PLCB toots own horn, shows amazing knowledge of market

Just got this off my daily email from Shanken News Daily:

After Record Year, PLCB Chairman Says Premiumization Will Be Key To Further Gains
Following yesterday’s announcement of a 4% sales increase to $1.96 billion in the year through June at the Pennsylvania Liquor Control Board (PLCB), chairman Patrick “P.J.” Stapleton III told Shanken News Daily that future growth will depend on consumer trading-up patterns. “In the past year, most of the growth came from the premium to budget level,” Stapleton said, adding that he hasn’t seen much premiumization in recent months. Still, the new fiscal year has started off strongly. “The first weekend of July was very encouraging,” he said. “On a same-store comparison with last year, we were up 8.3%. So there are signs that we’ll have another very good year, but the extent of that will depend on consumer buying patterns and whether they’re willing to trade up.”
Pennsylvania overtook Michigan as the top spirits control state in calendar 2010 and remains by far the largest control market for wine, which accounts for around half of its dollar sales. The PLCB’s Chairman’s Selection premium wine program—up 19% to over $50 million in the fiscal year—is growing in popularity. Chairman’s Selection wines range from $8 to over $100—with wines normally selling for $20-$50 often discounted to between $10-$15 within the program. Stapleton said the $10-$15 range continues to be the sweet spot for wine market growth in the Keystone State. He added that the PLCB has abandoned plans to extend its supermarket wine kiosk program into spirits, acknowledging that the kiosk initiative has had a “rocky road” so far.

Let's parse this. The PLCB is making much of their 4% sales increase and record "contribution" to the State's General Fund. Of course they are, they know they're in deep crap, and "revenue" is like shiny bits of glass and tasty pieces of bacon and chocolate to legislators: irresistible. This ignores that the State Store System has the humiliating advantage of the Police-Enforced Monopoly to force us to buy whatever they put out there, and also ignores that PA's liquor and wine taxes are bizarrely high (have a good look at that report; we'll be talking about that soon, too).

Then, "premiumization"? Jeez, PJ, are you behind the freakin' curve again, or what? Premiumization's only been the biggest news in spirits for the past ten years, y'know? Once again, the PLCB is wickedly late to the game.

Hey, here's a thought: given that the PLCB doesn't seem to know squat about selling, maybe the sales are at a record because inflation continues to drive up prices, the monopoly is still firmly in place, and the economy has recovered somewhat in PA (and alcohol was not severely affected by the recession to begin with)? Hmmm? Show me what the PLCB has done -- other than the brilliant kiosk program -- to earn any kind of praise for what largely looks like an act of nature, and I'll consider it. Face it, PJ: Pennsylvanians buy from the State Store System because they have to. They have no other choice. If you can't make money at that, you might as well practice law.

Guess people want to know!

I honestly find this hard to believe, and I'm sure it will correct itself soon, but...the blog-rating service Wikio has started a segment for spirits blogs, and somehow..."Why the PLCB Should Be Abolished" came in fourth. Sweet. Thanks for reading, and spread the word. Things are starting to move, there are competing ideas for privatization, and we may have a great idea for a mass public movement to dramatize just how serious Pennsylvanians are about privatization. Stay tuned!

1	Alcademics
2	Imbibe Unfiltered
3	Off The Presses
4	Why The PLCB Should Be Abolished
5	RumDood.com
6	What Does John Know?
7	Underhill-Lounge
8	The Cocktail Chronicles
9	Mixology Monday
10	Drinkhacker.com
11	Liquidity Preference
12	Jeffrey Morgenthaler
13	The Chuck Cowdery Blog
14	Kaiser Penguin
15	Looka!
16	Tipsy Texan
17	A Dash of Bitters
18	SLOSHED!
19	Beachbum Berry
20	cocktail virgin slut
21	drink dogma
22	Cocktailians
23	A Mountain Of Crushed Ice
24	Blogging Tales of the Cocktail: 2010
25	Dr. Bamboo
26	Caskstrength
27	MC Slim JB
28	The Dizzy Fizz
29	Drinks for the House
30	Spice & Ice, and more...

Ranking made by Wikio

Or Maybe Not: privatization bill coming soon

Okay, maybe I got carried away. Because I wrote to Representative Taylor after my last post, and asked him why he was giving the PLCB what they wanted, their "False Dawn Initiative," the "alternative to privatization." I was despondent. Then I got this response, and I feel all better. Check it out:

"At this time, Representative Turzai has not introduced his privatization bill. I fully expect this bill to be introduced within the next 10 days."

I almost forgot to read the rest of the letter. Here we go, people, here we go. Are you ready to do something? Are you ready to write your reps (and copy Taylor and Turzai and the Governor), are you ready to go to Harrisburg? Are you ready to take part in a civil disobedience demonstration against the unAmerican Pennsylvania booze sale monopoly law that could get you fined or even taken to jail? More to come.

Taylor Privatization Letter June 23

And I thought Joe Da CEO was clueless...

Check out this tone-deaf defense of the wine "kiosk" debacle by PLCB Chairman PJ Stapleton in today's Inquirer.So much amazing stuff here, like this: "it is worth remembering that Wegmans made an investment with full knowledge that the kiosk reached far outside the face-to-face customer service Wegmans was accustomed to providing." So it was Wegmans' fault that the "kiosks" were so far to the left on the customer service bell curve that you couldn't see them with binoculars; they knew that these machines were supposed to operate on their own and should not have been surprised by that. Got it, PJ! Wegmans is crazy! (Well, except...the "kiosks" didn't operate that well on their own, which is probably what surprised and eventually seriously disappointed Wegmans.)

More? How about this petulant foot-stamping: "The wine kiosk was evidence of innovation at its finest, something the wine and spirits industry had not seen before. This made it an easy target for criticism." It clearly was not "innovation at its finest," since it didn't work the way it was supposed to. It was a kludge, an ATM welded to a soda machine, bolted to a security camera, with a breathalyzer duct-taped on the front (note: that was sarcastic, and no actual duct tape is used in the "kiosks." I don't think so, anyway). That's what made it an easy target for criticism...which both Wegmans and the Inquirer recognized. Not to mention...it was unnecessary "innovation," since there's already modern technology available to do what the wine "kiosk" was supposed to do, and do it better: it's called shelves.

Then he winds up with this whiny crap: "...what we could use is fewer inaccurate political attacks and more productive discussion and action on behalf of all Pennsylvania consumers." First: not political. It's an unpopular bureaucracy. No politics involved. Second: not inaccurate. Wegmans said the "kiosks" didn't work and made their stores look bad. They demonstrably didn't work as advertised, and that definitely makes the stores look bad (not to mention, taking up valuable retail space while they weren't working).

Finally, what would be "more productive discussion"? They give PJ space with a straight face, and that's not the first time the PLCB has been allowed on the editorial page. The PLCB doesn't want to discuss this, they want to keep doing what they're doing. Sorry, no longer on the agenda. Privatization hearings are coming, PJ: put on your dancing shoes.

And be sure to read the comments. Wow. Hope these people write their reps with anger like that.

Is Privatization Bad for your Health?

The guys at Freakonomics have always struck me as a bit too quick to jump on the anti-alcohol wagon; sure, there are valid points to be made for the social costs of alcohol abuse, but the numbers that are out there would really benefit from a closer look. But this piece was handled more fairly, I thought, even though the big quote from the Herzenberg study overweighted things a bit.

Thing is, as the comments pointed out, the whole argument that privatization increases consumption is quite likely a flawed one, based on questionable methodology: "retail purchase" is a reliable substitute for "consumption." That sounds okay, till you consider how many Pennsylvanians cross the Delaware, Maryland, and New Jersey borders to buy caselots of booze. Look, if my DAD did it, I know plenty of other Pennsylvanians are doing it. Hell, I'm in Kentucky right now, and I have four bottles of bourbon that I can't get in PA in the car (Old Fitz BiB, Heaven Hill 6 Year Old BiB, and Charter 101 (the 4th is a surprise for someone, but trust me: it's not available in PA!); I'm planning on giving them all away before I return to PA, though...).

It doesn't even pass the "straight face test," to use a popular Washington phrase. If consumption in these newly privatized states and provinces were really up by 48%...where's the corresponding increase in alcohol-related problems? Because there is none. We're being sold a sack of crap again.

Republicans Selling Privatization Down the River

I hate to say this, but privatization may be dead...again. And to my deep disappointment, it's the Republicans in the state Legislature who are killing it. Check out this action in committee this week:

o HB 260 (Rep. John Taylor, R-Philadelphia): Allows the Pennsylvania Liquor Control Board to implement customer relations marketing programs to offer incentives to customers, extends the Sunday closing time from 5 p.m. to 9 p.m., removes the limit on the number of stores allowed to operate on Sundays, increases the range of fines for minor violations of the Liquor Code from between $50-$1,000 to between $100-$2,000, and increases the range of fines for major violations of the Liquor Code from between $1,000-$5,000 to between $2,000-$10,000.
o HB 1356 (Rep. Scott Petri, R-Bucks): Allows the Pennsylvania Liquor Control Board (PLCB) to hire employees outside of the Civil Service Act, allows the PLCB to establish a classification and compensation for these employees that shall not be subject to the Administrative Code, and allows the PLCB to purchase all goods and services deemed necessary at its sole discretion.

Let me translate that for you. HB 260 will let the PLCB offer coupons and 'membership' programs, open all their stores till 9 PM on Sundays, and dump more money into the PLCB's budget through fines (fines that are, I'd remind you, imposed by what amounts to an independent system of courts and police). HB 1356 will allow the PLCB to become a total patronage pesthole, hiring whoever they see fit -- under the guise of hiring wine and spirits "experts," experts along the line of Joe Da CEO, I assume -- and buying whatever they want -- more kiosks? more crap vodka brands? more 7' tall bumblebee costumes? -- without any oversight.

I can make it simpler: the Republicans in the Legislature are lining up to give the PLCB bureaucrats everything they asked for to stave off privatization. Why? Cui bono might be a better question. Who got to these guys? Why are they not listening to the voters and citizens of Pennsylvania, who have been consistently polling at over 2/3 in favor of flat-out privatization?


Do you give a damn about privatization? Write your legislator, ask them why they're preparing to ignore the will of the people on this. If privatization goes away this time, it's going to be 20 years before we get another shot at it.

Why prices matter (and why they don't)

First, read this story in the Inquirer (which they picked up from the Harrisburg Patriot-News). It's about prices at the State Stores vs. prices in private stores in border states. Here's a sample:

But a survey of liquor stores in four states conducted by the Harrisburg Patriot-News reveals that prices aren't always better across the state line. In fact, in some cases, Pennsylvania prices are cheaper.
A 750-milliliter bottle of Bacardi Superior P.R. Rum sells for $14.99 in Pennsylvania and $15.99 at Plaza Wines & Liquors in Manchester, N.J. A Yellow Tail Chardonnay is $7.99 in Pennsylvania and $8.99 at the New Jersey store.
Across the border in Delaware, a 1.75-liter bottle of Johnnie Walker Red is priced at $29.99 at Total Wine & More vs. the $41.99 Pennsylvania shoppers pay.

This is a "survey" conducted by the paper. Look, I know Sue Gleiter, I like her. She's interviewed me for stories, including some on the PLCB, but this is kind of sloppy. There's no information given on how many stores were 'surveyed' or how the 'survey' was done. I'd like to see one done like the supermarkets do it around here; don't check individual prices and show me WOW THIS ONE ITEM IS C*H*E*A*P*E*R* AT OUR STORE!!! Fill a typical cart and add up the total (and don't fill it at the PLCB's "outlet stores" on the border where prices are kept artificially low by adding liter bottles at cut-rate prices...that the rest of us in the state can't get). 

Next, read this letter in today's Inky from wine writer (and Pennsylvania resident) Mark Squires. He rips the story a new hole:

A story on May 24, "Pa. liquor often cheaper than in neighboring states," was an example of sloppy analysis and virtual propaganda. Of course, you can find instances when Pennsylvania prices might be cheaper on a particular item. With the 18 percent Johnstown tax, though, prices won't be cheaper overall or cheaper all the time.
In Pennsylvania, you aren't allowed to shop around because the Liquor Control Board is a monopoly. If you find a store in New Jersey with a bad price, you can go to another store. Or to Maryland, Delaware, wherever. Not every little private store may be exemplary, but there can be little doubt that, taken together, private stores win on service, selection, and price.
Incidentally, I was able to find online in about 90 seconds a 2010 Yellow Tail Chardonnay in a variety of stores ranging from under $5 to $6.33 in New York, New Jersey, and Washington, while the writer of the aforementioned article merely found that Pennsylvania, at $8, was cheaper than one New Jersey store.

Dead on the money, so to speak, and the bolded bits strike home to the real problem with the PLCB: the monopolistic nature of it. They have no real competition when it comes to Pennsylvanians, and we are a captive audience, forced to buy at these stores by the coercion of law.And yet...we put up with that, and seem willing to allow legislators like Senator John Pippy run our lives and make our decisions. For God's sake, Pennsylvanians, stand up on your hind legs and act like adults. Tell your legislator that you don't need to be CONTROLLED any longer.