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?


Rich said...

"Knowledgable" employees, the level of their knowledge of the store products, and liquor in general is questionable, and has been questioned on this blog in the past.

Zero can they make this claim when they don't do compliance audits. We could make the argument that private enterprise would have better carding habits and stricter rules due to the amount of money they could loose if they have their license revoked.

Now go have a beer said...

How about the part of the video that illustrates the different public services are funded, and the image to accompany the spoken word "police" is one for liquor enforcement rather than normal police? I would guess that a lot of people would say that having liquor control police is an unnecessary service.

As for public v. private, I am almost certain that you wouldn't go along for ideological reasons, but why not just open up the market to private stores that aren't limited to the state product listings and leave the public stores in place? Give customers other choices so they can get wines and spirits the state stores don't carry, and let customers decide where to shop, public or private.

Don't abolish state stores, just take away their monopoly. That is the simplest and most practical solution. Yes, if you were starting from scratch, not having Commonwealth stores at all might be the simplest, but that's not where Pennsylvania is now.

Lew Bryson said...

I don't necessarily have a problem with that idea, Bob. The problem is that the state would probably still be the wholesaler, so they would largely determine what the private stores could buy and at what price. Not going to work well.

However, if we don't get privatization, breaking the "you must buy in Pennsylvania" part of the monopoly wouldn't be a bad consolation prize. That's incredibly galling to those of us who live hear the borders, to have all that choice and be legally prohibited from it.

I'm curious, though: why do you seem to support the gov't-owned stores? Are you simply anti-privatization?

Now go have a beer said...

No, I don't _support_ the state stores. Apart from the antiquated "control" mentality, I see no particular _necessity_ for the government to be in the business of selling private goods.

As I said in the earlier comment, if you were starting from scratch, there would be no good reason to establish a state system for selling wine and spirits (or beer). But you _do_ have a state system now, and private store advocates are running into a lot of opposition to completely abolishing the current system, in part because of the disruption it would cause, particularly for working people who (regardless of what you might say about some clueless clerks, who might be just as unknowledgeable about products if they were working in private stores) bear no personal responsibility for the stupidity of the current structure. They just want to go to work, do their jobs, and make some semblance of a decent living to support their families. Remove the threat represented by complete abolition of the stores, and it would seem that much of the opposition to the idea of allowing private stores would diminish substantially.

I've never spent any real time as an adult in Pennsylvania (an occasional connecting flight, or drive past Erie to get from the Northeast to the Midwest doesn't count), much less ever dealt with your Commonwealth stores. So I'm personally in no position to judge how bad they are and don't doubt what you say about them. But I don't necessarily see that all state liquor stores have to be awful. As a kid, I recall on several occasions my parents stopping in Vermont to buy liquor at state stores because it was cheaper than in NYS. (I also recall occasional news stories about State Troopers attempting to enforce stupid laws about crossing state lines with alcohol purchased elsewhere.) And I am also aware that crossing from Massachusetts into New Hampshire to buy booze was also popular for people who didn't live far from the state line. (And I have at least one recollection of our stopping at a rather large state store in Portsmouth while driving back to NYS from a vacation in Maine.) So perhaps state stores aren't uniformly such a bad thing for consumers, it just depends on what state.

I don't have much experience with these as an adult, so I can't speak from personal experience. Where I have encountered the government stores has been in Canada. Generally, provincial control over beverage sales sucks, compared to what I'm used to. Nonetheless, there is considerable variation between provinces. The difference between buying beer in Ontario and Québec, for example, is like night and day, and I was actually favourably impressed with some of the SAQ stores where I've shopped (particularly in more remote/less populated areas where I suspect they offered a lot more choice than a private store might have). And it also doesn't hurt that you can also buy beer in grocery stores in Québec. Nova Scotia and New Brunswick, not so great, although I understand NS now has some private stores. It's been a long time since I've been in Manitoba, but that wasn't very good at all (although I recall that they had drive-through places, presumably private, though I would also guess heavily regulated, where you could buy cases of swill fairly easily). BC isn't so bad, and from what little experience I've seen of private stores there (I had to check out a couple just out of curiosity), BC Liquor has had a better beer selection than the private stores. I've been to Alberta only once, but I wouldn't say that the private stores where I shopped had substantially better selection than what I would find in a BCLiquor. In any event, there can be state-run systems that can do a decent job, and others that are horrible. My biggest objection would be to their having a monopoly and restricting consumer choices.

Lewis Houghton said...

"Here in Pennsylvania, If you want to buy wine or liquor, you CAN go to a wine or spirits shop."


You MUST go to a wine and spirits to purchase liquor in Pennsylvania

Anonymous said...

@ Rich.....PLCB does do both financial and compliance audits. I am one of those auditors.

Lew Bryson said...

Anonymous, glad you stopped by. Maintaining your anonymity -- which I can understand -- can you enlighten us on just how compliance audits are done? I'd do a FOI request, but they're pretty demanding on asking for particular documents, and I don't know what to ask for. Thanks!

Anonymous said...

He has gas. response to the sound the stand alone clerk makes..

But on the serious note get rid of the system it is evil, open the state up it will make more money, their will not be any over head to pay for that alone is a savings to the state. They paid to much money for their job. I knew a guy that work for them,not once did he step inside that store to work, but he got the 25 years you need to pay for his health benefits, by the tax payers of pa. But their are more people like him in this system. So yes get rid of this system. Get a real job...

Now go have a beer said...

Lew, a possible model for your "consolation prize"?

Vermont's personal import limit:
8 quarts of booze, 6 gallons of beer or wine.

It's not enough to bring in a keg (other than a 1/6 bbl), but otherwise seems adequate, if they have to insist on controlling it at all.

I wonder, though, it does say "a person may..." not the total amount that may be carried in a private vehicle, if you get the drift....

Lew Bryson said...

That's no model for me: why do we have ANY limits? NO limits on personal importation.

Anonymous said...

I'll give you the short version. After that feel free to ask questions. Our audits consist of many different things.

We start every audit with a sample inventory (usually 50 codes or 4% of the codes carried by the store which ever is greater). Criteria is based upon sales volume, dollar value, and auditor judgment.

We also complete a scan test where we sample a minimum of 30 codes. This shows whether the store has been keeping up with price changes. And ensures that customers don't get over or under charged.

We also sample voids, returns, minor challenges, licensee sales, inventory breakage, cash overages and shortages, and we also review store losses.

For voids, returns, minor challenges, inventory breakage, and licensee sales we select a sample from every sales period. We check for procedural compliance for each of the above.

Store losses are determined by inventory shrinkage (breakage, and proven shoplifting are not included in this calculation). To make this calculation take sales and multiply by 0.0005%. (ex. 1,000,000 in sales means that a store is allowed to lose $500).

Every cash overage or shortage over $50 is researched in an attempt to determine what caused it.

Any questions or if you want further information just ask.

Albert Brooks said...

The compliance is if the BLCE does checks on the PLCB stores. According to the PLCB spokesperson, they do not.

I'd like to see the list of things that went DOWN in price and not because of being closed out or discontinued.

Now go have a beer said...

Lew, on the topic of personal importation, sure, in something more closely approaching an ideal world, no limit on personal quantitites would probably be a good thing.

But I was somewhat impressed that a "control" state would acknowledge that it is reasonable for someone to want to bring home something that might not be offered for sale in his/her home state. Granted, that's Vermont, where a lot of things are more reasonable than a lot of other states ;-) It's certainly much better than zero import into Pennsylvania. But not only that, it's also more generous than the law of the state where I live (not a "control" state), where personal importation is limited to "household goods" for someone who is moving into the state, or 4 litres tax-free from a foreign country (or 16 litres for military returning from a foreign country), and personal importation of liquor and wine (not beer) is otherwise prohibited. I'm not aware that state police are doing checkpoints at the border to enforce it, but that's the law here, and I submit that Vermont's is more favourable such that it would seem to qualify as the "consolation prize" you suggested.

Lew Bryson said...

If we're going to fiddle with the state booze laws, let's make them RIGHT, not half-right. No limits. High booze taxes next to a state with substantially lower taxes are simply a subsidy for smugglers. No limits; why should we have limits?

Now go have a beer said...

And which states have "no limits" now? Good luck with that quest to have your state (commonwealth) immediately rise from being among the worst in that respect to doing a better job than any other state is now.

And while you're at it, maybe you can work on getting rid of the worst aspects of three-tier.

Now go have a session beer, or a lot of coffee ;-) (Just don't mix them or you might piss off some other regulator.)