about it, you already have my email) -- and how much 'revenue' it will cost the state -- which 1)it won't, and 2)that's not the point anyway -- they often get around to saying something like, "And you know, privatization will mean less selection. The private stores don't carry as many different wines and liquors as the LCB does, and supermarkets won't carry a lot of your craft beers; they'll only carry what sells."

Can we just say "bullshit" and be done with it? Because you'd have to be feeble-minded to believe that argument (which really makes me worry about my own state representative, Frank Farry, who actually quoted it to me as the main reason he voted against HB790). All you have to do, quite literally, to disabuse yourself of this notion is go to one of the 160-odd Pennsylvania grocery stores that are now selling beer and look at their beer selection. The Wegmans in Downingtown, for instance, where I bought this bottle of Brooklyn Local 1.

Or you could go to the Whole Foods in Plymouth Meeting, where they even have six taps for filling growlers. But before you make this silly argument, do the really simple thing and just go look at what privately-owned supermarkets are already selling in Pennsylvania! And then stop blathering this ludicrous "talking point" that the state store clerk's union or the Malt Beverage Distributors Association gave you.

It's not just beer, either. Want to see what wine and liquor selection looks like in a privately-run store? Just go look at one! They're right across the border: Joe Canal's, Total, Roger Wilco, Moore Brothers... Are there corner bodegas in the side streets of Trenton that have tiny selections? Sure there are, just like the "grocery" selection at a 7-11 is dwarfed by what you can get at Wegmans, or Giant Eagle, or at an Aldi's, for that matter. That's the point: they don't all have the same stuff, so some of them have a lot more.

But really. If you're making these arguments, or even thinking about considering them as possible...Just. Go. Look. It's all you have to do to realize that they're pure delusion, lies, distortions of truth. If we break open wholesaling in this state -- and it can be the same "system" as the beer wholesalers, they're doing a great job supplying us with multitudes of beers! -- the private stores will get the selection. And it will be the selection you want, not the selection some PLCB committee in Harrisburg has decided you're going to get.

Tell Senator McIlhinney and your state senator that you want real privatization in Pennsylvania: privatized retail and privatized wholesale. If we don't get it all, there's no point. Happily, McIlhinney does get one thing:

"The committee's chairman, Sen. Charles McIlhinney, R-Bucks, also attacked part of Corbett's justification for selling private wine and liquor store licenses, the idea that a windfall of $1 billion or more would result. "If this is about a money maker, I don't think that's really where we should be going with it," McIlhinney told reporters after the hearing. "If we're going to do privatization and try to make more convenience out there, it shouldn't be some way to generate a billion dollars and then give it away."

Right on that one, Chuck. Now get your head straight on the rest of it. Don't compromise with people who aren't going to make a deal. 

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 that...is 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, but...it can't hurt (I wrote the governor, too, BTW).

The thing is...to 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.