Tuesday, March 17, 2009

The Conti and PJ Show!

I watched the PCN Call-In with Joe "CEO" Conti and PJ Stapleton tonight. It just wound up, and here's what I took down. I'm scrambling and trying to remember, so I may not have who said what exactly correct, but the gist is here.

Host Brian Lockman (who interviewed me on PA Books, nice guy) went right at them with questions about the courtesy contract. Stapleton first said that the training is "desperately needed" for the employees to perform their jobs. "Desperately?" Really? This is the guy who said training on 'manners' would be ridiculous and unnecessary, because "our employees already are widely regarded as being welcoming and polite to our customers." Of course, he stuck to the line that it wasn't really about manners, even though the first priority of the tasking in the RFP is to "Improve basic customer service skills."

Not sure if it was here, but at one point Stapleton started talking about how the training is also about not serving underage or intoxicated people and said "If it saves one life, that's worth the price." God! I'm looking right at the RFP, the whole list of what this training is supposed to accomplish, and there's not one word about that. The only thing that even comes close is the last one, a catch-all: "Encourage engagement with the PLCB's current agency-wide initiatives; instilling a desire and ability to support these initiatives in interactions with customers and in merchandising techniques." Yet Stapleton made it sound like there would be specific training to save the children. Truly pathetic.

Lockman asks Conti about the possible problems with the awarding of the contract to Solutions 21, in light of the president of the company's wife being a high-ranking PLCB regional manager. Conti says they knew of the issue with the contract, ran it past counsel, and decided it was legal under the state's rules. Interestingly, he wound up by saying that the rules may need to be changed by the Legislature. Indeed. PJ says he feels strongly they made the right decision on the contract, cites the cost. No one questions why it's so low. Bummer.

Lockman asks if the RFP was put out and awarded too fast, as has been suggested by two of the losing bidders? Conti says not, really. PJ says it's standard stuff, and it is, and RFPs go out fast. It's not like teaching someone basic retail -- customer skills, conflict resolution, "embracing organizational change" -- is something earth-shatteringly new. Well...except for the PLCB employees who desperately need it, according to Stapleton. We'll see why in a bit.

Lockman asks Conti, so what have you been doing in two years? Essentially, he's been planning for two years. Strategic store initiatives, new look, new stores, new websites. You know, all that stuff they don't really need to do because they're a monopoly." We will be the specialty retailer we always should have been." Yeesh.

Lockman tosses Conti the cost softball: why are prices higher in the State Stores. Conti rips it up and tosses it aside, saying they aren't higher, except compared to Delaware, and that's because they don't have taxes, those naughty boys. No one ever mentions how well that seems to work for Delaware and the business it attracts. Lockman asks him if the Johnstown Flood tax is really for the Flood. No skin off their nose, that's the Legislature's fault. "The tax is a remnant." Conti dangles the possibility of lowering the Johnstown tax if more sales come in. (But isn't that The Legislature's call?) They repeatedly talk about how much the PLCB "brings in" without ever mentioning that 75% of it is taxes that would be collected anyway under privatization.

Lockman asks what's the Board do, what's Conti do? Stapleton babbles a bit, says the Board makes decisions, and "has the assistance" of Conti. Conti runs day-to-day operations. I guess he does, except when he's planning for two years. He admits the PLCB is a "Prohibition era bureaucracy." Then he dangles more money in front of us: "We want to provide revenues to the general fund so other taxes can be reduced." Oooo! Sure, that could happen, and if it does it would likely be the first time in the history of the state.

Lockman asks, is there a built-in conflict in the agency's two missions? Stapleton says that the stores provide customer service and encouragement for responsible use. "We 'control' the responsible use of alcohol." Wow.

Finally, the first call, from Narberth, I think, and it's the Jose Garces question. Two questions: What's the goal? And what's PLCB going to do to ensure it's fair to other restaurants? The initial concept is to provide a boutique wine experience, wines that aren't available in the stores. "We will be a tenant of his." No liquor served. 600 sq. ft. area next to it. Match and pair wines with foods. It's important to team with Jose Garces, because he's cool and respected. And then, no surprise whatsoever, he completely ducks the fairness question. Nicely done, Chairman Stapleton. The second-hardest question of the evening, and he deftly avoided addressing it. No follow-up.

Conti fields a question from Lockman: what about these wine kiosks. It's ongoing, God help me. "Very interesting." They're going to be using biometrics to determine your age and intoxication! It's 12 - 18 months away from getting out there. Lockman asks, Are the machines more secure than a clerk? Yes, Conti says. Even after this amazing training? Biometric technology to ensure 21 and not intoxicated. "Incredible technology." I'll bet. They will be testing the machines. Moving forward. They could be used in the stores.

Next call: A suck up, just as predicted. Doing a great job, great wines, used to shop elsewhere. The contract: there's always room for improvement. Wow. Amazing. Do you think there will be any calls like this on tomorrow's show with the Attorney General? Hey, AG, great job you're doing putting away those criminals!

Third call: weirdly pissed off person who wants to know how many other contracts on training they've let in the past year? Um, none. Just this one. Even I knew that one.

Lockman asks about selling beer at Wegmans. Had to be asked, but it's a waste of time: they're just administering the Liquor Code. The Wegmans are licensed establishments. Yada yada.

Next call: free drinks at casinos are not a fair playing field for taverns. It is a pure legislative manner, says Conti, and he's absolutely right.

Next call: why are we spending this money? We don't have a choice to go to some other place! People are sick and tired of waste. Yeah, and he was angry. I'm just sick and tired of not having another place to go to.

Next call: just angry. I'm cool with that, because, after all, these guys are not going to make any mistakes that might result in answering a question.

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.

This one smells funny. This is a big, tech-heavy, expensive project. Yet Simple Brands has no website, no web presence at all that I can find, which seems kind of odd for a company bidding on such a technology-heavy project. Anyone ever heard of Simple Brands, or James Lesser? Who's he married to? Who's he know? He was formerly the head of JDL Management, and made retro-fitted Skeeball games with red balls with flashing lights. Great. If you're curious, the contract is here; you can see the RFP and the contract by clicking on the successive PDF links.

Next call: Stapleton and Conti essentially admitted that they hire employees with no real experience or training. Good God. They blame the civil service system they're stuck with. Stapleton says that the future includes "A formal PLCB training academy." Really, he said that. Can't wait to see the bill on that one.

Lockman asks: why are State Store employees paid so much more than clerks in liquor stores in other states? (And they are, I've seen the same report he mentions.) Stapleton appears surprised by this, takes moral high ground by saying they're not ashamed of paying the clerks a living wage. I don't recall Lockman saying that the other clerks were poor, just that the State Store employees were paid a lot more than other retail clerks. Yet on the last question, Stapleton admitted that these were inexperienced employees.

Lockman ask, before Conti was hired, was Chairman was highest position at LCB? No, says Stapleton. The Board is responsible for decision-making. Ah. "Decision-making." That's not important. He says there was no office to oversee all the departments, someone to distill all the info and requests. It's an antiquated system. Yet, Lockman asks, you functioned for years without a CEO, who is now paid 2.5 times chairman salary. Stapleton says the chairman was not running the shop. Who the hell was? And they're about to add three new executives. Wonder what their salaries are.

We get another suck-up call. You're doing a great job and I don't want to stand beside drunks in the grocery stores, thank you, thank you. So...anyone buying off-premise beer is a drunk? But the people who buy off-premise wine and spirits at State Stores aren't? What a fraud call.

I finally get through, and while I'm waiting, I hear someone on the phone asking my question: if things are so good, why are all those stores on the border? They tap dance. The prices aren't really that good, they're only better right at the border, you go ten miles into New Jersey and the prices go up. (So what? I'm not going to go ten miles in Jersey then, am I?) Selection? Those stores don't really have a better selection -- a brazen lie, I'll happily take him to Total Wine and make him eat it if someone can get him to go -- but they're very good at talking you into buying something else. Not just a lie, but nasty.

They said over and over again that the State Stores had such a great selection and served the state so well. Horsecrap. I don't know how they can possibly serve the state that well when the number of stores is about 1/3 the number states of similar size have, and the 'great selection' is all online and special order, many of which you have to buy multiple bottles of. That's not a great selection, that's an annoyance. When they had their little temporary kiosk at the Pennsylvania Whisky Festival, back in November, they didn't even have all the brands available at the festival: you had to special order stuff they knew was going to be there! Ridiculous to compare that to a fully-stocked liquor store.

So when I got on, I asked, look, I see a lot of PA plates in those cross-border stores. Do we know how much in sales and taxes we're losing in cross-border bleed? If it's so great here, why do people go there? They quoted a study they had done -- love to see a copy -- that showed that very few of such trips were 'destination' trips; people weren't going there just to buy booze. And that they still bought 75% of their booze in PA. And they were only losing 3-4% to cross-border bleed. Burying me in numbers that mean nothing if I can't see the methodology.

You know what? I know someone who crosses the border just to buy box wine. They save a few bucks on each box, so they get two or three whenever they go to Maryland. That's not a destination trip, but it's definitely part of the trip. I can't help looking at the concentration of stores across the border and wondering: if there's not much to be made in luring Pennsylvanians across the border, why are those stores there, and why do they continue to run full-page ads in the Inquirer?

And that was it. No surprises. No revelations. No real answers. And some really misleading stuff. I was very sorry no retailers called in...but I'm not surprised.


Rich said...

I called...I got through, I didn't get to ask my question though, because I heard someone ask a similar question about six packs in distributors, etc...they wrote it off as a legislative issue...so I hung up there. I didn't want to waste time and get the same write off. I didn't get to watch the show, I will download it and listen as soon as the archive is posted on the PCN site.

Lew Bryson said...

To be fair, sixers in distributors is a legislative issue. As I've noted, the PLCB doesn't really give much of a damn about beer: they don't make money off beer, not money they can crow about, any way. All they care about with beer is enforcement and punishment. That's why we always get short shrift. Gotta be the legislative route.

Rich said...

Sure, I understand that it IS a legislative issue, but I thought maybe these guys would have more to weigh in on the issue.

You should be keeping track of the number of times they contradict themselves...I'm sure you could come up with a few on just the "happy sales force" training issue.

Lew Bryson said...

They were going to duck every question they didn't have to address, and passing the buck is an easy dodge.

Yeah, there were some contradictions there; tried to point those up in the post.

Anonymous said...

So I guess the real answer to all of this is: They are just there to run a business, a business that really doesn't need much help to run since there's no competition or possibility of failure. For us to get anything accomplished, whether its privatizing the liquor stores, getting rid of the the flood tax, or changing the case law, its all legislation. That's where we need to focus our energy to get something accomplished.

Lew Bryson said...

True. For them, "failure" would be screwing up so bad that the state goes private. But how to get privatization is a two-pronged thing for us. First, yes, we have to get our message to the Legislature. But second, we have to publicize the shortcomings and intrinsic flaws of this system to the citizenry and get more people to get the message to the Legislature. This courtesy contract controversy is pissing people off, which means it's a good time to strike. Write!

TC said...

On the issue of the massive selection of the state stores:

Frankly, I think it's cruelly misleading to say that the selection in PA includes 20,000 different bottles, or whatever. I'll believe that if you were to visit every store and count the different bottles, plus the online only selection, you'll find a huge array of bottles. However, the average store, at least, in the Philly area, has NOTHING like that. My closest liquor store (2nd and Girard, Philly) doesn't carry a bottle of brandy that costs more that $15 (Ernest and Julio Gallo's X&O, if you're curious). Similar claims can be made about the rum, bourbon, vodka, and wine selections: they're lacking, to say the least. What they have there is cheap, lowest common denominator stuff. North of the store is a fairly poor neighborhood (Kensington) and Philly's next gentrification target (Fishtown). South of the store is well off (Northern Liberties). The selection, from my point of view, is strictly to appeal to those who drink for alcohol, and not for taste.

And it's not like 2nd and Girard is an anomoly. The liquor store at my parent's house, in Wayne--as well to do an area as you'll find--is better, but not by much. It's mostly the same selection of plastic bottled booze, though now with a couple of gems in there. Of course, when I was in high school, we drank liquor instead of booze because the beer distributors carded (and collected fake IDs), while no one at the state store did.

The program was frustrating to watch. I wish Lockman had taken the initiative to hold their feet to the fire a little more, asking follow up questions and not allowing them to evade the initial questions the way they did. But, oh well.

Anonymous said...


That is the link in case anyone wants to sit through it. I could only make it about 2/3 of the way.

How in the beginning can they emphasize that they have procedures that the private sector doesn't have to prevent serving underagers (what ever that means) and then say that they need this new training program to prevent it. Also isn't that what the mandatory RAMP training program is already in place for?

Lew Bryson said...

Wrong link; that's digital/analog TV. This one works for now:

Anonymous said...

Thursday April 2 the new name will be let out of the bag for state stores

The new name is Table top or Table-Leaf

Julie M said...

To expand on the topic of selection...
I just had a moment this weeked when trying to purchase a Rose from the outlet (what makes it so? the prices are the same) on Snyder for a wine tasting that I had set up wtih my tasting club. Not only was the choice horrible (2 in the whole store, and only one from teh Rhone), but the inventory was pathetic. I wondered if it was an Easter rush (?), or if the State Stores are experiencing the same financial hardships as other retailers (see Fosters for low inventory too).

I decided to try another store on 11th (and Tasker?), but the same problem arose. Disgusted, I jumped in the car and forced my husband to take me to Total Wine in Delaware. For a trip like that, you stock up, so I did get 3 more bottles of wine and 2 six-packs. So HERE I AM - A LIVING EXAMPLE OF SOMEONE WHO LEFT THE PA STATE STORE TO SPECIFICALLY BUY A BOTTLE OF WINE (I wasn't even all that picky) FROM TOTAL WINE IN DELAWARE. Good going PA, you lost that sale plus lots of others in the future I'm sure.

Lew, if you were looking for more minions to take up the cause, I'm here. Just tell me how to help...