Conti Speaks!

Interesting interview with Joe "CEO" Conti on the new Grub Street Philadelphia site. Kirsten Henri asked him about the "wine boutique" concept, and gets some answers that just leave you slack-jawed. For instance, the boutiques are "picked" by putting ads in local newspapers, and waiting for replies, a charmingly innocent way of making sure you get the response you want while remaining "courtesy contract legal." And a great exchange here:

Conti: ...we weren't looking to partner with restaurants, we were looking to partner with high-end gourmet food stores.

Henri: Maybe it's confusing because your first partner, Jose Garces, is known for being a restaurateur, not a grocer. [Score!]

Conti: Jose basically was doing this market in the Western Union building. When he heard we were placing boutiques, he called us.

Clearly Garces reads the real estate ads in the local papers; what, in the "Monopoly Opportunities for Advantage Available" section?

But this is my favorite:

Henri: Are you surprised some restaurateurs are bent out of shape?

Conti: How can I be diplomatic here? [I assume this means, "How can I insult your intelligence and get away with it?"] I'm from a restaurant family. I like to tease I'm a bartender by birth. My father was president of the National Restaurant Association. [This, BTW, is essentially Conti's self-stated qualification for his current position: heredity.] Yes, I was surprised. It's a very old-fashioned, parochial view of the restaurant market. Decades ago we realized the hospitality industry survives best when there are a number of options for the consumer.

Didja see that last line? "...the hospitality industry survives best when there are a number of options for the consumer." Guess that doesn't apply to retail wine and spirits sales!

These ridiculous ideas only point up how ill-suited state-owned monopoly booze sales are to modern commerce. These "boutiques" are clearly an unfair advantage to stores that are selected on the basis of personal choice by unelected, unregulated bureaucrats. The wine kiosks are a bumbling circumvention of supermarket sales.

Stop making it so hard! Privatization would fix all of this, increase jobs, continue the collection of taxes, and put an end to the embarrassing parade of corrup -- er, "the appearance of a possible conflict of interest." The Legislature needs to put an end to this farce, and now would be a great time.

Didja Ever Doubt It?

Remember this?

Next call: is there any patronage on the wine kiosk contract, anything that might benefit anyone related to someone at the PLCB, or the Governor's Office? (Does this guy know something?) Conti ducks it by saying it followed the same track as the courtesy contract, a track that he already questioned the effectiveness of, but said it was legal. Okay...so you heard it here: Conti is implying that there is no questionable connection between the PLCB or the Governor's office and Simple Brands LP, James Lesser president, of Bala Cynwyd, the only bidder on the contract, according to news stories on this project.

Now read this. Pittsburgh's ABC affiliate, WTAE, breaks the story: there is a Rendell-Simple Brands connection. "Two of the main investors with Simple Brands have given Rendell nearly a half-million dollars in campaign contributions." And Joe "CEO" Conti is right in there pitching it.

[WTAE reporter Paul] Van Osdol: "Any concerns about the perception that might be created from something like this?"
Conti: "As I said, of course, we're concerned about the perception. We understand the nature of your question and we understand why you're here today, but we think we -- in an abundance of caution -- went through a very fair and open bidding process."
Van Osdol: "Was it really fair if there was only one company that responded, and that company was the one that made the original proposal?"
Conti: "It was a very fair and open bidding process."

Sound familiar? Sound just like the "courtesy contract" the PLCB awarded to the company owned by the husband of a PLCB regional manager?

What does it take? How long are we going to continue to put up with this crap? We're told one of the reasons that privatization is a bad idea is because private businesses often defraud the government. Hello? Obviously that argument's a wash.

The kiosk idea is a dopey one -- stick your whole arm into a machine to buy a $15 bottle of wine? -- and the kiosk contract stinks like roadkill in August. It's time --past time to write your legislator and demand that privatization of liquor and wine sales in Pennsylvania be put on the legislative calendar immediately -- or at least, as soon as they've managed to pass a damned budget. The system is antiquated, the system is stupid, the system is corrupt...but worst of all, the system does not serve the citizens of the Commonwealth. The PLCB Should Be Abolished.

"Unless and until there is a general hue and cry, it is very unlikely there will be a privatization initiative that succeeds." -- John E. Jones III, former PLCB chairman.

Another wine machine, another state

I don't have much to say, just go read this. It's about a different kind of wine machine that's being harrassed by the Oregon Liquor Control Commission. Amazing.

Please note that the Oregon OLCC is every bit as hard-nosed over picayune crap as the PLCB...but this is ridiculous. Please also note that the PLCB wants THEIR machine, which no one else does, while everyone likes the Enomatic machine except the OLCC...is it because it wasn't their idea?

Monopolies suck. Period.

VOTE in this Pittsburgh Post-Gazette Poll!

The Pittsburgh Post-Gazette has a poll up today about the PLCB's initiatives on automated wine kiosks and "boutique" wine stores (and I'll be blogging about the "progress" on both of those shortly). Here's the question:

Should the Pennsylvania Liquor Control Board implement its plan to sell wine through small boutique stores and machine dispensers?

I'd like to encourage all of you to go vote NO... and here's why. It may sound like this is a good thing: more stores, more ways to buy booze, and wine in supermarkets. But look: this is just another way to make the state booze monopoly palatable enough that you'll keep saying "Well, it's not that bad." It is that bad. We are not children, to have the State tell us that we can't handle selling wine, let alone buying it. This is a retail monopoly of a legal food product. Don't encourage them to expand their franchise! Besides, the "boutique stores" which are actually inside cafes are blatantly unfair to the other businesses who won't get them. Exactly the problem with a monopoly: you don't get the choice, they do.

This is wrong in so many ways. Go vote NO, now.

Update: 73% NO! Thank you, Pennsylvania!

Chairman's Selection? Or Chairman's Dumping Ground?

The PLCB sent out a press release yesterday, heralding the "Biggest Chairman's Selection(TM) Sale of 2009"! In case you don't know by now, the idea of the "Chairman's Selection" originated back when Jonathan Newman was the PLCB Chairman. He came up with the amazingly original idea of using the state monopoly's enormous buying power to secure large lots of great wines at a discounted price, passing the savings on to customers. The program was a big success, as it delivered wine value to Pennsylvanians for the first time since Repeal. Since Newman left, the program has been criticized for losing its way, selling wines of questionable quality at suspicious discounts.

Well, fear not: the PLCB has come clean! Here's what they say about this new sale:

Incredible Savings at Pa Wine & Spirits Stores
Clearance will make room for new wine selections
The biggest Chairman's Selection(TM) sale of the year begins at Pennsylvania Wine & Spirits Stores on Wednesday, July 1, to make room for new Chairman's Selections(TM) wines arriving this summer.
Because this is an inventory-reduction sale, not every reduced-price selection will be available in every store. "The inventory of sale wines will vary greatly by store, and they'll only be available while current supplies last," Short said. "Once these are gone, we are rolling out exciting new Chairman's Selections(TM) for summer and fall."
Specific sale wines can be transferred upon request from one store to another, but a shipping fee will be charged for this service.

Yup. The Chairman's Selection has been reduced to a fire sale. Slash the prices, call 'em "special values," and get 'em off the floor, because you need room for new stuff. The curtain has been ripped aside, and the PLCB revealed for what it is: a government monopoly that doesn't know or give a damn about the products it sells -- or the profits -- just about how to move product and keep the cashflow turning.

Jonathan Newman would be appalled, only he's got a private wine business now...and you can't get his wines in PA. Anyone surprised by that? I mean, what could they call them? The Ex-Chairman's Selection?

Great talk about selling the State Store System

Very good piece in the Patriot News about selling off the State Store System. The only person they could find in favor of keeping it was State Store System clerks' union (UFCW Local 1776) president Wendell W. Young IV, pathetically flapping his hands with the same stale arguments the union has used for years:

1. We won't really make that much money by selling the system (yeah, or by selling licenses to the biggest non-private liquor and wine sales market in the country; sure, pal. Ever seen pictures of the Oklahoma Land Run?)


2. We get $80 million in profits from the system every year (we could take the $1.7 billion estimated as the sale price of the system and put it in a bank at 4% and make $70 million a year forever doing nothing)


3. Tax collection in other states isn't that great because private businesses defraud the government (they're corrupt? What, like that LCE officer that was shaking down bars in eastern PA? Great argument!)


4. The State Store System clerks have only sold to minors twice in the past seven years (that's GREAT news: even underage PA drinkers are smart enough to shop somewhere else...)

There are no good reasons...or even excuses not to sell the State Store System.

"Yee-ha, boys, let's go get us a likker store!"

Is this great? Or is it pathetic?

A little over a week ago, on May 3rd, I walked into the Wegmans in Downingtown, PA, on my way back from the Sly Fox Goat Races. I bought some cheese, some fruit, milk, dishwasher detergent, and something else...can't remember...

Oh, right. Beer.

I went into a supermarket in Pennsylvania and bought a bottle of Brooklyn Local One (Yes, I know, I should have bought Victory, or at least a Pennsylvania beer, but I just wanted a Local One. Sue me). I got one bottle, paid for it, and walked out, thinking "Look at me, I just bought a bottle of beer in a supermarket in Pennsylvania! The new world has dawned, we are free!"

Big deal. I still don't understand why this is, or was, such a cause for alarm and celebration. It's nothing new. I bought single beers at the Ashton Market in Upper Darby over 10 years ago! The store had about 400 different beers, and I did a two-page beer newsletter for them. It was a small grocery store with a deli counter in the back that did take-out sandwiches, but it wasn't a restaurant: it was a grocery store.

Look, kudos to the PLCB (yes, I really did say that, give me a second to explain): they got this right. When Wegmans and Sheetz applied for their licenses and laid out how they were going to sell take-out beer in their stores, the PLCB approved it. Because it was legal. As they love to point out, they just enforce the Almighty Liquor Code. It wasn't the PLCB that was holding us up. It was the conservative nature of Pennsylvania politics (and retail; you notice that Wegmans is an out-of-state company), a lack of imagination, and the Pennsylvania Malt Beverage Distributors Association, who sued to keep those licenses from being granted.

But that is just about over, appeals exhausted (and a lot of good beer money wasted on lawyers who should have advised their clients better). Which will only mean that now you can buy beer in large grocery stores. That have spent wads of money to buy a restaurant license.

Beer is groceries. See my previous post (which applies every bit as much to beer as it does to wine and spirits): why does this stuff even need to be so heavily regulated? Lighten up. This is not about control. This is about entrenched interests, it's about business. Why not make it about the consumer -- the voter, the taxpayer -- once in a while?