Thursday, December 10, 2009

Bill to Abolish State Liquor Stores to be Introduced in January!

Holy crap! Can you believe it? Just saw this today, and my head exploded.
Lawmakers are introducing a new measure aimed at getting the state out of the booze business.

Senate Democrat Tim Sheldon is proposing the state privatize liquor sales. "Immediately, you would save the $53 million or so that it costs to operate state run liquor stores with state employees. This is a luxury that we can't afford in our state."
Sheldon said the system can be set up just like in other states that allow liquor sales in grocery and convenience stores.
The liquor control board would continue its enforcement efforts. "It could be done in a very safe, controlled way using the private sector outlets. The taxation would still be collected by the state, the regulation would be made by the state," said Sheldon.
The proposal will get its first vetting when lawmakers return to Olympia in January.
 Wait, what? Olympia? Oh, bummer. This is about privatizing the state liquor stores in Washington. Damn.

Doesn't Pennsylvania have one legislator like Tim Sheldon? No, instead, what we get are guys like Representative Neal Goodman (D-123, Schuylkill County, pictured to the left), who recently said in the Pottsville Republican-Herald when asked about the prospect for beer sales in grocery/convenience stores and gas stations: "This is something the LCB (Liquor Control Board) would have to drive. I don't think this would be something legislatively-driven. This is a debate I'm willing to have ... but it really needs to be thought out thoroughly." That's why I really worry about the caliber of legislator in this state. This is not something the LCB "would have to drive." The PLCB has already done a lot towards allowing this kind of thing; they've granted licenses in a surprisingly liberal manner to Wegmans, Giant Eagle, Sheetz, and others. This is one area where I've got nothing but praise for the PLCB. They've been ready for years, and they're pretty clear about it:
The Pennsylvania Liquor Control Board said groceries and convenience stores could have offered beer decades ago.

"The market changed. The law has not," said Nick Hays, a spokesman for the PLCB."The Pennsylvania liquor code does not address whether supermarkets may or may not sell alcohol. It doesn't permit them; it doesn't not permit them."
Hays is right: it's the code. Which, Representative Goodman's limited knowledge -- or deliberate obfuscation -- to the contrary, is something that has to be changed by the Legislature.

There's no need to bury it in a committee for thinking it out thoroughly, either (like they did with that "sixpack law" we were supposed to get two years ago). We've thought it out thoroughly, time and time again, and then nothing gets done. Which has nothing to do with the "thought out thoroughly" part, except the bits that deal with the political calculus. Your legislators want to please you, but mostly they don't want to piss off industry groups like the tavern owners or the beer wholesalers. The whole purpose of this blog is to change that equation.
Readers...if you're an interested citizen, write your legislator. It's easy, go do it (type your ZIP code in the box, and you'll get e-mail contact to Da Gov and your state legislators). If you're a reporter, please, please, please, take my ideas, take my passion, steal it with no attribution, but use it. Hammer at this ridiculous system, at the convoluted crap of The Almighty Liquor Code, at the entrenched stalinist edifice of the State Store System, at the arrogant monopolist attitude of Joe "CEO" Conti, at the wasteful and questionable spending on the Courtesy Contract and the Great Table Leaf Re-Branding.
Because the time is as ripe as it has ever been. Yuengling COO Dave Casinelli nailed it recently: "Ultimately, the consumers will speak," he said. "There's a groundswell out there. Both sides are kind of a stand-off right now." Damn straight. Why should Washington have all the fun?


Frustrated_in_PA said...

And another:

"It's something I need to learn more about," state Sen. David Argall, R-29, said."

What is there to learn? Don't these guys live in PA?

Lew Bryson said...

Seriously. Here's a thought. Go to a bar, ask the customers. Go to a distributor, ask the customers. (The owners will be sure to tell you their opinions.) Go to a booze store just over the border, wait by the inevitable car with PA plates, and talk to the owner. You will learn much of what you need to know. Then get a copy of The Almighty Liquor Code, read it, burn it to ashes, and start over.

Jeff Bearer said...

Question for you Lew. If I recall correctly the state of PA is the second biggest alcohol buyer in North America.

Does that mean that they are able to leverage bulk buying and the prices to the consumer might actually be lower now in a state store than if liquor and wine sales were privatized?

I presume that competition is always better than a monopoly even if it is a monopoly of the people, by the people.

What are the price differences before tax on liquor in PA and NJ?

Lew Bryson said...

Correct, Jeff: the PLCB is second only to Ontario's LCBO, another government monopoly. That does mean that they are able to leverage bulk buying. For years, they did not. Jonathan Newman worked that harder than in the past, or at least, that's what was reported. But there are a couple things working against lower prices. The state has a set mark-up of 30%; private enterprise would be free to lower that, make it a sliding mark, whatever. Note also that because the mark-up goes on before the Johnstown Flood Emergency Tax and the state sales tax (that's right: tax on tax) are applied, so its effects are increased. The state pays its unionized clerks on the very high end for retail clerks, offers them health benefits and a pension; I'm not against a living wage, but chances are a private liquor store would not be paying on the high end of retail wages. So there are some fairly hefty forces against less expensive booze. Competition among private liquor stores -- including, one assumes, newly legal competition across state lines -- would tend to drive prices down.

Price difference because of tax are very hard to pin down. First, you're comparing a state monopoly to a myriad private stores: which prices do you compare? Second, PA's liquor tax is an odd one, in that it's a flat percentage on the wholesale cost. Many state taxes (including, I'm pretty sure, NJ's) are based on proof per gallon. That makes bulk booze -- cheap tankers of vodka and boxes of vino -- cheaper in PA. But it also makes the higher-end stuff more expensive: NJ is taxing on the alcohol, PA is taxing on the price...three times: the markup, then the Emergency tax on that, and then the sales tax on both of those. It's just not apples to oranges.

That's a large part of why I say it's not just that we need to abolish the PLCB. We need to rewrite The Almighty Liquor Code. Badly.

Anonymous said...

The Goodman family was big in the PLCB for many years, with his father being head of it at one time i think( not 100% positive on that, but pretty sure), and Schuylkill County always being well represented on the board.So take that info however you choose to.And as a guy who spent 30 years in a beer distributor,there is the factor of a distributors license losing all its value, though i realize that's the way of progress.

Lew Bryson said...

I don't see why a distributor's license has to become valueless: how about something like they could be converted to a full-alc retail license for a one-time fee, lower than a new full-alc license and without going through the hoops a new licensee had to?

Anonymous said...

This is the problem with writing your opinion to the Governor - I did that, Ed's office forwarded it to the legal dept of the PLCB. They wrote back saying "we just enforce the laws, if you want us out of the liquor business or to be able to buy beer in a grocery store, write to your elected officials." yeah, I did that. Thanks Ed for the runaround!

Frustrated_in_PA said...

Another in-touch official (insert appropriate sarcasm emoticon):

"Any change in the Pennsylvania Liquor Code is likely to take years, according to state Rep. Todd Rock, R-Mont Alto.

Selling beer is a complicated, big business, he said.

"I'm certainly not at a point where I can take a position on this," Rock said. "I need to spend more time in research."

I guess he is right that it'll take years, especially with how little these guys know about their own state.