The PLCB and Freedom

Just something to think about while you enjoy our Nation's birthday.

Wolf's Privatization Plan

"The state would still be running the system, but they would be leasing it out, That is privatization.” Jeffrey Sheridan, Governor Wolf’s press secretary.

Hired by the government, paid by the government, given offices by the government, but "that is privatization"? Wolfonomics is spreading! Now there are two people who are completely ignorant of economics over the past 200 years. Goes with the "Competition raises prices"  mantra the Governor tried to use when he vetoed the privatization bill.

This is the Wolf system in a nutshell:

What I Like about the PLCB

...
??
Hmmm....
No, not that.
Err, maybe...
Nope.
??
Ah, I got it!

It always reminds me why I shop out of state: for price, selection, and service.

Hop across the river and save.

You're not in your state store anymore

Yep, that is a real New Jersey Liquor store. 10,000 wines, over 4,000 spirits and 1,500 beers. 

No joy for whisky drinkers - thanks PLCB.

First we had the Pappy Van Winkle debacle, where the PLCB didn't know that when you have a monopoly on a product that is in very high demand for that product, and you tell everybody all at once that the product is available...there will be a rush to get said product. It seems nobody in Harrisburg went to business school or understands basic demand.

Now we have the picks for the top malt whiskies of the year being released, and like with the wine lists that I chronicled on the blog starting back on Nov, 11th, it doesn't look good for PA.

Top Speyside Single Malt - Craigellachie 17 - NOT AVAILABLE IN PA.

Top Islay Single Malt - Signatory 1998 bottling of Laphroaig - NOT AVAILABLE IN PA.

Top Islands/Highland Single Malt - Arran The Devil’s Punchbowl III The Fiendish Finale -
NOT AVAILABLE IN PA.

Top Lowlands/Campbeltown Single Malt - Rosebank 21 - NOT AVAILABLE IN PA.

Top World Whisky - Broger Burn Out - While also not available in PA, they get a pass, since I can't find it anywhere in the U.S.

The PLCB slogan should be - "Only the rest, never the best"

Would Privatization Kill Children?

To go with last year's “Non-union employee-sold booze killed my Daddy” commercial, you may have seen the newest propaganda from the State Store clerks union about how increased availability of beer and wine will lead to the downfall of civilization as we know it. Among other lying lies from the big fat liars at the UFCW media lying office, the ad says that North Carolina put in "a similar law" and it's killing one "child" every week from underage drinking.


The idea that they can trace the death of one underage drinker (who are, BTW, usually 18 and older, hardly the toddlers pictured in the ad) per week directly to this law and ONLY this law...is ludicrous. But here are some even bigger things they don’t tell you about crazy loose boozy North Carolina vs. wonderfully 'controlled' Pennsylvania.

• North Carolina has a lower rate of high BAC fatalities than Pennsylvania 
• North Carolina has a 39% lower rate of women 18-44 who binge drink than Pennsylvania
• North Carolina has a 26% lower alcohol use rate for women 18-44 than Pennsylvania 
• North Carolina has a lower Fetal Alcohol Spectrum Disorder rate than Pennsylvania 
• North Carolina has a better rating from MADD than Pennsylvania 
• North Carolina's DUI fatality rate is the same as Pennsylvania 
• North Carolina's overall binge drinking rate is 17% lower than Pennsylvania’s 
• North Carolina is also one of the 17 alcohol control states, like Pennsylvania 
• North Carolina liquor stores are checked for underage sales. Pennsylvania's are not. 
• North Carolina allows beer and wine sales in grocery stores.  

It would be an improvement if Pennsylvania were more like North Carolina, but it will be even better if we privatized.

Sources:
http://www.cdc.gov/ncbddd/fasd/data.html
http://responsibility.org/sites/default/files/files/TCC-AIDF_2012.pdf
http://www.madd.org/drunk-driving/state-stats/
http://www.americashealthrankings.org/WI/Binge/2012

Let’s Kill Another Privatization Myth

Like the movie, some supporters of the State Store System will "say anything" to keep the PLCB jobs program and prevent the citizens from having the choice, selection, and service enjoyed in the majority of states.

The latest in their series of  "Look (at our) Interesting Example," or LIE as I like to call it, is that privatization will kill craft beer, micro-distilleries, and small wineries (you pick: one, two, or all) in Pennsylvania. 

Really? Consider:

1.       What state has the largest number of craft brewers?

2.       What state has the largest number of micro-distillers?

3.       What state has the largest number of small wineries?

4.       What do these states have in common?

Not hard to figure out that California is the answer to #3, but they also lead in #1 with 316 as of last year. Question two goes to the state best known for distilling, Kentucky, with 16 micro distillers as of 2013 and California is second with 14

Both California and Kentucky have private alcohol sales - retail and wholesale. So tell me again how privatization will kill off these businesses in PA?  I’ll wait while you make up something.
.....Right. Exactly.

My next article will prove that PA rural roads have nothing to do with DUI fatalities compared to our surrounding states. Another LIE that pops up a lot.

Where the PLCB Money Goes: Then and Now

Let's have a look at what the PLCB has done with its money -- our money -- since the new millennium has started.

Fewer stores, more employees: In July 2000 there were 692 stores with 2,869 full time workers and 1,072 part-time workers In December 2013 there are 604 stores with 3,080 full time workers and 1,417 part-time workers. Stores decreased by 14.6% and employees increased by 13.5%.

Higher gross, lower margin: In 2000 the PLCB had record sales of $1,083,330,579 and record operating income of $89,868,893 or 8.30% of sales. In 2013 the PLCB had record sales of $2,171,946,398 and record operating income of $151,877,723 or 6.99% of sales a decrease of 18.6% in operating income for every dollar spent in sales compared to 2000. (Hardly surprising, given the increase in overhead represented by the previous point.)

Cost overruns: In 2000 the Auditor General found the PLCB incurred $408,000 in additional costs due to problems in Its implementation of a new computerized Warehouse Management System. In 2010 the Auditor General reported the PLCB incurred excess costs of $500,000 due to problems with the new inventory system (on top of being over budget). The inventory system was contracted for $25.8 million and as of June 2010 has cost $66.6 million, or 158% over budget.

More for ads, less for education: In 2000 the PLCB contributed 0.76% of gross from sales to drug and alcohol education.  In 2013, the biggest year they ever had, they donated only 0.66%, up from the 0.53% in 2012 (also a "record year").  The PLCB doesn’t release how much they spend on advertising, but what they have released indicates they spend 30-40% more on advertising than education.

More booze, less enforcement: In 2000, the PLCB gave 7.39% of gross from sales to enforcement of the liquor code.  In 2013, the PLCB only did 6.19%, a shortage that works out to over $5 million less for enforcement. So even though the number of licensed establishments increased and the population increased, there was less liquor code enforcement. State stores still aren't checked at all for compliance.

More embarrassment, less arresting? In 1992 the Auditor General reported that: "Policing bootlegging and illegal importation of liquor without payment of Pennsylvania taxes should be the primary mission of the liquor law enforcement personnel."  In 2013 there were 2 reported cases of “bootleggers” caught. It could be that the more support for privatization there is, the less border enforcement takes place...since that would highlight the huge problem of people who purchase out of state. It might have something to do with the $5 million the BLCE doesn’t get since they were no longer funded at year 2000 levels too.

Same lack of relevant experience: In 2000 no member of the Board has had any experience with running an enterprise anywhere near the size of the PLCB.  That hasn’t changed at all in any year since and they still only work 21-22 days a year.

"Multiple weaknesses" in procurement: In 2000, the Auditor General reported that: “Weaknesses exist in the administration of the Pennsylvania Liquor Control Board's warehouse management system consultant contracts.”  In the 2010 Audit the Auditor General reported that: “…multiple weaknesses in the PLCB award process, including lack of documentation. As a result we could not verify the PLCB adhered to proper procurement standards or exercised proper due diligence in awarding the contract.” (Remember that one of the PLCB “modernization” plans is to have less oversight in procurement.)

The PLCB has not changed in the fourteen years since 2000...except to be a larger bureaucracy with less customer service and more problems, that spends less on its very reason for existence: control. The problems are systemic, pervasive, and totally ingrained in the PLCB's processes and workforce. They won’t be fixed until the entire system is replaced with privately-run wholesale and retail operations -- as it is in the majority of other states and countries -- and they are able to fully concentrate on regulation, compliance, and enforcement, and not sales.

Privatization is Modernization – accept nothing less.

I’m a hater

Or at least that is what one pro-PLCB representative called me and he is right: I hate a lot of things about the PLCB. I’ll start off with these two dozen or so and you can add your own in the comments.

Oh PLCB, how do I hate thee, let me count the ways.

• I hate going to the state stores.
• I hate that they don't have what I want.
• I hate that most of the time I can't order it.
• I hate that if they do have something it is usually more expensive.
• I hate that Philadelphians (or any Pennsylvanian, for that matter) don't have legal access to anything approaching the selection of Joe Canal's, Moore Brothers, Total Wine, BevMo, and a host of others.
• I hate that even the PLCB's buyers know so little about brown spirits.
• I hate that the so called 'wine specialists' don’t work standard hours; say noon to eight when most customers could use them.
• I hate that the state cheats its own citizens by not allowing liter size bottles to be sold everywhere.
• I hate that the alcoholic's best friends -- the mini, the half pint and the pint bottle -- are cheap in PA, but the 1.75L bottles are 99% of the time more expensive.
• I hate that a manager can’t even set up the stores they manage to best suit their customer base, but have to follow the forms sent by Harrisburg that tell them where every bottle has to be placed.
• I hate that the PLCB doesn’t even figure that out themselves, they hire an out of state firm to do that for them. 
• I hate it when the union says that five West Virginia counties lost all service when they privatized...but don’t tell you people in those counties still don’t have to drive as far as residents of the 20 PA counties that have only one or two State Stores.
• I hate that while Gross From Sales  has increased 75% since 2000, contribution to the PSB only went up 49%, contribution to Drug and Alcohol education only went up 60%, and that in this "record year" the total contribution from sales is less than the average of the past 14 years.
• I hate wine kiosks and the very idea of wine kiosks; anybody who had a hand in insulting the consumer in that way should have been fired.  
• I hate that the three members of the actual liquor control board worked only 21 days last year.
• I hate that they need a $150,000 babysitter because the board can’t manage to work more than 22 days this year.
• I hate that somehow the PLCB thinks that the alcohol in beer is different than the alcohol in wine or whiskey.
• I hate that I can’t get a case discount to try and mitigate the usually crappy prices.
• I hate that people think the state stores are a cash cow when in reality the non-tax contribution is under 3/10ths of 1 percent of the budget.
• I hate it when we are told that PA has the lowest incidence of underage buying when the state stores are never checked for compliance.
• I hate that the PLCB spends more on advertising than education. Just what are they actually trying to do?  Make sure young people know what to buy once they are 21?
• I hate it that the union thinks one poll counters four decades of polling that show the citizens want to be rid of the state stores.
• I hate that the PLCB thinks convenience has gone up after closing 20% of its stores.
• I hate that the PLCB keeps spending money to rename the State Stores.  No matter what they call them they are still going to be State Stores.
• I hate that some cube rat or committee in Harrisburg decides what an entire state is allowed to buy.
• I hate that the PLCB online inventory has hundreds, if not thousands, of mistakes in spelling or placement making it far more difficult for the consumer than other online retailers.
• I hate that I live as far away from New Jersey and Delaware as I do.
• I hate that after 80 years we are still discussing what the majority of the states have already figured out.

To show I’m not all bad I loved Joe Conti.  He was so incompetent that I wondered if he was secretly working for privatization.

Privatization IS Modernization and government control of retail is Socialism.

The Numbers Game

The latest news is that the  PLCB hired an acting executive director to oversee operations.  This is the same guy that oversaw storing extra wine in trailers in the summer as the Director of Supply Chain. Maybe if the board worked more than 21 days a year (2013) they wouldn’t need a $150K babysitter.

NEWS FLASH! The Board is going to work 22 mostly half days in 2014.  That will surely improve things.

On to the reason of the post today.  I heard The Numbers Game by Thievery Corporation on the radio and that got me thinking about the PLCB and their numbers. Somehow Thievery Corporation and PLCB just meshed….weird how that is.

In 2008 and 2011 the PLCB did a survey about border bleed and buyers habits.  Seems like that time should be coming around again.  This time I have a suggestion for them.  Drive to New Jersey, ask nicely of the store owner or manager of Joe Canal’s or Moore Brothers if you can survey the people in their parking lot and then survey all of the PA plates you want, I’m certain you won’t have any problem finding a few hundred or more any day of the week. Who knows, one might be mine.  Do the same in Delaware with Total Wine and in Maryland. This way you get people who are actually buying not just saying they are buying to a survey taker.

Take all that info and then compare it to all those zip codes you bother the crap out of consumers to collect, add up what they spent with all the other out of state receipts and then tell us how bad the border bleed is. Some of your workers are frothing at the mouth on the internet saying how many Canadians, New Yorkers, Ohioans, Marylanders and West Virginians are coming by the bus and ship load to buy here in PA.  You have the numbers so tell us.  

I think since you never have said a word about positive border bleed it really is inconsequential no matter how good you say the stores are or how much you think the prices are competitive.  I think it is so bad as to be embarrassing compared to what leaves PA which is why you have never done it.  Here is your chance to strike a blow for socialist liquor control.  Prove to us how good it is or tell us what we already know – that the people really don’t like or want the state store system and would rather buy from a free market store than a government controlled store.  Maybe the new guy can take this ball and run with it. Just don’t wait too long, you don’t have that much time left.

Privatization IS Modernization and NOW is the time.