Wednesday, March 6, 2013

Percolation and Progress

Things are popping in Harrisburg. Check out this headline on the Harrisburg Patriot-News website:

Liquor privatization picking up speed in Pennsylvania as bill is introduced 

House Bill 790 was introduced today, and will be moving through committee. According to the bill's primary sponsor, House Majority Leader Mike Turzai, the bill will move quickly. From the article above: 
“Because there is a lot of energy, a lot of enthusiasm … There is widespread agreement in our caucus,” Turzai said. He said the House Liquor Control Committee will take up the bill March 18, and he expects the House will vote on it later this month.
You may recall that last year the privatization bill was shredded in committee by Rep. John Taylor. That's not how he's talking this time around, according to quotes in this article.
“It seems like we’re going to agree on most of it, but the speed of what we’re doing is really a big part of it,” Taylor said.
Taylor wants to slow down the privatization process. Well...if that's what it takes, okay. As long as we avoid the pointless "modernization" the PLCB sycophants in the PA Senate are still gassing about. That tune may change when they find themselves with a passed privatization bill from the House with the Governor standing behind it. Impaired though Corbett may be, he's still the governor, and Senate Republicans will soon find themselves under the spotlight.

Still, one day at a time, do the work that's in front of you. That's getting a privatization bill out of Taylor's Liquor Control Committee in decent time and in decent shape, not gutted like last time. So...PLEASE send emails of support to as many of the members of the Liquor Control Committee as you can; you can find them here. Definitely thank Taylor for his support this time, and thank Representatives Kampf, Killion. Lawrence, Mustio, Reese, and Regan for co-sponsoring HB 790. And if you want, send an email to the 9 Democratic members of the committee, asking them why, if a majority of Democratic voters polled support privatization, not one Democratic legislator supports it.

Keep your fingers crossed, and your powder dry. But get on the email, and on the phones, because I guarantee you that the State Store unions are doing that, calling every week. Make yourself heard for a change!


Anonymous said...

Seems like the lottery all over again. Wham bam thank you ma'am! Kinda makes you wonder what they're hiding. The beer distributors are toast, and Turzai has been quoted as saying this new version will slowly kill the PLCB stores. That quote already has his caucus cringing. Reminds too many of "we passed voter ID so Mitt Romney can win in Pa." That, the quote from Skip Brion claiming the Governors bill is designed to funnel the business to the big box chains along with the non-transparency (No public hearings?) has many of us questioning the motives of our party.

tim said...

Let the system stay as it is. The revenue it brings to the taxpayers is incredible dont give this money away to wal mart

Lew Bryson said...

What a sad load of crap this is. Comparing this to the lottery thing is pure BS. There's hardly any need to discuss this; it's been discussed to death over the last 30 years. What we NEED is to get it out on the floor of the House where it can get beaten into some kind of final shape that we can actually have a look at. Besides, Turzai is right; Taylor's plan WILL slowly kill the PLCB stores. Even Wendell W. Young IV has admitted as much. Would it be better to kill them quickly? I would argue that it would, and really, what's the difference? NONE.
"Non-transparency" is not an issue here; the Democratic legislators have rushed to have public hearings -- completely partisan "public hearings" that they can pack with union members and anti-alcohol activists -- and this IS going through the Legislature, not like the lottery privatization.

For what it's worth, I'm not in favor of the lottery privatization; it doesn't move me much, and I'm not in favor of privatizing the Turnpike. I'm in favor of privatizing the stupid, useless, kludge-ridded PLCB. far as non-transparency goes, how about you drop the "Anonymous"? Where are you from, and how are you related to an employee of the PLCB? Just guessing, but there's an almost 1:1 relationship between people against privatization of the PLCB and PLCB employees and their families.

Lew Bryson said...


Again, again, again...the lion's share of the revenue is TAXES, that will continue to go to the state, just as sale taxes go to the state from every other retail operation. The rest of the money, the so-called "profit," is variable, and comes to about 3/10 of 1% of the total State budget.

It sounds like a lot of money, around $80 million, but it will be replaced easily when people like me stop driving across the border to buy our booze; an estimated loss of $100+ million, which is probably higher, given that most of us don't just buy booze once we're in New Jersey, Delaware, or Maryland.

And the "don't give this money away to wal mart" red herring...look, if you don't want the money to go to big box stores, put limitations on the number of licenses. Wait...those are already in place, so this is a complete fake. WalMart will be able to sell, so will grocery stores, convenience stores, and drugstores, and so will beer distributors. There will be MANY more places to buy wine and spirits in the state, even though we'll STILL be under the average for states our size.

There is NO good reason not to privatize; the only plausible reason is the 3,000 some union jobs in the system...but if they're any good at what they do, they should be able to get jobs with places like Total Wine -- who have already said they'd be coming to the state -- without much problem.

Unknown said...

Plebe, the problem with your argument is that the whole thing is a giveaway to the big box stores limited licenses or not.

$10,000 - $25,000 per license to the big box stores depending on the type of license with an annual renewal of $1,000 - $2,500 depending on the type of license. Compare that to the beer distributors who have to she'll out $150,000 for a license. Plus an annual renewal of $10,000.

Lew Bryson said...'s still up in the air. None of this is set, especially with Representative Taylor proposing such a radical amendment. I'm hoping for an explanation of the big fees for the beer distributors when it gets on the floor. I agree, there's a problem there. But you's not just "big box" stores, it's the grocery stores and drugstores that get this deal as well. But "big box" really pushes people's buttons, right?

Anonymous said...

I have not read up enough to have valid opinion but as far as "big box stores" being the issue then don't shop them. If you don't want to give them PA's money then don't give them yours. You don't have to shop there. Good luck those elected to make these hard choices for the residents of PA.

Rufus said...


Two points:

1) All this revenue the proposal claims it will bring heavily depends on licensing fees. The vast majority of beer distributors will be regulated out of business and many mom and pop grocery stores, convenient stores, and drug stores will not be able to afford the licensing fees to sell beer or wine. How can the proponents of this ridiculous piece of overkill garbage (not speaking about actual privatization here) guarantee all this revenue? It's laughable. I know all this is "up in the air" but this kinda thing needs to be thought about before actually introducing a bill.

2) SB 100 is a lot less radical in "reforming" liquor laws. I'd say it has more of a chance to actually pass than HB 790. Politics isn't about radical change. It's about incrementalism. Significantly less jobs will be lost and the revenue side would be relatively untouched. Revenue may actually increase. It even has support of some pretty high ranking politicians (Scarnati). When PLCB lovers compare the two, they'd be more likely to support this. What say you about this bill?

Lew Bryson said...


SB100 is a do-nothing bill. ALL it does is charge tavern licensees $10,000 for the "right" to sell wine and spirits by the bottle for takeout...while the State remains the sole wholesaler (a non-starter for me, because it does nothing to address the issue of selection), and the State charges the same amount for these bottles as the tavern pays for the ones they sell by the drink, or tableside.

So picture it. The tavern owner is being asked to pay $10,000 a year to sell wine for retail store prices for takeout, say $10 a bottle for something like yellowtail...while they're already selling yellowtail for $40 a bottle in the restaurant. Why would that make sense? I was with Senator McIlhinney at a public forum when he brought up this idea, and there were some licensees in the audience. None of them were interested. They mostly don't have the room to store any significant additional amount of wine or spirits, and couldn't see the advantage if they did.

SB100 is about appearing to do something about privatization, while leaving all the parts that suck in place. SB100 is nothing I'd support, and I've told Senator McIlhinney that. As you might expect, my lack of endorsement didn't phase him! But that is my position.

As for the "windfall," I don't care personally if we get one or not. The "windfall" is just something shiny to get the greed-hogs of the Legislature to vote for something the public wants, which is shameful. The license fees are too high, I agree. That's the one thing about Taylor's amendment that makes sense; he's lowered them.

The Legislature, unfortunately, sees the Liquor Control Board, and by extension, the entire liquor/wine/beer retail industry, as a giant pinata full of money, and they are looking to beat the hell out of it to get that lovely revenue...and they don't really give a damn about what always has to happen to a pinata before you get the goodies out of it.

It really bothers me a LOT that this has become about "revenue." This is NOT an "asset." It's a patronizing system that we're stuck with and 60+% of the citizens hate; it makes a piddling "profit" on its police-enforced monopoly; and all it really collect taxes, which private businesses do pretty well without the aggravation. That's not an asset that can be sold. Corbett's on the right track here, but the license fees he's asking are too high. That's because they have to come up with bait to lure the Legislators, just to do what a majority of the citizens have wanted for 40+ years. Pathetic, and shameful.

Rufus said...


I have a difficult time disagreeing with you.

Can you link to Taylor's amendment? My support will depend on how "low" the fees actually are.

I see some pro-privatization websites are complaining that the amendment is bad news. I just can't find the actual text.

Lew Bryson said...

You can download a PDF of it here, best I can do:

And here's a summation of it:
Retail licenses:

The Pennsylvania Liquor Control Board would be authorized “to close Pennsylvania Liquor Stores as the board deems necessary due to the increase in wine and spirits outlets.”

The amendment would give distributor licensees first right of refusal on applying for 1,200 wine and spirit retail licenses for the first year after the law is enacted. After that, licenses would be available on a first-come, first-served basis.

The cost of a license would also be cheaper for a distributor licensee: a wine license would cost $25,000 and a spirits license would be $40,000. The distributor licensee would have to dedicate half of its shelf space to the sale of malt or brewed beverages.

For non-distributor licensees, the cost of a wine license would be $125,000, while a spirits license would cost $175,000. They would have to operate a store at least 2,500 square feet in size.

The board would also establish rules for receiving written objections from residents, churches, hospitals, charitable institutions, schools and public playgrounds, which are located near proposed wine and spirits store locations. The board may consider the written objections in the postqualification investigation of applicants.

Wine and spirits stores must be “a self-contained unit with limited customer access dedicated to the sale of liquor and related merchandise. Except for a licensee that also holds a distributor license, no wine and spirits store may have an interior connection with another business or with a residential building except as approved by the board,” the amendment says.

Grocery stores and beer:

“The holder of a restaurant license which has an interior connection to a grocery store as defined under section 102 may allow purchases of beer and wine for consumption off the premises to be paid for at a register other than the one located on the licensed premises.”

Selling cases of beer:

“The board shall have the authority to issue a retail package reform permit to any restaurant, hotel or retail dispenser licensee who makes application and pays the requisite fee for use at the same place the restaurant, hotel or retail dispenser maintains for the sale of malt or brewed beverages. This permit shall allow the holder to sell in a single transaction no more than twenty-four original containers totaling not more than three hundred and eighty four fluid ounces of malt and brewed beverages so long as the original containers are in a package prepared for sale of distribution by the manufacturer of not more than twelve original containers.”

The cost of that permit would be $500 per year.

“The board shall have the authority to issue a distributor package reform permit to any currently licensed distributor who makes application and pays the requisite permit fee for use at the same place the distributor maintains for the sale of malt and brewed beverages.”

The cost of that permit would be $1,000 annually.

Wine-to-go permit:

“Wine-to-go permit; Fees. For any licensee, his servants, agents or employes to sell unopened bottles of wine for consumption off of the licensed premises, unless the sale is specifically authorized under this act, or unless the licensee receives a special permit from the board to do so.

"Only those licensees holding a current and valid hotel or restaurant license shall be allowed to apply for such a permit. Any licensee that wishes to obtain a wine-to-go permit must make application to the board on a form proscribed by the board and pay the permitting fees. The board may charge a fee of five hundred dollars ($500) per calendar year to each applicant for this permit.”


State Police Bureau of Liquor Control Enforcement would enforce the law.

Rufus said...

Lew, I appreciate the link.

Can we find out how much each individual state store sells in wine or liquor each year? I'm curious to know what my local state store takes in.

A $65,000 initial fee and a $12,500 annual fee to sell wine and liquor is still more than any rural (and maybe even non-rural) distributor can afford. Next, a $1,000 package reform annual fee presumably on top of the existing distributor license fee. Do the supporters of these fees forget that beer distributors operate a business that can only legally sell one kind of low margin item?

Let's be honest. These fees are still ridiculously high. They will do nothing but continue to limit consumer choice and convenience. Rather than government directly limiting these by monopolizing sales, they will indirectly limit it by artificially pricing competition right out of the market.

Lew Bryson said...

The fees are punishingly high, I agree. Other states charge much, much less.

Don't know where you can get the numbers on how much the individual stores make.

Jay said...

HB 790 is skewed largely in favor of Out-Of-State Big Box stores and grocery stores. The interests of existing licensees have been ignored. Big box stores will eventually put existing PA family run operations such as beer distributors out of business, because they will be able to sell ALL THREE, BEER, SPIRITS & WINE from their high foot traffic premises. The state will loses one of their more profitable RECCURRING REVENUES for a ONE TIME fee. ANY bill that is passed MUST be SKEWED in favor of SMALL PA FAMILY BUSINESSES so that they can compete against the big box stores. BIG BOX STORES SHOULD NEVER BE ALLOWED TO SELL LIQUOR.

Lew Bryson said...

Jay, you should read the bill as amended. Your screaming objections have been taken care of. Chill.