Monday, March 28, 2011

Debating PJ Stapleton on Privatization

If you didn't catch me on WHYY's Radio Times show this morning, well, I think it went pretty well. They did a show on the PLCB's desperate attempt to stave off privatization -- and despite what PJ Stapleton said this morning about they're just an agency, not trying to shape the debate or anything, it's very hard not to see this burst of ideas to make the PLCB suddenly more like a private system as anything but a desperate attempt for everyone to keep their keeping us under their thumbs.

Stapleton wants more stores open on Sundays, for longer. He wants more wine kiosks in stores. He says he is in favor of home delivery of wine (watch carefully, though: that one promises more than he can deliver). He wants the PLCB freed from civil service requirements so he can hire wonderful people who love wine! It's this program that I think I'm going to call the FDI: the PLCB's False Dawn Initiative. After Stapleton laid it all out, they brought me on to lay it all waste.

You can listen to the show here. I came in about 15 minutes into it, a replacement for Senator Turzai, who's spearheading privatization in the Legislature, but couldn't make it today. Like I said, I thought I did well, but there were so many things I just didn't have time for! Like all this:
  •      Lack of choice. Not just what’s on the shelf: there is no other option. I actually did get to this one, but Stapleton either just didn't get it, or was evading it. All he wanted to talk about was the selection on the shelf and the "wonderful" SLO system.
  •      Not enough stores. There are more stores in Delaware, more stores in Chicago alone.
  •      Lackadaisical service. Your training contract is an admission of this.     
  •     No beer. In most other states, you can buy beer, wine, and liquor in the same place.
  •      Unfair business practices. The wine kiosks — sad as they are — are only in stores anointed by the PLCB; Jose Garces is the only restaurateur to have a mini-State Store right in his BYOB.
  •      Unfair business practices II. The PLCB is in charge of regulating a business that is, in effect, its competition: beer retail. However, the State Stores are not subject to enforcement actions by the BLCE because they are not “licensed establishments.”

And that's just the stuff I had in my notes. My main point? Why should we give you all this stuff to act like a private business...when we could just do away with you and have a private business?

We did do a little happy talk at the end: Stapleton and I agreed that the PA Liquor Code needs overhauled. We just see different needs. He thinks it needs to put more lipstick on his pig. Me? I'm thinking about pork chops and bacon for dinner.

Anyone know where I can debate Wendell?


Unknown said...

Nice work on the interview.

I do think we're downplaying some of the negatives that will come with a deregulated system. As the largest buyer of wine and liquor in the world, the state has a great economy of scale (though we currently lose the potential price benefits to bureaucracy). And, of course, the recurring revenue generated by the LCB pays for other stuff we like (like schools and roads).

But you, I and everyone in PA is tired of waiting for the LCB to act like they care about the job. Their ineptitude has made this possible. As you point out, where was this plan 20 years ago?

The only good thing about the False Dawn Initiative is that, if privatization fails (again), we might at least get some incremental reforms, some of which are less stupid than renaming a tax.

tazio said...

Good article.

I'm trying to think of a good reason to keep the state stores and the only one I can come up with is that they MAY be better at policing the selling of alcohol to under-21s.

I don't know this for a fact, but it's just my gut feeling.

Does anyone know if it's been shown that someone under 21 bought alcohol at a state store and then went out and wrecked their car?

On another note, and personally for me, I buy my beer at a good bottle shop like The Beer Stop in Hazleton or Krugel's in Georgetown. I guess I've grown up to just not expect spirits and beer in the same place in PA. Having everything in one-stop is not a major selling point for me.

For me and my buddies who like good single malt scotch though, it is a pain to have a very limited selection in the state stores. This is a major point in favor of privatization in my opinion. Could I stand it though if I had to order a certain distiller's offering and wait a week to get it? Probably. These bottles usually aren't spur of the moment purchases for me.

Lew Bryson said...

Greg, "potential" price benefits is the key. There's not a lot the PLCB can do on taxes (the taxes that are on before they even get it, too), and big as we are, we're not actually that good at selling the rare stuff, so we don't get good allocations of it. As for the recurring revenue...taxes are taxes, they get collected. The "profits," I'm willing to bet, will be compensated for by fewer people crossing the border to buy booze. The biggest city in the state is right against the border; make buying booze MORE attractive here instead of less, and you'll see better tax revenues. More jobs, too.
Your last point on the FDI is exactly what they're banking on. Don't settle for it!

Tazio, they're good at it, but the dirty secret is that most underagers don't get their booze at off-premise stores. They either get it in bars, or they get it from friends and family.

As for the single malts; have you ever been to a really good specialty store, where the buyer really knows single malts and can sample you on some stuff you've never had, a place like Binny's in Chicago, or Federal in Boston? Philly would definitely have at least one of those, and believe me, it's a lot more satisfying than picking out a bottle online!

Dean said...

Lack of choice is my biggest beef. Why do the adults in NJ, DE, NY have more rights than I do just because I live in PA? (Rhetorical) It's ridiculous that I can't get whatever liquor or wine I please, legally. I really don't care about the number of stores - don't mind driving to get what I need *cough* New Jersey *cough*. I had a conversation with a BarKeep at a well respected cocktail joint that has successfully gotten the PLCB to bring in whiskey that was previously unavailable in PA - he told me that many small producers simply won't deal with PLCB, making the task of getting a variety of booze (legally) sometimes impossible. Re: Garces Group they are ground breakers - other licensees should be grateful that they set a precedent with mother LCB.

Lew Bryson said...

I'd disagree with your last statement: Garces' BYO is NOT a licensed establishment. That's the whole point. He essentially gets to sell wine without having any license, because the PLCB decided to set up shop in his shop. Not fair, and they can't afford to "give" these to as many places as are going to want them. That whole program stinks.

Unknown said...

I agree the LCB and state store system HAS to go. But, do need to point out that the Garces joint is now licensed. here's the menu:

Lew Bryson said...

Oh damn, that's right: my mistake, I forgot that they had lined up a license. Good on them. Sorry about that.

Bob said...

In response to Tazio, nobody enforces the LDA as well as Wegman's. I get carded at EVERY Wegman's EVERY time (and I'm 52). Besides, I think it's a moot point. The assertion that privatization would lead to more underage drinking assumes that there are currently underage kids who want to drink but can't get booze. Nonsense. Virtually every underage person in PA who wants to drink is already drinking. That was true when I was in my teens and 20s, and it's just as true today, based on my kids' experiences in high school and college. The only classmates my 17-year-old son knows who don't drink are the ones who choose not to.

I also find it ironic, Lew, that so many conservatives here in your native Lancaster County are opposed to privatization. They don't stop to realize that the PLCB is simultaneously in the business of both controlling and promoting alcohol sales. Social conservatives should be appalled that their tax dollars are being used to promote alcohol sales, and free-market conservatives should be appalled that government has taken liquor wholesaling and retailing away from private enterprise. The PLCB should be in the control/enforcement business exclusively; it should do one thing well instead of doing two things poorly.

tazio said...

Good points all about under-agers being able to get booze in places other than package and state stores, making verification a moot or limited point.

I'd like to see data-driven decisions made on the privatization issue. Have any studies been done?

For example, has anyone surveyed Pennsylvanians to see how we feel we're being served by the current system and what we feel would need to be improved or changed? The LCB should be doing this regularly, to better serve us. As should anyone with a dog in the fight in favor of privatization.

Further, pick a basket of spirits and wines. Compare the prices in PA, NJ, and Delaware. If it's more expensive in PA, then we should be demanding change. Has this study been done? (That I don't already know the answer to this points out I'm a johnny-come-lately to this issue.)

To limited selections in state stores: I don't think the state store system could ever make much money on offering a wide, wide choice of single malt scotch for example. It's sort of like Boscov's trying to sell sporting goods.

Lew, no I haven't been to any specialty shops offering tastings but I sure can see the benefits. It does sound great and I would definitely search these out in PA if they were allowed...

Incremental reforms are compromises and verything in the world I live in seems to be filled with compromises. It's still moving the yard-sticks though--just not as fast as we want.

If we as citizens don't feel strongly enough to fight for something, well, there are plenty of examples of where that leads--especially when the government gets involved.

Kudos to you fellows for showing your passion and fighting on this issue.

Rich said...

Price is not an issue...we need to get that off the table here. Product pricing is NOT an issue, it just isn't. To many consumers, that is the bottom line, they want to know, will booze be cheaper if we privitize? And often, if they knew the answer was NO then they wouldn't support it. It's impossible to say that it will be cheaper for every product across the board. If you compare out of state prices to PA, some will be better, some won't. Let's just kill this price issue right now.

John said...

Just a note. Most of the Plcb modernization initiatives were in place long before privatization was a gleam in Mr. Turzais eye. Some need legislative approval that we new we would have had before the election. He is now meeting with lawmakers for permission to stay the course.Bailment for example has been tossed around a while now. this is where the purchaser does not pay for the merchandise untill it arrives in the store. Think consignment. this would save the state millions. Common retail practice once you get to the Plcb mega-buyer status. Big box electronic retailers often pay for units untill it is sold at the register!

Ethan said...

Good interview! Thanks for taking the time from your day to talk with Stapleton. I really hope that Corbett's efforts are going to change PA's wine and spirit system to give the consumer more freedom to get their wine and spirits from where ever we choose (grocery store, specialty store, total wine, mail order, etc).

Lew Bryson said...

John, your comment is barely worthy of a response. The mere fact that this kind of thing isn't already in place shows that the PLCB's not going to get the "modernization" it says it wants. And "Most of the Plcb modernization initiatives were in place long before privatization was a gleam in Mr. Turzais eye"? Really? Then why weren't they coming up in public hearings? Why weren't they being accomplished? Why was the PLCB wasting its time on dopey crap like the wine kiosks, and the "Table Leaf" rebranding initiative?
John...if you think anyone in favor of privatization is going to be wowed and change their mind because the PLCB asks the legislature for more time to pay their're delusional. What people want from the PLCB is simple: go away. We want more stores, and you won't give them to us: you give us the wine kiosks. We want better-trained staff at every store, and you won't give them to us. We want lower prices, and all you give us is the outlet stores that are there as a pathetic fence against border bleed. We want choice, and you stop us at the border and arrest us.

Get it?

sam k said...

Tazio,the in-store sampling is an amazing thing. I was at Binny's in Chicago, asking about some whiskeys I was considering, and the unbelievably knowledgeable clerk asked me if I'd like to taste them! Makes the decision so much easier.

As for price, I agree with Rich. PA's prices aren't out of line for the most part, and are excellent in some cases, but to me, that doesn't make up for the lack of selection or the statewide decision-making process.

If we were privatized, a brand that sold well at my local store, or perhaps sold well across a regional chain, would be kept in stock to serve a defined customer base.

As it is though, if something doesn't perform well across the state as a whole, it's delisted, period.

That's bad customer service, period!

Anonymous said...

I personally think its a bad idea.. Let the State keep doing its work.. I t has been great all these years and the funds made will never be replaced.. OH thats right the people that dont waste time drinking will pay with TAXES on something else.. NO MORE TAXES...

Lew Bryson said...

OH thats right the people that dont waste time drinking will pay with TAXES on something else.

I'm guessing from that statement that you don't "waste your time drinking." In which case, we who do drink are paying taxes for YOU. So here's my opinion: if you're not paying into this, you don't get a vote. See ya later, buh-bye.

Ted said...

Bravo Lew. I believe the main reason nothing is done about the sorry state of affairs in PA is that not that many people really care. This applies to not only the PLCB but the whole legislature. The PLCB issue gets portrayed as a "bunch of whining wine snobs" vs "the union."

Actually, this all comes down to a bunch of long-entrenched special interests vs the consuming public.

The unions, the wine and spirits distributors, the beer distributors, the lease holders, and the bureaucracy have all lined up with the safe driver, anti-drinking crowd to keep the system in place. All of these constituencies chip in PAC money and votes.

And what about the consumer -- screw them! They really won't care that much if nothing changes.

My guess is that once again, not much will change. The greedy in Harrisburg will opt for the fat PAC checks. The union will claim they saved "good, high paying" jobs, and the big distributors will still be able to make one sales stop and dump their excess on us.

Think of all the lost revenue gone to other states. Think of all the new competitive businesses not started. Think of Costco, Trader Joe's, etc that chose not to open more stores in PA. Think of the restaurants that can't compete because of our ridiculous system. We can all go on.

But - at least Mr. Stapleton and Mr Conti can keep their jobs. I am sure they were selected because of their in-depth industry knowledge. Not just because one was an ex-senator and the other's father was a well connected lawyer whose father was a state senator.

PR said...

WUH? We can order wine shipped to our house now? WHEN DID THIS PASS?

LarrytheWineGuy said...

I would like to become a resource for you on the issues of private beer, wine and spirits wholesale and retail sales. My career includes experience in retail, wholesale and supplier operations. I currently reside in NV where I am employed by a large beer, wine and sprirts distributor. If PA privatizes, I plan to return to return to northwestern PA for an employment opprtunity to be closer to northeastern OH where I was born and raised.

This privatization debate is the worst type of political kabuki theater. There is absolutely no reason for PA or any other state to be a monopoly business operator. The tired arguments presented by the opposition cannot withstand close scrutiny.

As you continue to present an objective, sensible argument for privatization, please do not hesitate to contact for my perspective based on 22 years of experiences.