Lies My Liquor Control Board Told Me

A nowhere near complete list of the bullshit the PLCB has fed and is still feeding the public.

1. Prior to Act 39, we couldn't negotiate prices.

There was and is nothing in the liquor code that prevented negotiating prices. In fact, all the Chairman's Selections prices are negotiated and have been since inception. In April of 2016, Elizabeth  Brassell, the Board's director of communications said as much: "You are correct that the Liquor Code does not indicate that prices can’t be negotiated or that the PLCB has any obligation to use manufacturers’ suggested retail prices. In fact, as you suggest, the PLCB’s buying power, as well as its discretion to list and delist products, allows for some price negotiation with vendors." Yet we've been told that this is a new power, granted by Act 39.

2. "And, as we’ve said all along, prices will increase for some items, when the supplier and PLCB agree that the market can bear the increase." Chairman Tim Holden.

And as we've said all along, "flexible pricing" means "higher pricing." Today will see the increase of prices on 422 items; prices that are going up because the PLCB alone wants them to go up.

3. "Because of cooperative and collaborative negotiations, we hope to reduce prices on dozens of items in the near future." Chairman Holden again, on October 28, 2016

Here it is over 10 months later and of the top ten selling spirits and top ten selling wines the only thing that has gone down in price are pints of Nikolai vodka....by 30 cents.  This can only mean one of two things. Either the PLCB failed to get any price decrease on the items they have the most leverage on; or the PLCB kept all the reductions in purchase price they did negotiate and put the screws to us, the consumers. The truth is, we don't know, because the PLCB refuses to release this information. So much for us being the "shareholders" in this state-owned "business."

4. The PLCB and the vendors view pricing information as proprietary. At least that is the reason given for no longer showing purchase and shelf prices on the board meeting minutes and why the PLCB refuses to let consumers know what 422 items are that went up in price.

Yet the PLCB listed pricing information for decades. Act 39 and 166 did not make that same information proprietary nor did they say that the public should no longer have access to that information.

5. Wine Kiosks - "This was not a faulty fiscal decision," PLCB Chairman Aug 17, 2011

Yes it was and so was trying to cover it up.

6. Under oath in front of the House Appropriations Committee in April this year, Board Member Micheal Negra said that the loss of 'the shackles' that had been on the PLCB with regard to product pricing "would deliver better revenues for the commonwealth and better product prices and availability for consumers."

Raising prices on 422 items does not provide better availability or prices for consumers. That's a no-brainer. Higher prices are not better prices. And availability? With under 620 stores in a state this size? Don't even talk about availability.

7. The PLCB operates at no cost to the citizens

We pay for everything with higher prices, less selection, inconvenience, pension debt, few stores, inept management at all levels, nepotism, graft, incompetence, anti-consumer practices and unqualified Boards just to name a few. You might as well try to tell us that the Legislature operates at no cost to the citizens.

8. In 1934 the PLCB said that stores would be located at "convenient places to serve the public."

Wow, that's a whopper that they've never gotten over. From a high of 756 stores, we now have shrunk to 604. To reach the national average -- the average -- the total would have to be 1,800. Having 200% less stores than average is not convenient.

9. We are going to run like a business.

A business is successful when it is run by people with experience in the industry, innovates, provides goods at a better price than it's competitors. Provides better service or other services than its competitors do and is convenient for the consumer. The PLCB does none of these well or at all.

"The PLCB is a cash cow!"

10. The PLCB is a cash cow.

The PLCB is $240 million in debt, had negative assets for three of the last seven fiscal years, and by their own admission saved $110 million every year for the past 4 years (through The Wonder Of Bailment!) but has nothing to show for it, limits jobs and job creation due to monopoly practices, spends more on advertising than education, and still only contributes about 0.3 percent of the total state budget.




Tell me again why we need the PLCB? We don't and never have, they do nothing for the state and only exist as a poorly run jobs program. Privatize.

65 years of research isn't enough

I've been fighting this for a while now but there is only one conclusion I can come up with:

Some of our legislators are idiots.

There, I said it.

Reading the bills floating around that pertain to Liquor control one has to wonder what and why they are thinking some of these things. Who might they be pandering too? Some are pretty obvious and others not so much. I'll give you a few...strangely specific examples.

HB 619 - A bipartisan bill to change the requirements on who can hold a wine auction for a charity or non-profit. One of the limits is that you have to be: "(6) any nationally recognized community-based voluntary health organization committed to fighting cancer which has been in existence for at least ninety years"

Well, guess what...that leaves only the American Cancer Society.  Groups like the  Leukemia and Lymphoma Society, which has only been around since 1950, don't qualify to have a wine auction to help them raise funds.

Sticking with HB 619 you have: "(7) any nationally recognized emergency response organization that offers humanitarian care to victims of war or natural disaster and has been in existence for at least one hundred twenty-five years"

Find another organization besides the Red Cross that fits those limits. Now if you live out in the sticks (a county of the third class) and raise guide dogs, for example, you could have opened last week and get an auction permit if HB 619 passes. Don't live in a county of the first or second class - they don't quality at all.

It isn't just that one bill. Here is HB 770, which has limits like this: "a club which has been issued a club liquor license and which, as of December 31, 2002, has been in existence for at least 100 years" This limits it to a handful of clubs like the Philadelphia Club and the Westmoreland Club, the only two I can think of off the top of my head. I'm sure there are a few more. Nationally chartered clubs like the VFW and American Legion don't have an age requirement.

Then you have HB 55 which wants to expand the Liquor Control Board from the current three incompetents to six incompetents, with an additional three members from the industry for a total of nine -- with full pay and benefits of course. Here's a better idea: just require that one of the current three come from the industry. You're welcome.

HB 121 means well...if you happen to be in favor of skirting the minimum wage and child labor laws - to wit: "Notwithstanding any provisions of law to the contrary, a hotel, restaurant or club licensee may permit a minor of any age to perform music so long as the minor is not compensated and the minor is under the supervision of a parent or guardian."  The parent or guardian part also goes against the current liquor code which states a supervisor "shall mean a person twenty-five years of age or older who is directly responsible for the care and conduct of a minor or minors while on the licensed premises and who keeps the minor or minors within his or her sight or hearing." Are there so many 8 year olds who are being prevented from crooning at the local saloon that we need a law passed about it and why shouldn't they be paid if they do?

HB 412 Wants to add "neighborhood improvement district management associations" as eligible entities - without any age restrictions. So start one today, get you a liquor license!

HB 483 Wants to redefine what Cider is and, to me, in a seemingly odd way by limiting the amount of flavor and carbonation. But it does remove the limit it can only be made from apples and it raises the alcohol content from 5.5 to 14%. My question is why not make it the same as beer which has no proof limit? Better yet, ask the people who know.

HB 488 Will raise penalties for licensees that sell to minors. Which is fine, great, but why doesn't it apply to the State Stores? Because they are never checked by any outside agency or police force for sales to minors, and they aren't "licensed."

Not to be outdone, the Senate also has some silliness going on with liquor control. Everything from "Modernization" SB 15 which readers know I've dissected already, to more "Eligible Entities" with age restrictions (SB 323)

SB 611 Will let the state stores sell lottery tickets, "except that no bond, insurance or indemnification may be required by the board" We all know that nothing (cough cough kiosk) ever goes wrong when the board does things.

This is about 20% of all the liquor-related bills introduced so far. Now you know why the liquor system in Pennsylvania is so screwed up. Wipe it clean and start again. Being normal isn't bad, but living in PA as a liquor consumer is.

END IT, DON'T MEND IT.

The PLCB conundrum

The PLCB, not known for their problem solving ability, continues to create problems caused by their own inefficient business model and inability to adapt.  The bloated overhead, incompetence, top heavy management, and lockstep mentality prevents them either coming up with solutions that a real business would, or varying from their "one size fits all" systemic thinking.

An example of this is being played out in a corner of Westmoreland county.  The PLCB has two stores in Belle Vernon, PA. One is actually in the town, while the other is in what is called the tri-county area. where most of the retail stores are. The store at 321 Tri-county Lane, which they want to replace, is about 120 feet from the entrance to the Giant Eagle grocery store, which follows the current publicly expressed desire to have stores in or near a grocery store.

They want to move it someplace within a mile of the current location -- how convenient.

They are also going to make the new store bigger, going from about 3,000 square feet of retail and warehouse space to 4,500 square feet and they say that this will happen by the fall of 2015. Or it might be like Lebanon, which inexplicably took 3 years to move and upgrade (and it still isn't done yet), or like the store in Mountaintop which took over 2 years to move less than 100 feet, or the one in Philly near Penn that took over a year. You get the picture. We'll see at some point if they hold true on this one. If you want to see what it will supposedly look like, the PLCB used the exact same plans for store 4027 at Pittston Crossings in Pittston Township. Seriously, they didn't even change the store number on the plans to reflect the different store.

So there is the conundrum.  Do you keep the stated goal of customer convenience, or do you put some lipstick on the pig of a state store and make it larger but carry less different products per square foot, as all the remodeled stores do? Also, with this larger store, will the smaller store in Belle Vernon stay open, or close? I can't find an answer to that, but the PLCB has closed 20% of their stores in the union era. It apparently just got too expensive to keep them open.

What would real businesses do? To start with, one owner probably wouldn't have the only two locations in town! It turns out the parcel of land directly behind the current store is empty and not owned by the shopping center. That would be the first thing I would look into, if the zoning would allow a store to be built and what kind of deal could be made with the current owner. However, the PLCB doesn't want to own their stores and makes no permanent investment in the locations they are in (I don't think redecorating counts), so unless the owner wanted to do everything up front and then lease it -- the PLCB isn't interested.

The next thing would be to look at the market. Would a real specialty store be profitable? I don't mean a PLCB "specialty" store (which is just a regular PLCB store with Chairman's Selections), but a store that caters to the harder-to-find items in wine and liquor. The PLCB could do that if they weren't so locked into the cookie cutter approach (and if they knew how to sell product), but the biggest reason they don't do it is that they can't afford it.  The less expensive the item, the more profit margin they make. As I showed in this story, they can make over 80% and sometimes near 100% margin (including the JFT) on an $9-11 bottle of wine but only about 50% on a $100 bottle of wine.  When you don't know how to sell good wine, and the majority of wine you do sell is lower priced, that can be a problem.

Of course, this whole problem goes away under privatization. Grocery stores could be selling wine, and if you did want something they didn't have, you could go to a real liquor store or order it -- most likely online -- from another PA store. You can be sure they wouldn't tell you it will take 2 to 3 weeks to arrive like the current SLO system. (I love that, it shows at least one person in the PLCB knew what they were doing -- SLO(w) system indeed!)

Lastly, remember how the Union says that they provide rents to local property owners as a so-called benefit of the state store system? In this case, the Glimcher Group whom they rent the current store from is a multi-state corporation with properties in 13 states.

More New State Stores (that are not near grocery stores)

Greetings, PLCB real estate specialist. Your mission is to find, have built or renovate, 4,500 square feet of retail space within walking distance of a grocery store. You have at least a dozen grocery stores in the area and three years to accomplish your mission. If you fail, the PLCB will deny any knowledge of your existence, your mission, and any money spent on it.

As an addendum to my post of the 26th, and a prime example of why "modernization" is going to turn out to be just another raft of lies, here's a bit more proof that the PLCB may not want to do -- or get done -- what they say they want to do. In 2011 the State Store at Crestview Drive in Lebanon closed. Now, over THREE YEARS LATER, the PLCB is going to open a new store in the Kmart shopping center at 1745 Quentin Road, supposedly in September of this year right between a hairdresser and a Dollar General. Given the PLCB's stated "modernization" goal (which the Democratic (and pro-PLCB quasi-Republican) legislators wave as an alternative to privatization) of locating more stores in or near grocery stores, that sounds great, right?

Well, guess what: there isn't a grocery store in the Kmart shopping center. While Kmart does carry food, it isn't a full-fledged grocery store, like the Weis, Giant, Aldi or Foodland (the nearest, in a different plaza across the street), all of which are in nearby shopping centers. Maybe the Dollar General store next door fits the PLCB idea of a grocery store? Or is it that Foodland being across a busy street in another plaza is the PLCB's idea of "one-stop shopping"?

Remember, this is after having over 3 years to do what they say they want to do. It's not like it snuck up on them. So you have to ask....do they really give a damn about consumer convenience, or are they just giving lip service? Then ask yourself why it even took three years to replace the store that closed? Would a private retailer ignore customers for that long? Of course not, but a monopoly can because they know the customers aren't allowed to and can't go anywhere else. That is what they call world class service.

It seems to be another fine example of the PLCB not doing what they say they want to do. But at least we do know what floor polish will be on the floors.