Friday, February 25, 2011

What's wrong with this picture?

Let's play a fun game. First, watch this video from the PA AFL-CIO about why the State Store System is a good thing. Really, watch the whole thing (especially the part where the last State Store worker left standing...makes an odd noise).

Now, how many misleading or flat-out ridiculous statements can YOU find? I'll start you out with an easy one...

1. If the state stores are privatized, PA will lose $500 million in revenue. No, about $400 million of that is taxes that will still come in through a privatized system, just like we still collect sales tax from, say, drugstores.

It's your turn...what else can YOU find?

Monday, February 21, 2011

Why the secrecy?

There's a...'discussion' taking place on the pro-privatization Facebook page in the past couple days about taxes, markups, and the "bottle fee," and one thing that's come out of it is the lack of a straightforward exposition on just how much The State Store System jacks up the price of booze, and how. Which led me to this:
If the State Stores are a PUBLIC business, the markup, bottle fee, and all taxes should be posted in every store as a public SERVICE. 
How's that strike you? Sound reasonable?They keep telling us that the State Stores are an "asset" that belongs to come we know so little about how our business is run? How about a little sunshine, Joe, PJ, et al?

Tuesday, February 15, 2011

Why can't I get Pikesville Rye?

I break the law on occasion. I like Pikesville Rye whiskey, and in the summer, I drink it with lots of ice, ginger ale, and a big squeeze of lemon. It's refreshing and tasty. But...Pennsylvania doesn't sell it, doesn't even offer it on special order. So I hang my head, and duck across the border to Maryland and head into almost any liquor store and pick some up. It's common. I've bought it in drug stores (oh, God, the freedom...). And you know, look: if PA wants the tax, give me a way to pay it, and I will. The stuff is so darned cheap, I wouldn't mind, not really.

So I was pretty psyched when I was in Philly last week and saw Pikesville on the backbar of two bars within a block of each other! Cool, it's finally been 'listed' and I can get some legally. Only...when I got back home and checked their product search page...I still can't. Apparently Pikesville -- cheap, common as dirt Pikesville Rye -- is only available to licensees. You and me? We can't even order it. Because someone in Harrisburg apparently decided that we just didn't need to buy that whiskey. (Okay, maybe not -- see the comments -- but the effect is apparently the same.)

I know this is a little thing, but it's so indicative of one of the major problems with the whole system: a complete lack of options. I'd love to go down the road and try another store, but that's either pointless, or if 'down the road' is across the state line, it's illegal.

Privatization can't come soon enough.

A response from the opposition

As noted earlier, I received some lengthy comments about Rep. Turzai's plan that, although presented as "neither for or against," seem pretty clearly posed to cast a bad light on privatization. No matter: I have always posted comments that are in opposition...but these were just too long, so I asked if it would be all right to copy them into a full post. Permission came (late last week, but hey, it was the weekend, and today was my birthday; I had other things that were more fun to do), so here it is, unedited and -- for now -- without comment, except to point out that Rep. Turzai's bill is only a proposal, and not the only way privatization can happen (so a problem with Turzai's bill is not necessarily a problem with privatization)...and that I apologize that this is so long. It is -- of course! -- "Anonymous." Here we go...

I have dissected HB 2350, Turzai's proposal of privatization. I have a few points I do want to bring to everyone's attention. I am disclosing that I am neither for or against any of these, but wanted to make light of "additional" changes that will be happening. The original bill will be in standard format, the changes will be capitalized unless otherwise indicated.

Point 1:

“Section 211. Enforcement. There is created within the Pennsylvania State Police a Bureau of Liquor Control Enforcement. The Enforcement Bureau AND MUNICIPAL POLICE DEPARTMENTS shall be responsible for enforcing this act and any regulations promulgated pursuant thereto. Officers and investigators assigned to the bureau OR A MUNICIPAL POLICE DEPARTMENT shall have the power and their duty shall be... to investigate.”

This includes both already established licensees such as restaurants, and also new Privatized Liquor Stores. Currently the way the situation works is that a municipality police force can respond to a call at the bar, give them civil citations, and are then reviewed by the Liquor Board to determine if the offenses were localized, or if they violated the liquor code. If any violations of the liquor code are found, the BLCE will conduct an investigation to make a citation which is held pending against a license when renewal time comes around. This new passage gives authority to the municipalities to determine if the liquor code has been violated. Currently, the liquor board can only object to the Renewal of a license based upon investigations by BLCE (with respect to murder/drug), with reference to local citations. The process would not change, but the Board may not be able to justify the refusal of a renewal with the chance that the evidence could be tainted or incorrectly collected if training is not done well. This could mean a costly price for training for the municipality officers (which may come from local funding), as well as oversight of these municipalities. The cost and or ramifications of this should be factored into consideration. We saw this in Philadelphia when the Philadelphia police did not register the complaints of a murder by a licensee, and with no adjudicated evidence, the board was legally unable to refuse the renewal. Now these very same officers will be in charge of determining whether or not a citation justifies an abuse of the liquor code.

Point 2: (All new addition)

“Section 305-A: Discontinuance of wholesale operations by the board and initial franchises. (b)(1)(4)(i-iii) No Applicant may hold more than 5% of franchises within the Commonwealth, and no more than 10% of the Franchises in any one county which has ten or more franchises, and no more than 1 franchise in any once county which has fewer than 10 franchises.”

A point to consider with this is that the "Purchasing Power" the state currently has will be gone. The state will be moving from one (albeit controversial) wholesaler to 100 (305-A(b)-Board shall establish 100 Franchises...granting authority to deliver liquor. I have no stats to support whether or not this will affect the pricing, as we may go from 1 bulk purchaser to 100. There is also a limit to the number of wholesalers within a county, in that there would not be one wholesaler who would be able to operate in more than 5 counties (or 5 in one county) (Pennsylvania has 67).

Point 3: (All New addition)

“Section 310-A Physical Limitations a(1) The premises of each wine and spirits store shall... (allow) the sale of liquor and permitted merchandise.”
In many other states, liquor stores also sell cigarettes, memorabilia, and many other items to supplement their earnings. Such items as wine screws and glasses would be permitted, but other items such as cigarettes/t-shirts, etc would not be permitted. Any struggling store would not be permitted to sell anything other than alcohol and alcohol related (necessary) items. Additionally, no more than 30% of sales can come from non-alcoholic beverages.

Point 4

“Section 313-A (All New Addition)(a) Sale of State Store Inventory. An awarded franchise and license shall grant the successful bidder the opportunity to bid upon the remaining inventory.(B) Schedule of closure. The board shall develop a schedule of closure for State stores, Under no circumstances hall any state store remain open for retail sales beyond 18 months.”

This section states that 1 bidder will be awarded the ability to purchase all remaining stock. Some stores will continue to be open for up to 18 months, resulting in a period of competition between the state and private business.

Point 5

“Section 317-A (All New Addition) (d)(2) Wine and Spirits store licensees may sell wine or spirits between 8am and 11pm on any day except Sunday.(e) Age Limitations - An employee of a wine and spirits store licensee shall be 21 years of age or older.”

While most State Stores are not open on Sundays, there are a few that currently do operate (in the past few years some are authorized to be open on Sundays.) This bill will renew the old statute, and no privatized store will be permitted to be open to the public on Sundays once again. The second clause here will limit the privatized store in their hiring process. Currently through the lcb a person must be 18 years of age (similar to a waitress that serves alcohol.) By having a lower age requirement, wages can often be lower since many of the current employees are part time (intermittent) college students. Based on the new law, this "temporary" work force will not be permitted to be employed by the new stores.

Point 6

“Section 342-A (All new addition) (a) Tax on retail sales of wine and liquor. A tax of 6% is imposed on each retail sale of wine and liquor for on-premises and off-premises consumption by a licensee to an unlicensed person.”

“Section 448 (New addition) A tax of 6% is imposed on each retail sale of malt or brewed beverages for on-premises consumption.”


“Section 401 (all New Addition) (b)... New tax rates (to be collected by manufacturer and/or importer)
$3.50/G wines<17%
$4/g wines>17%
$4.50g sparking wine
$5/g Liquor >17%
$6.50 17%>Liquor<55%
$7g Liquor>55%”

On the first point here, currently when you go to a wine and spirits store, you pay 6% sales tax, 18% emergency flood tax, and 30% mark up. What you do not pay is 6% sales tax on prepared drinks when you go to a bar or restaurant (at least, you are not supposed to be charged.) I was unable to find in the bill whether or not the 18% tax is being repealed, so if it is, please indicate the section for me. But add up the total costs here. 6% sales tax/18% flood tax + private store mark up. Then add the second tax of 6% for any on-premise sale and citizens may end up paying more (and in restaurant/bar) twice for the same alcohol. Furthermore, according to section 448, malt beverages for on-premise consumption would also be subjected to a 6% sales tax.

Previously to the best of my knowledge, licensees (restaurants) would pay the sales tax on the liquor from the state store or distributor, but were not permitted to charge sales tax on the poured drink. So in essence, if the 18% flood tax is not lifted, then by privatization (according to this bill) we as consumer's will be paying an ADDITIONAL 6% tax on alcohol (if you drink both in restaurants and at home.)

As for section 401 with the manufacturer tax. I was unable to find the current rates, however as this is new language in the bill and I could not find prior language, I am assuming here that this is also an increase.Based off this, the only savings that Pennsylvania citizens would see would be if the Retailer was willing to have a profit margin smaller than 30% (or in the case of licensee restaurants, 24%, and with diminished buying power (again, this is arguable and I am not taking sides), we may actually see a rise in prices instead of a decrease.

Again, please correct me with the passage if this is incorrect.

Point 7

“Section 491 (added information) (e) A direct shipper may ship wine on the internet order of a resident into this Commonwealth provided that the wine is shipped to a (Pennsylvania Liquor Store) WINE AND SPIRITS STORE selected by the resident.”

While this does not address direct shipping inter-commonwealth, it does lay to rest the argument of "why can't I get wine shipped to my house." Even under privatization, you will still need to pick up your alcohol at a liquor store, sign for it, and pay all applicable taxes. There will not be direct shipping. Again, I was unable to find the language that deals with inter-commonwealth, and I am unsure if this is meant to cover both instate and out of state transactions.

Point 8: (all new addition)
“Section 495 (c.1) In addition to the requirements of subsection (b) and (c), a wine and spirits store licensee, or the servant, agent, or employee of the wine and spirits store licensee, shall use swipe identification card technology to verify the age of any person who appears to be under 30 years of age.”

Currently, I believe most if not all state stores use this practice. This will not change under privatization. This can be seen as both a prevention of under age sales, or as a hurdle to stores that may feel looking at an ID is good enough. I would imagine that BLCE and now municipalities will be monitoring these systems and signatures more closely.
This will also mean that by law these stores will be required to card everyone who appears to be under 30, and scan their ID, even if they are a daily patron.

I just wanted to bring these few things up to those that read your blog, and to yourself. While you may still hold the premise that privatization is good for the act of privatization itself, it may not pan out the way most people expect. Any savings to the consumer may be a wash with the added sales taxes and manufacturing taxes, inability to hire "temporary" workforce college kids, and Sunday sales (where currently available) will be a thing of the past.

Again, if you find anything incorrect with my reporting please let me know. I will not take offense to corrections if you can find the information.

And that's that. As I said: unedited, and again, this refers to Rep. Turzai's proposal for privatization, which has not yet been through the sausage-grinder. Feel free to comment, or not.

Monday, February 14, 2011

Dopey Case Law Still Gets Enforced...Reluctantly

A friend of the blog sent this back in September -- I was really busy and didn't read it at the time -- and I just stumbled across it in my Inbox, unread. It's an e-mail he got from a Philly-area distributor (that's a beer store for you out-of-staters) about how they got a visit from the LCB (or more probably the BLCE, but I'm not sure) about...selling mixed cases. That's right: not only is it illegal to sell less than a case at a distributor's, they are forbidden by law to sell anything but whole, unmixed, unopened cases. Even if that's what the customers all want. Don't ask me why, I've no idea.

So when these guys got ratted out, and busted...well, they had a crazy response to this crazy law. Read on...

Dear Fellow beerlovers,
In case you haven't heard...we've had a really interesting week! But not in a good way. Last week an LCB officer came into our store. My editorial is below.

BUSTED!!!!A Letter to our loyal customers:
Our competition is so scared of us, that this establishment (not a beer distributor) located in close proximity to our humble store, lodged a complaint with the Liquor Control Board of Pennsylvania, and this "establishment" complained that we mix our own variety pack cases, which is strictly prohibited by the LCBs now arcane laws that fail to keep up with consumers tastes and the times.

The agent from the LCB was extremely courteous, and stated that he really didn't want to bust us or he wouldn't even have come in to check, if weren't for an "establishment" that registered the complaint against us.

[Name of distributor here] believes this is a giant step back for not just us, but the whole industry and it's consumers. We know that we were not the only store engaging in this behavior. The more distributors that do this, the more it becomes accepted and eventually would be written into law.  Now, the LCB will undoubtedly go on the offensive and start checking other places for this "illegal" behavior.
The consumer is truly the loser today.
All we can really do now is go underground, like in the Prohibition days, so if you'd like to get one of our latest Oktober/Pumpkin Variety Packs, please print this email and just tell me your name and state that you are not from the LCB. Yes, it's stupid, but if you have a better idea, I'm all ears. Great beer is a right, not a privilege and we want to be the ones to spread the good word (and taste)!
Of course, I wouldn't want to encourage anyone to break the law, is a rather direct solution!

Friday, February 11, 2011

State Store Stings: a confirmation

As a follow-up to my previous post on whether or not the BLCE ever does "stings" using underage purchasers in the State Stores...I have a partial answer. I wrote to the BLCE and the PLCB about the issue, and just heard back from Stacey Witalec, Director of External Affairs at the PLCB (who has, by the way, been extremely helpful and pleasant over the past month or so; quite welcome). Here's what she had to say.
I checked in with BLCE on this for you and because our stores are not licensed establishments, BLCE does not perform compliance checks in them.
She's going to follow up and check on how many times there have been "issues" at the stores on this and get back to me, but for now...looks like a definitive answer: no, the Bureau of Liquor Control Enforcement does not treat the State Stores like they do private licensed establishments. Which would seem to take a LOT of the wind out of the "we don't serve underage; privatization would mean chaos" anti-privatization argument.

Thursday, February 10, 2011

"PR": please call me

I just got a lengthy series of four comments on Rep. Turzai's proposed privatization bill from someone signing themselves "PR." I didn't post them: not because I disagree, or because I'm censoring them, or anything like that. I didn't post them because they're just way too long for the comments field.

So I'm asking PR: if you read this, could you leave a comment on whether it would be okay with you if I copied those comments -- in their entirety -- out of the moderation notification I got -- and put them up as a regular post on the blog? You raise some interesting points; it's just that they'll look like hell and be hard to read as comments. Let me know.

Tuesday, February 8, 2011

A response to one anti-privatization talking point...

John Rzodkiewicz, who is apparently a State Store employee (at least, that's what he claims on his Facebook profile, and I have no reason to doubt him), has made some well-spoken counters on my pro-privatization Facebook page. I've developed a respect for the man. Recently he posted a link to a piece about the failure of privatization in Washington State (ahem...written by the Washington wine and spirits wholesalers association...), and followed it up with this comment:
Pro- privatization was ahead 85% to15% early on before debate.After some sober analysis the people saw no state has made more money from liquor after privatization, and just said no to selling off their public asset.

I felt compelled to respond, and wanted to share that response here.

John, the problem is, it's NOT a "public asset." It's an out of date, paternalistic anomaly, it is an insult to the character of the citizens of the Commonwealth to think we need to be "controlled," and under Joe Conti it has become an arrogant embarrassment.

"Wine kiosks"?! Questionable "courtesy contracts" awarded to family members of PLCB managers? The public humiliation of the BLCE because of incredibly shoddy record-keeping on beer registration? This is a system that NEEDS privatization to take it out of the hands of the people running it.

Honestly? For me, and for many others, it's not about the money. It's about the ridiculous monopoly. If I'm 15 minutes from my home in New Jersey for work, I'm not allowed to pick up a bottle of wine on my way home? That's not economic, that's unAmerican. And it's the only way the PLCB makes their "profit" -- a piddling 20-25% of the total they continue to claim they send to the General Fund -- by having a police-enforced monopoly that requires PA citizens to buy at the State Stores.

This isn't about the money, the "public asset," for the most vocal opponents of privatization: the UFCW.* It's about their jobs, that's all. Understandable, but this is not a public jobs program; or at least, it shouldn't be. It's a fossil. They can get jobs in the new private stores.

Give US a referendum, John. We'll deliver privatization.

*Again, and again, and again: I am not anti-union. I am strongly in favor of privatization of the Pennsylvania State Stores; that's all. I do realize that would mean the loss of union jobs...but new jobs would be created immediately.

It Begins!

Hearings on State Store privatization in the PA Senate Law and Justice Committee begin on the afternoon of February 14 -- my birthday; guys, you shouldn't have! It's just what I wanted!


Saturday, February 5, 2011

State Store Stings?

I have a Facebook page about this subject, Abolish the PLCB -- Rewrite the Code! (feel free to join, if you haven't already), and there are some serious PLCB apologists who joined and post counters to privatization. I suspect they're PLCB employees (present or retired) or fellow union members, but I have no proof...and my suspicions are mostly based on my incredulity that anyone else would support the PLCB, I'll admit that.

Anyway, one of them was posting a number of news reports (from other states) about sting operations that had resulted in arrests of liquor store staff or owners making sales to minors. This would always be accompanied by crowing about how privatization would bring more sales to minors, and that the PLCB clerks never ever sell to minors. Well, that's probably not actually true, because I've noticed that PLCB supporters have just started saying that there were only two sales to minors in the past 7 years, but that's still pretty impressive.

Only...wait a minute. Just how cozy is the relationship between PLCB store clerks and Bureau of Liquor Control Enforcement agents? So I started responding to all his posts: "Hey, does the BLCE ever conduct stings on State Stores? Just asking!" Never got a response.

To tell the truth...I don't know. Do they? Because if they don''s a meaningless statistic. I'd say I'd like to see it happen, but honestly? I wouldn't, because the way the regs are set up, any PLCB clerk who sells to an underage purchaser loses their job and their pension. I wouldn't want to see that just to prove a point. the absence of such stings, this is comparing apples and oranges. Stick a pin in this balloon.

Thursday, February 3, 2011

Amazing: PLCB apologist is a well-known supporter of the PLCB's wine "program." PWF is a frequent commenter on Philly bulletin boards, where he supports the Chairman's Selections, the Premiere Collection stores, and the PLCB's website; he even has a list of "Philly Wine Rules" to lay out his manifesto (mind you, I'm assuming PWF is a "he," because that's how most wine types in the area refer to him). They are both expected -- Buy Chairman's Selection Wine, Shop at Premium Collection Stores, Use the PLCB Web Site...I mean, duh -- and jaw-dropping: Pay Attention to Temperature and Light in Storage and Serving (translation: the PLCB is dumb enough to keep wine in hot storage and sunlight), Don't Expect the State Store Employees to be Robert Parker and Jancis Robinson (no problem, I don't), and then this bombshell: Cultivate Friends and Family in Other States, which is to say, drink good wines when you're in New Jersey and, what the hell, break the law and bring them home to Pennsylvania. I do it, sure, but I don't really expect to hear that kind of advice from someone who says
We dare you to follow these tips and strategies and see if you don't stop shaking your fists with rage at the PLCB and instead become a convert and frequent shopper of the Wine and Spirits Stores of PA!
Okay, I will, since I don't apparently have to actually buy things there to be a 'convert!' Honestly, these are the kinds of contortions you have to go through to find something good to say about the PLCB's State Store System. It's like finding something good to say about the case law: um...less light damage?

Odd strategies aside, that's not what I wanted to talk about today. No, instead it's about the opening paragraph on that Philly Wine Rules page.
There's one thing that almost all booze swilling Philadelphians (because if you hate the PLCB, you must be a booze swiller) seem to agree on: they all hate the archaic liquor laws and monopolistic system of alcohol distribution administered by the Pennsylvania Liquor Control Board (PLCB). (Yup. He's got that part right.)  Articles, editorials, blogs (Ah. That one would be me), forum posts, and more have nothing but curses and condemnation for the vile agency and its hated rules and retail monopoly. (Actually, that's not true. I have Reasons, and I have said good things about the PLCB. I like the online product catalog, for instance.) Hatred runs so deep that even when the agency tries to do something right (like remodeling the stores or improving customer service) they get slammed (I said nothing about remodeling the stores, and I said the way they went about improving customer service was ethically questionable; as it turned out, the State Auditor General agreed with me). Anyone who tries to defend the PLCB gets called a shill, because, so the thinking goes, no rational person could defend such a dreadfully awful regime without having some kind of vested interest at stake. (Given that most people who do defend the PLCB are either current or retired members of the system, or Wendell W. Young IV, the president of the union that represents the State Store System clerks...I'd say they mostly are shills.)
Well. Someone has a problem. First, I do not think PWF is a shill. He has said on many occasions that he is not related to the PLCB in any way, and I choose to believe him. I'm actually somewhat refreshed to see someone arguing for the PLCB that isn't a shill. That said, PWF's arguments almost all revolve around the Chairman's Selection program and the 'find anything anywhere in the state' website...and when pressed, he simply replies that people can always go across the border.

I can't discuss the Chairman's Selection program; I'll admit that I don't know enough about wine. I've been told by wine lovers that it's gone downhill since Jonathan Newman left, and that it is a dumping ground for old wines and wines that didn't sell elsewhere. I do not know if that is true. I do buy some CS wines myself, and have not generally been disappointed.

(I also buy some of the lowball wines the PLCB has, like the Rex Goliath Cab...then when I tried to buy it at my local store -- good old 0909 -- I couldn't find it, and the clerk I asked about it just shrugged, said, 'I guess we don't have any,' and started talking to another customer without offering to check backstock or telling me there was none. Hard to believe, right? Well...I DID find four bottles in Verona, PA, and the clerk there was great. On the register; I found it myself.)

But the website? Please. It's only possible because it's a statewide monopoly. It's like the case law "protecting" beer; if that's the best you can offer me, I'll take my chances with all the other benefits of privatization!

And running across the border? Break the monopoly, and the State Store System will be a money loser, I guarantee. Because more stores open on the border all the time -- a huge Roger Wilco just opened at the far side of the Burlington Bristol bridge -- and if people aren't worried about getting caught, they'll stream over there. The fact is, it's against the law. You can't argue in favor of a legal monopoly by saying you just skirt it whenever it becomes inconvenient; what about the poor bastards in Scranton, or State College?

The system is archaic and monopolistic. That's why we want to do away with it. And if I'm just cursing and condemning...what's this, PWF's latest tweet?
"cheap way to bash : pick obscure and whine that PLCB doesn't have it when in fact very few states offer it anyway."
A cheap shot, but proof he's rattled. Anyway, fella...I don't need to do that. The PLCB's all target, all the time! The wine kiosks: HA! Even when they work, they're ridiculous. The courtesy contract: ethically challenged and exposed the basic problems with the state-owned retail system. The bottle charge increase: it's on! It's off! It's on! The beer registration raids: enforcement left looking like idiots because the PLCB's registration list was stuffed full of errors. Jonathan Newman, the best thing that happened to the PLCB in years: driven off by the political hackery that has always dominated the PLCB. Joe "CEO" Conti: a patronage plum offered to a politician who wasn't savvy enough to dodge the right way on the pay increase. And on, and on, and on.

Are there good wines for sale at the State Store System? Of course there are; there are so many wines it would be hard to miss. Would a private system offer more choice? Absolutely, because it would offer me the choice to go somewhere else.

Tuesday, February 1, 2011

Senator Pippy: entire liquor code "in play"

Just a quick note: check out this story quoting Sen. John Pippy, chair of the Senate liquor control committee. (Thanks to Purnell Jones for the link.) Here's the money shot:
House Majority Leader Mike Turzai said he does not want to see his bill to privatize liquor sales potentially bogged down by becoming an omnibus liquor reform measure. While he expects to honor Turzai’s desire to deal with privatization in a separate bill, Republican John Pippy, chairman of the Senate committee that vets liquor legislation, said other issues related to updating Pennsylvania liquor laws will be on the table, albeit on a different track.  “All those issues are going to be in play anyways,” Pippy said. “As the chairman of the [Senate] Law and Justice Committee I’ve said we are going to look at everything. I think we need to modernize Pennsylvania liquor law.”
That's right, folks. As the late Senator Donatucci told me after the beer registration raid hearings last spring, we're moving into an activist phase concerning liquor legislation in PA. Things are going to happen. So we gotta push. I've written to my legislators and Governor Corbett (and I'll be talking to my state rep later this week about privatization, at his invitation): get on the line and do likewise!