We need the PLCB! Because it...does what, exactly?

When talk is raised about privatizing the state's 80 year old monopoly on sales of liquor and wine, of doing away with the PLCB-controlled State Stores, we hear a variety of reasons against it. "Reasons" like these:

"We need the PLCB because it collects taxes."

Really? The Commonwealth of Pennsylvania....

• collected about $1 billion in cigarette tax last year without state employees selling cigarettes.
• collected about $9 billion in sales taxes without having state employees in WalMart, Target, car lots, Burger King, KFC, Dollar General, dry cleaners, furniture stores or any of the thousands of other businesses in PA.
• collected about $1.25 billion in motor vehicle fuel taxes last year without having state employes work in gas stations.
• collected taxes on about 1 million firearms and ammunition sales without having state employees sell firearms or ammunition.

"We need the PLCB because it controls alcohol consumption."

Really? New York, New Jersey, and  Maryland have lower DUI fatality rates than PA. Ohio is statistically a tie and only Delaware and West Virginia are worse. (And Ohio and WV are control states...) New York and New Jersey have lower underage DUI fatality rates than PA; Delaware and Ohio are statistically tied; only Maryland and West Virginia do worse.

The UFCW -- the union that represents State Store clerks and has been a major lobbying foe of privatization of the stores -- claims that PA has the lowest death rate in the country associated with alcohol consumption: it is not true. The PA rate has gone up almost 31% since 2007 and is now higher than Maryland and New Jersey and may fall behind Delaware when the latest report is released. The most open private state in the country -- Louisiana -- has a lower rate than PA. What does all this mean? Alcohol consumption is affected by many independent factors, and "control" is not particularly effective.

There are already over 20,000 licenses for private businesses to sell alcohol; none of them have state employees on their registers. Why do the private employees have to take RAMP (Responsible Alcohol Management Program) training from certified instructors...but State Store workers don't?

"We need the PLCB because it keeps alcohol from minors."

Really? How do we know that this even works? State Stores are NEVER checked for underage sales by outside agencies, like the police, or the state's Bureau of Liquor Control Enforcement, but private businesses are. There is no independent proof that the State Store System makes any resident of the state -- young or old -- safer.

"We need the PLCB because it provides revenue for the state!"

Really? The State Store System provides under 4 tenths of one per cent of the state budget. It also owes over $600 million as its share of the pension deficit, a number that's missing from the PLCB's sunny annual report.

The State Store System limits employment, since every state or province that has fully privatized tripled employment in the industry.

The State Store System does not pay any business taxes -- 2,000+ private stores would.

The State Store System does not pay any license fees -- 2,000+ private stores would.

The State Store System limits access to product, thus limiting sales made and taxes collected (and sending thousands of Pennsylvanians across the border to buy booze -- and gas, and smokes, and lottery tickets -- every day).

These aren't reasons; they're illusions!

Why is selling liquor and wine considered an essential part of government? If we could go back to 1933, do it over again, pick a different way of selling liquor and wine...is this what we'd choose?

Really? 

Why does the legislature refuse to correct this aberration? Is it because satisfying union bosses is more important to them than increasing employment, going along with 40 years of public opinion polls, or treating citizens like adults?

Really?

Privatization IS Modernization. Really!

We can't even be better than Utah

There are 2 and only 2 states that completely control the sale of wine and spirits. One is Pennsylvania and the other is Utah. Pennsylvania, the Keystone state, the state where our democracy was formed, one of the 13 original United States of 1776. Utah, 120 years younger, a theocratic territory with a religious background of no drinking,

You would think that Pennsylvania with over 4 times the population would have stores that any large U.S. city would claim. Small boutique stores in trendy urban areas, Specialty stores with unique selections picked out by knowledgeable owners, Mega stores with 30,000 square feet of retail space and 10,000 products in stock. Pennsylvania has none of that. In fact, the Commonwealth has fewer stores per capita than Utah, and even less when you look at the number of stores per drinking age population.

Here is a store in Heber Utah,, population 12,900, that if transported to anywhere in PA would be the 2nd largest store in the state. That is only because the PLCB has opened ONE in the entire state that is larger and that happened only a few months ago.

 

Is it a fluke?  Something they did to to show off?  I mean, doesn't PA have thriving metropolises of 13,000 people or MORE that could use a store like this?  Not according to the PLCB.  Their cookie cutter approach means that even places that could support specialty stores, Mega stores and boutique stores don't get them. The PLCB doesn't know how to run them, staff them or even sell in them. Our system is so backasswards that "modernization" actually results in LESS products available in a given store size. Why doesn't Philly or Pittsburgh or Scranton or Harrisburg or Erie rate a store like Utah has in Hurricane  (population 13,700).  A store that is bigger than anything in PA...how's that work? 

Does their DABC actually pay attention to consumer demand? Are they run by actual business people and not political hacks?  (Not really, their board is as hackneyed as ours) Is it because they have an advisory committee of real business owners, brewers, restauranteurs and health professionals?  My guess is that they are actually more competent across the board and are held more accountable then the people who run the PA state store system. You don't see DABC officials being cited for graft or nepotism or coming up with wine kiosks, or failed "store in a store" ideas.

In another state, New Hampshire just opened two 20,000 square foot stores both larger than anything in PA. We know what a thriving business they have since people actually go to their state stores rather than away from them like in Pennsylvania. In just over 2 years Washington now has over 40 stores larger than anything in PA. That's what happens when you pay attention to consumer demand. We get wine kiosks.

While nobody should suffer under the limitations of states monopolizing what should be privately-owned and run retail...the question is, why do Pennsylvania residents have to be at the bottom?

Privatization IS Modernization.

Why can't Johnny read or do math?

For those of us following such things there has been a trend by some union representatives and clerks to spin or play down the amount of drinkers and thus making our voice seem more like a minority and not as important as those who think they are keeping utter chaos and ruination at bay. 

Specifically, they like to use the 13% number as those who drink once a week. However, as with most things math the clerks and the union have their own way of doing things.  What they seem to fail to realize is that the total is cumulative – i.e. you have to add the everyday, the few times a week and the about once a week numbers to see the TOTAL amount of people who drink at least once a week. This number ranges from 30 to 35% depending what time period you look at.   

In fact, Gallup has shown time and time again that 66% of the entire adult population drink some amount of alcohol.  As they reported in August this year “Thirty-five percent report having had a drink in the last 24 hours and another 29% in the past week.” This works out to 64% of drinkers which are about 66% of the population which comes out to over 42% of the total population (.64*.66 = .4224).  This is higher than what is normally reported because of the holiday included in the survey period which means some special occasion drinkers are added in that normally wouldn’t be.

We 2/3rds of Americans who choose to drink are the majority that the state store system wants to control.  They tell us what, they tell us when and they tell us where – the very antitheses of the freedom an open market brings to the citizens.  Taxation, regulation and enforcement are the role of government, not retail sales. The citizens and the state will be far better off once the aberration of the current state store system is corrected. Every state or province that has privatized some or all of their alcohol system has seen an increase in employment in the industry.  It tripled in Washington and Alberta. Increased in Ohio, Iowa, Maine and West Virginia too.

We are not inventing the wheel again.  Take the best of that the majority of the states do, regulate and enforce what they have problems with and come up with the best system.  That is real modernization not putting lipstick on the state store pig with new names or wicker baskets.

Privatization IS Modernization – Accept nothing less.

Provided for historical data (Gallup)

Every day A few times a week About once a week Less than once a week Only on special occasions Never No opinion % % % % % % % 2007 Nov 11-14 7 13 10 9 29 33 * 2006 Nov 9-12 10 13 11 9 27 30 * 2005 Nov 7-10 5 14 11 10 29 31 * 2004 Nov 7-10 7 13 13 10 25 32 * 2003 Nov 3-5 7 16 13 12 25 27 * 2001 Nov 8-11 7 12 13 14 24 30 * * Less than 0.5%

People want to break the law

Just as Prohibition made criminals out of ordinary people who just wanted to have a beer, a cocktail, a glass of wine, the PLCB steadily creates criminals in Pennsylvania every day. Because the State Stores suck so hard, thousands of Pennsylvanians break the law every day, crossing the borders to buy booze and bring it home. The most common question people ask Google to get to this site is some variation on Can I bring booze into PA from another state?

Why, the PLCB is so crappy that they even hurt Pennsylvania's small, privately-owned, family-owned beer distributors' business. When those ordinary citizen smugglers go out of state to buy wine and liquor at often lower prices in a congenial atmosphere of informed, friendly service and great selections, they can't help noticing the beer in those same stores, sold by the 12-pack, sixpack, single bottle, and even growlers. They buy the beer, then they often get lunch or dinner, usually buy gas (much cheaper in New Jersey, for instance), and maybe even do some tax-free shopping in Delaware while they're there.

Millions of dollars of taxes and business profits are lost to Pennsylvania every year this way. Why? Because the State Stores suck so bad they drive retail business out of the state. The Control Freaks usually respond to calls for privatization by asking if the loss of the State Stores' "profit" -- taken from us by what should be an illegal retail monopoly -- is worth any "freedom of choice" the system costs us.

Putting aside the total lack of customer service sense that question reveals about the Control Freaks, I have to ask in return: is the loss of millions of dollars in retail business to businesses that aren't benefiting at all from the PLCB's reign of monopolistic retail incompetence worth the mirage of control the State Store System claims to deliver (and doesn't)? Is it worth the jobs program that doesn't benefit anyone except the island of lucky winners (if you do nothing else today, click on that link and read that post; clear answer to those who decry the loss of jobs if the State Stores are closed) who can get those jobs (and their exceedingly well-paid union bosses), doing nothing for all the other retail workers in the state who get the wages and benefits normal for the category? Is it worth the time and money Pennsylvanians spend going out of state to circumvent the State Stores? Is it worth making criminals out of shoppers?

No. No, it isn't. Contact your legislators, especially your Senators. Tell them you don't want to see privatization slip through their hands. Tell them it's a voting issue for you. Tell them they've got one more chance in September to get this done. And then tell them that this is how you want it done, for the best results for Pennsylvanians. It's not hard. The Republicans have majorities in both houses, and the Governor. Make it happen.

How to 'save' the State Stores and make privatization go away

All this time we've been talking about privatizing, and the union and the social conservatives and the beer retailers have been railing about it, and yet the talk continues...wanna know a secret?

It would be really easy to get Pennsylvanians to accept the State Store System forever.

Really. Here's all you have to do.

1. Change the name of the Johnstown Flood Emergency Tax. Just change the name. Call it the Pennsylvania Alcohol Excise Tax, and most people will never say another word about it. It's the idea that the tax was for the Johnstown Flood and we're still paying it that drives them crazy.
2. Get rid of Joe Conti and the CEO position. The man's a disaster: the wine kiosks alone would prove that, but the constant ethics investigations are a drag as well. The CEO position is such an obvious patronage job that it's painful.
3. End the police-enforced monopoly. Just give up. It's rarely enforced, and it's galling to Pennsylvanians. Accept you're going to have to compete with businesses over the border...just like every other retailer does (and consider lowering the PA Alcohol Excise Tax to be more competitive...and watch sales go up, and overall revenues go up as people have fewer reasons to buy booze -- and food, and gas, and everything else -- outside of PA).
4. Kill the case law. It's not part of the State Store embroglio, but it's a thorn in our sides, and taking it away will calm us down. 
5. Link advancement of product knowledge to retention and promotion in the work force. If the union wants to keep their jobs, have them make this major concession: their retail jobs will actually depend on them selling products. 
6. Double the number of stores, kill the stock requirements, and allow local control of stocking. Do we really need 2500 SKUs in Clarks Summit, when you can -- supposedly -- easily order something through the stores? Cut the operational costs of running State Stores. Allow local control of ordering, not one plan put in place in all stores by a committee in Harrisburg.
7. Put the BLCE back under the PLCB. The PLCB and their enforcement arm don't work together. The BLCE used to be part of the PLCB; put them back together.
8. Make the PLCB answerable to the State Government. A lot of the arrogance and crap we've seen out of the PLCB over the past five years stems directly from the agency's independence. There's no reason it should be so independent. The easiest way would be to make it part of the Department of Revenue.

Do those things, and Pennsylvanians will be satisfied enough that privatization will never pass. Not in my lifetime.

Why do I lay this out, when I dearly want privatization to pass? Simple. I know the Legislature and the PLCB will never get their shit together enough to do any of this, even though none of it would hurt state revenues.

State Store Stings: a confirmation

As a follow-up to my previous post on whether or not the BLCE ever does "stings" using underage purchasers in the State Stores...I have a partial answer. I wrote to the BLCE and the PLCB about the issue, and just heard back from Stacey Witalec, Director of External Affairs at the PLCB (who has, by the way, been extremely helpful and pleasant over the past month or so; quite welcome). Here's what she had to say.

I checked in with BLCE on this for you and because our stores are not licensed establishments, BLCE does not perform compliance checks in them.

She's going to follow up and check on how many times there have been "issues" at the stores on this and get back to me, but for now...looks like a definitive answer: no, the Bureau of Liquor Control Enforcement does not treat the State Stores like they do private licensed establishments. Which would seem to take a LOT of the wind out of the "we don't serve underage; privatization would mean chaos" anti-privatization argument.

Thank God: Wine Kiosks Still Viable!

It looks like my usually reliable source was wrong: the wine kiosks live! I'm so happy; I was really looking forward to seeing these wastes of money in operation. Thank you, PLCB, for restoring my faith in your bad decision-making capability!

Check out this latest hot wine kiosk news, in which PLCB Chairman PJ "PJ" Stapleton threatens that prototype wine kiosk deployment will take place at the Wegmans in Silver Spring Township, Cumberland County (which also sells beer!), and the Giant Food Store in Susquehanna Township, Dauphin County (which does not...). These are both hot-spots of wine-savvy grape mavens, I guess. Or maybe they're down the road from someone's house, I dunno. They're close to PLCB HQ, of course, and, like Jose Garces's restaurant -- I'm sorry, his grocery store, they were hand-picked by the PLCB to receive the largesse of extended monopoly.

According to the article, "The LCB has been testing the machines in a warehouse in Mechanicsburg for three months, making mostly technical and mechanical alterations to ensure the kiosks work properly, Stapleton said." I'll just bet. Wouldn't you like to have been there to watch the bottles full of water (you don't think...would they actually use real bottles of wine?!) come rolling out? The excitement as the teleoperator (were they in a completely different room of the building?!) determined whether the person utilizing the vending kiosk was the person their ID said they were, and were sober? There's a beaut: did they actually get someone drunk to test that?

I can't wait to drive to the Weggymans and try this dope device out. I may even buy a viddie-cam to share the moment with you. Won't that be fun!

Folks...the way to get wine sales into supermarkets -- which is clearly where the people who actually buy wine in Pennsylvania want them -- is to dump the State Store System and go to private sales: put wine on the shelves, not in some souped-up gumball machine. It's something we should have done 50 years ago. Here's hoping the kiosks are the final straw that demonstrate just how asinine this system is.

Oh, almost forgot: cui bono?You need to ask? Read this again, and then think: ask not what you can do for your State; ask what your State is doing to you.

Bill to Abolish State Liquor Stores to be Introduced in January!

Holy crap! Can you believe it? Just saw this today, and my head exploded.

Lawmakers are introducing a new measure aimed at getting the state out of the booze business.

Senate Democrat Tim Sheldon is proposing the state privatize liquor sales. "Immediately, you would save the $53 million or so that it costs to operate state run liquor stores with state employees. This is a luxury that we can't afford in our state."
Sheldon said the system can be set up just like in other states that allow liquor sales in grocery and convenience stores.
The liquor control board would continue its enforcement efforts. "It could be done in a very safe, controlled way using the private sector outlets. The taxation would still be collected by the state, the regulation would be made by the state," said Sheldon.
The proposal will get its first vetting when lawmakers return to Olympia in January.

 Wait, what? Olympia? Oh, bummer. This is about privatizing the state liquor stores in Washington. Damn.

Doesn't Pennsylvania have one legislator like Tim Sheldon? No, instead, what we get are guys like Representative Neal Goodman (D-123, Schuylkill County, pictured to the left), who recently said in the Pottsville Republican-Herald when asked about the prospect for beer sales in grocery/convenience stores and gas stations: "This is something the LCB (Liquor Control Board) would have to drive. I don't think this would be something legislatively-driven. This is a debate I'm willing to have ... but it really needs to be thought out thoroughly."

See...no. That's why I really worry about the caliber of legislator in this state. This is not something the LCB "would have to drive." The PLCB has already done a lot towards allowing this kind of thing; they've granted licenses in a surprisingly liberal manner to Wegmans, Giant Eagle, Sheetz, and others. This is one area where I've got nothing but praise for the PLCB. They've been ready for years, and they're pretty clear about it:

The Pennsylvania Liquor Control Board said groceries and convenience stores could have offered beer decades ago.

"The market changed. The law has not," said Nick Hays, a spokesman for the PLCB."The Pennsylvania liquor code does not address whether supermarkets may or may not sell alcohol. It doesn't permit them; it doesn't not permit them."

Hays is right: it's the code. Which, Representative Goodman's limited knowledge -- or deliberate obfuscation -- to the contrary, is something that has to be changed by the Legislature.

There's no need to bury it in a committee for thinking it out thoroughly, either (like they did with that "sixpack law" we were supposed to get two years ago). We've thought it out thoroughly, time and time again, and then nothing gets done. Which has nothing to do with the "thought out thoroughly" part, except the bits that deal with the political calculus. Your legislators want to please you, but mostly they don't want to piss off industry groups like the tavern owners or the beer wholesalers. The whole purpose of this blog is to change that equation.
 
Readers...if you're an interested citizen, write your legislator. It's easy, go do it (type your ZIP code in the box, and you'll get e-mail contact to Da Gov and your state legislators). If you're a reporter, please, please, please, take my ideas, take my passion, steal it with no attribution, but use it. Hammer at this ridiculous system, at the convoluted crap of The Almighty Liquor Code, at the entrenched stalinist edifice of the State Store System, at the arrogant monopolist attitude of Joe "CEO" Conti, at the wasteful and questionable spending on the Courtesy Contract and the Great Table Leaf Re-Branding.
 
Because the time is as ripe as it has ever been. Yuengling COO Dave Casinelli nailed it recently: "Ultimately, the consumers will speak," he said. "There's a groundswell out there. Both sides are kind of a stand-off right now." Damn straight. Why should Washington have all the fun?

A Shot Across the Bow

Time to step things up. I just sent the following to Governor Rendell, Senators Wonderling, Tomlinson (my local senator), Greenleaf, and Rafferty, and Representative Farry (my local rep), cc;'d to the three PLCB Board members. If you feel like it, send them something similar, but don't use my letter; they'll just write it off as kook action. You can get their e-mail addresses (and those of your legislators) easily: here's a list of senators, representatives, and the governor. Have at it.


Gentlemen,

As a Pennsylvania citizen, taxpayer, and native, I strongly believe that the time has come to end the Commonwealth's monopoly on the sale of wine and spirits. This week's reports of a $173,820 consulting contract with Solutions 21 to train State Store clerks and managers "how to greet someone, where to stand, and how to read a customer's cues", and the ensuing concerns over a possible conflict of interest when it was revealed that the head of Solutions 21 is married to one of three PLCB regional managers, put a cap on a building series of questionable decisions by the Board. The people of Pennsylvania deserve better from their state agencies.

But this is almost beside the point. There is no good reason why the State is in the booze business. Approximately 75% of the monies transferred to the general fund from the PLCB are taxes that could just as easily be collected by private businesses, as is done in other states, as is done in Pennsylvania by beer distributors now. The "profits" from the PLCB stores are not insignificant, but it is very likely that any revenue loss from privatization would be more than made up by greater in-state sales when Pennsylvanians ceased going across the borders to buy spirits and wine in other states. There is, after all, a very good reason that there are huge booze superstores right across our borders; people can get the service and selection there that they simply cannot get in the State Stores. Privatization would bring those stores into Pennsylvania, keep those sales and taxes in Pennsylvania, and bring those jobs to Pennsylvania.

It has been argued since Repeal of Prohibition that the Commonwealth's 'control' of liquor and wine sales is in the interests of the citizens, that control serves, in the words of the Pennsylvania Liquor Code, "for the protection of the public welfare, health, peace and morals of the people of the Commonwealth and to prohibit forever the open saloon, and all of the provisions of this act shall be liberally construed for the accomplishment of this purpose." But all control has proven to be is an inconvenience and annoyance to the citizens. Pennsylvania's record with underage drinking, alcoholism, and drunk driving is not significantly better or worse than neighboring states that have fully privatized wine and spirits sales. The State doesn't sell gasoline, guns, or prescription drugs: why does it sell wine and spirits?

If there is no benefit to the citizens in tax revenue, convenience, satisfaction, or safety, there is no compelling reason to continue with the State-controlled retail (or wholesale) of wine and spirits. Indeed, the State's image suffers from the accusations of favoritism and patronage that dog actions like the Solutions 21 contract and the non-competitive appointment of PLCB CEO Joe Conti.

It has been estimated that privatization would bring the State a windfall of over $1 billion from sale of product stocks and other assets, and the sale of new store licenses (and I would urge the Legislature to set up any new licensing structure to benefit the State rather than the holders of licenses; it angers me, as a taxpayer, every time I hear of a restaurant license sold for hundreds of thousands of dollars that the State should be getting). Even if that's generous, and the windfall is only $500 million, that would go a long way towards plugging the current budget deficit, and tax revenues should increase dramatically. It's a win for almost everyone, excepting current PLCB employees. Some of the windfall could perhaps go for early retirement packages and re-training for the clerks and managers, they could be given preference on other state jobs, and perhaps even low-interest loans to open their own, private stores.

There may never be a better time for privatization to succeed; times such as these favor bold solutions. Pennsylvania could find new jobs and new tax revenues while pleasing the majority of the citizenry. Please consider this in the coming session.

Sincerely,

Lewis Bryson