Thursday, December 31, 2015

Welcome back Lew!

Tomorrow signals the return of Lew to the world of blog writing on  'Why The PLCB Should Be Abolished'. I'd like to thank him for allowing me to hold down the fort, so to speak, while he was off doing some other things.

I'm sure that I'm looking forward as much as the rest of you to his views on the prohibition relic we call the PLCB. I'll still be contributing but the reins will firmly be in Lew's hands once again.

Welcome back!

Wednesday, December 30, 2015

PLCB Provides Value? Don't Bet On It

The Wine Spectator put out their list of the top 100 value wines broken down into 6 categories.  You can see the lists here. Who wants to guess how well the PLCB at selecting those wines?

Read on.

Now I didn't check all 100 but took the top five of each category and went from there.  Even with the PLCB's new and improved search function I checked most of them multiple times to be sure but that doesn't mean one or two were entered in some weird way that only the PLCB can understand. I will say this, only a few were above the suggested retail price.

1. Light White
  • 1 in stock,  Don't get too excited the one in stock is in less than 20% of the stores
  • 2 available SLO
  • didn't stock 2

2. Rich White
  • 1 in stock (at 5% of the stores) 
  • didn't stock 4

3. Elegant Reds
  • 1 in stock
  • 1 maybe in stock but the PLCB didn't list the vintage
  • 1 available SLO
  • 2 not in stock

4. Big Red
  • 1 maybe in stock but again, the PLCB didn't list the vintage
  • 4 not in stock

5. Rose
  • 1 in stock
  • 4 not in stock

6. Sparkling
  • 2 in stock!
  • 3 not in stock
Remember that in PA not in stock means your are never going to see it not that they happen to be out at the moment.

Extrapolate that out and our State Controlled Monopoly with all that buying power and supposedly well trained (but under certified) buyers would have managed to stock maybe 25%, might be able to get an additional 10% and for 65% of the wines listed missed the boat completely.

If you hurry there is still time to get these well rated value wines......out of state.

Have a great New Years!

Wednesday, December 23, 2015

State Line = State of Mind

Not too far south of the Mason-Dixon Line is an odd little Pennsylvania-like anomaly within Maryland: the Montgomery County Department of Liquor Control. It's the last municipal control county in the U.S. They actually go the PLCB one better (one worse?): they have a monopoly on spirits, wine and beer sales, wholesale and retail off-premise. But like the PLCB, they are being called out for not serving the customers well and there are calls to privatize the system.

The funny thing is, the calls are from the DEMOCRATIC leadership of the state.  Specifically Maryland Comptroller Peter Franchot (D), whose office is in charge of liquor regulation for the state. Unlike the Democrats here in PA who would never say  something like “The county’s monopoly is bad for consumers, bad for small businesses and for our local economy” about the PLCB, the Comptroller is not only saying that, but saying it out loud and producing these anti-control broadsheets:
Clearly Franchot is not a student of Wolfonomics. He even has put out a report detailing exactly how and why privatization is better.

Of course the Union (who else?) opposes any talk of privatization saying that privatization would not create real competition.
"Under Maryland state law, two wholesalers may not distribute the same product in the same market at the same time. There is always one approved, designated wholesale distributor in a given market for each brand or product. Private liquor will have its own liquor monopoly."

So there won't be competition when Smirnoff is in direct competition with the other 40 brands of vodka in their price range? Somebody needs to go back to school and take some Econ classes. Competition will hold except at the very ends of the bell curve where there is no suitable substitute for the product you want: like a 60 year old bottle of Glenfiddich Scotch or a half-liter bottle of MD 20/20. That's true for the majority of states and countries, and is considered the norm so it really isn't pertinent to the privatization argument.

Of course, this ignores the indisputable fact that there is NO COMPETITION at all, be it real or fake, in Montgomery County now.

We here at the blog wish you the best of luck, Mr.Franchot! May you show our legislature the way to satisfying the consumer and ridding us of the archaic system now in place.

Tuesday, December 22, 2015

The Night Before Budget

'Twas the night before Christmas when all through the House,
Not a creature was stirring, not even an LCB mouse.
[They are closed, you know]

The bills were all stacked on the desks with great care,
In hopes that a budget soon would be there.

The Governor was snuggled all warm in his bed,
With spending and taxes happy dreams in his head.

With Dems in his pocket and no stop gap,
He'd just settled his brain for a short winter’s nap.

Just a friendly sheep here, yup. 
When out in the state arose such a clatter,
He jumped from his bed to see what was the matter.

Away to the window he flew in a flash,
Tore open the shutters and threw up the sash.

The moon on the breast of the new fallen snow,
Gave a luster of spotlights on The Framework below.

When what to his wondering eyes should appear:
The Republican Caucus, all filled with cheer.

Their majority strong, "No new taxes!" their cry,
More rapid than eagles their proposals did fly.

They whistled and shouted and called out their names:
"Now Liquor, Now Smoking, Now New Instant Games!

On Driller, On Business, On Fracking and more!
On Pensions, On Teachers, School Spending galore!

To the top of the Capitol, the top of the wall,
Now vote on them! vote on them! vote on them all!"

And up to the housetop the Caucus they flew,
With a balanced budget and some new spending too.

But then in a twinkling we all heard on the air,
The whining and threats of The Wolf from his lair.

"My budget's holistic, you must understand,
Includes taxes and spending there for everyman.

It’s a bundle of taxes I’ll fling on your back,
(With a promise that later you might get some slack)."

His eyes how they twinkled, his dimples so merry
(His cheeks were like roses, his nose like a cherry),

When he spoke of the taxes all lined in a row,
The beard on his chin just quivered, just so.

But he held his spending plan tight to his breast —
Special interests to pay back; ignore all the rest.

A wink of his eye and a twist of his head,
Soon gave us to know we had all to dread;

He turned off the mic and went straight to his work;
Headed down to the halls where the lobbyists lurk.

First on his list was the State Liquor Store,
He must keep it open, privatization no more!

He tells us the free market would surely raise prices,
And monopoly's best for this most tasty of vices.

"I won’t give the people what they've wanted for years;
It’s much more important to keep state store cashiers!"

It was a long night, as The Wolf clawed and fought,
And schemed to keep progress remaining at naught.

But I heard him exclaim as he went back to bed,
“Happy Christmas to all. My budget's not dead!”

Thursday, December 17, 2015

One of our stores is missing

We can get pretty used to the incompetence of the PLCB: storing wine in uncooled trailers in the summer, recruiting the robot army of wine kiosks, even not knowing how to add or subtract (like this example from this week). 

Time to break out of the pattern: now they lost an entire store. Don't believe me? Check their latest Retail Year in Review and try to find Store #6709. Here's the address.

YORK, PA, 17404-1740

But it isn't listed any longer. The Retail Year in Review is the PLCB's way of patting themselves on the back by telling us what a great job they do selling products (with the help of a police-enforced monopoly) in a state where they regulate their only competition — beer — and have their own judges and branch of the State Police to enforce it. Record sales every year!! Well, DUH!

Seems nuts that they lost a whole store, though. Maybe they "re-branded it," or it moved, or they did that "store-in-a-store" thing and no one's noticed it's there yet, or they closed it for an entire year to 'remodel' (which has been known to happen, ask the people in Mountaintop). But it's even news to the people working there. Give them a call at 717-843-5800 and ask them yourself. 'Are you there? Because the Retail Year in Review says you're not.' Typical lack of  PLCB coordination has the store locater thinking they are still around.
Crossroads would be #152 if, you know, the PLCB knew what it was doing.
This isn't one of those 3-day-a-week stores, either, but one in the top 25% in the state. It did $4.5 million last year...and they just left it out. A few million here or there in reporting, accuracy, who cares, we do our own thing and if you don't like can't go anywhere else

Nobody noticed why the numbers didn't add up until The York Daily Record did a story about sales growth in York County and asked why the total from the stores didn't match the total for the county. The PLCB was not able to explain the discrepancy. It took me about 20 minutes to figure it out and I don't have an accounting department or a $66 million computer system.

Some retailers tell you to pay less and expect more. With the PLCB we learn to do the opposite.

Privatize. Before more stores disappear!

Monday, December 14, 2015

How to lie like Wendell Young IV

We like to take UFCW Local 1776 president-for-life Wendell W. "The Haircut" Young IV to task for bending, breaking, and shattering the truth about booze sales in Pennsylvania. He's out in the public again as the budget impasse comes down to the close and Senator McIlhinney's Great Step Sideways "modernization" plan for the State Stores is in play. Windy Wendy is spreading the same old manure about changes to the State Store System: any change is bad, we need these jobs, private companies are evil. 

As a public service, we will now present actual statements by Mr. Young, showing the different types of lying and some of the nuances of the same. 

Never gonna happen is it?

The Flat-out Lie 
One of Wendell's favorite type of lie, the flat-out lie is best used in press releases or other forms of communication where the liar can't be questioned with any immediacy. This type of lie is best used to impress or intimidate by showing the supposed knowledge of the liar.

For example, you can find this lie on the union's website "...the PFM found that privatization will cost more than $1.4 billion in transition costs over five years,”

As one of Mr. Young's favorite lies. He has said this numerous times in numerous places, but saying it over and over doesn't make it true. The PFM report  on page 186 lists the Operating and Transition costs as $1.4 billion. Mr. young always seems to forget the Operating part, the costs that are incurred by simply running the stores while they're open. The normal costs of operation, not costs incurred by any kind of transition.
And on page 180 of the report it shows how much just those operational costs are. Remember: these are costs that would be incurred just to keep the state stores running anyway.

From this you can see that keeping the state stores would cost well over $2B over the same time period since there would be no reduction in Operational expenditures over time. (Take the first entry and multiply it by 5.) That's actually likely to be on the low side: current expenses are $470 Million per year and going up.

The Lie of Time Passed
Another favorite lie for Mr. Young is to "forget" that one, two, five, or ten years have passed since he came up with whatever statistic he is talking about, but he still presents that old and often outdated information as current.

In this example, eight years after this CDC report was current (the CDC doesn't even have it up on their website anymore), the UFCW Local 1776 webpage still says that in 2007, PA had the lowest death rate in the country associated with alcohol consumption. They are actually correct about this....for 2007.  By 2009 Pennsylvania's rate had increased over 25% (Page 87 in the report) and by 2012 had gone up even more (Table 19, Page 78), resulting in a rate 30.8% higher than the 2007 figures Mr. Young likes to use. If you imply that the union-run, state liquor stores are responsible for the low rate, then aren't they also equally responsible for the higher rate? 

Just to make things worse for Wendell, of the states with lower rates than PA for the past seven years, two of them are New Jersey and Maryland. (Damn those free privately-run states right on our border...that so many Pennsylvanians use.)

The Lie by Omission
Another favorite used to make statements sound better without telling the whole truth.  We'll start out small with this. "Pa. has Wine and Spirits stores in every one of the state's 67 counties; West Virginia had state run stores in every county; with private companies in charge, five counties now have no stores."

The implication is that some people in West Virginia have to go unreasonable distances to find a liquor store. The truth is that NOBODY in West Virginia has to drive as far as some residents of PA. Why? West Virginia is a much smaller state with much smaller counties. It only makes sense...unless you are a union boss.

Wendell likes to talk about West Virginia and Iowa a lot. Mostly he will tell you about how they lost so much money on privatization, using statistics from the Iowa Alcohol Beverage Division and West Virginia Alcohol Beverage Control Administration.

Only total revenue did not decrease in Iowa. Reading the same PFM report linked above, it was reported for Iowa that: "Privatization was deemed successful from a revenue standpoint, with profits increasing by $125 million over the first 11 years of privatization compared to estimates under State control of the stores. At the time of the 10-year review, the conclusion was that most of the increase in profits was the result of eliminating the state stores and the costs associated with them. " (Page 111)

Oh, and Iowa now has over 1000 outlets with a quarter of our population, and still has less DUI and binge drinking across the board.

How much did West Virginia save when they didn't have state stores to maintain, with salaries and pensions? What about the auction fees for licenses (over $60 million)?. Then there are the business taxes that are now paid which weren't before. I don't see any of that in Mr. Young's calculations.

You know what else he doesn't say?  For eight years, West Virginia state stores and private stores were in direct competition in wine...and the state was losing. If state run stores are better, how could that be? 

You want more? How about the 5,000 family sustaining jobs you hear him talk about being lost to privatization all of the time? Here is another example, and another from 2 years ago.  What he doesn't tell you is that the PLCB says that over 45% of their workforce is classified either part-time or seasonal (page 43). Hardly "family sustaining," and it's not 5,000,

So if you hear Mr Young say anything about privatization, it is time to fire up your google-fu and check to see how badly he is lying about it this time.

Privatization is Modernization.
Private Retail, Private Wholesale.
All We Want Is Normal.

Thursday, December 10, 2015

Contact your Representative NOW

Do not let Senator McIlhinny and his Big Step Sideways liquor plan become what we will have to live with for decades to come. Make no mistake: if this goes through, there will be no further change to Pennsylvania's liquor and wine sales for years. We'd be much better off staying with the system as it is today for another year and fixing it properly than taking this Frankenstein plan that Senator McIlhinney has been pushing for the past three years. Ask yourself: where did this plan that no one really wants come from? Why is he so sure this is the way to do things? And the most important question: cui bono? Who benefits? 

Write your Representative today and remind them that REAL privatization is what we want. Below is the letter I wrote to my Representative; feel free to use it or change it as you wish.

Dear Representative xxxxxxxxxxx,

I urge you and your colleagues, with the utmost vigor, to reject the half-baked plan of Senator McIlhinny. He has been an obstructionist to the privatization movement for years and continues in that role now.  The citizens want privatization: private stores, selling to private individuals and businesses, while buying whatever they want from private wholesalers. Anything less means a continuation of the gross ineptitude, graft and malaise that is the current PLCB.

The selling of retail products is not part of government, the regulation of those products is. A simple concept that needs to be adhered to.



Wednesday, December 9, 2015

Our Goal Is To Be Better Than Utah

The PLCB put out their Fiscal and  Retail Year In Review booklets the other day. Nice to see that they have a goal, and I quote:

"Be recognized as the best-in-class wine and spirits retailer, distributor and regulator in the United States."

Which means that they want to be better than Utah...the only other state (or company) that retails, distributes, and regulates wine and spirits.

They might have to try harder to beat Utah...
The Annual report starts off with listing the Board Members and Directors including my fav, Faith Deihl, who hasn't worked their for a few months now. Don't want to confuse the public by being accurate, after all. It then goes into the whiny phase saying that if the government didn't make them account for all their liabilities, they would have made lots more money. Sorta like you saying your budget is fine until you have to pay your mortgage.

They continue saying how sales went up 4.2%, but what would have been the net (if they didn't have to account for all the stuff they have been ignoring for decades) only went up 2.5%  In other words, even without the accounting changes, expenses went up faster than sales...again.

Continuing to obfuscate reality they almost brag about having 134 different PA wines. However, there are more than 200 PA wineries with well over different 1100 wines and the vast majority of PA wineries aren't carried by the PLCB. The truth has gotta hurt. They also didn't mention why the Department of Drug and Alcohol Programs received 48% less this year, with funding dropping to $1.7 million to educate and prevent problem alcohol use.

The total number of stores went down by one to 603, but since those little One-Stop Shops went up by three, that means four real stores closed. But after 35 years the One Stop Shops hit their highest level ever - eighteen! The PLCB calls that a success.

Another point they don't seem to want to bring up is that Service & Demeanor inquiries went up by 8.4% in just one year. No breakdown this year if they were good or bad. Privatization must be having some effect since salaried employee turnover is up 7% along with intermittent clerk turnover also up 7% to almost 40% now. Finally, the PLCB itself shows that over 45% (an increase over last year) of  their entire workforce are classified as part time or seasonal (page 43), which are hardly "family sustaining" jobs.

Something else they don't say is that while the PLCB offers employees four wine courses, none are recognized by any established certifying agency. Sorta like getting a degree from an unaccredited online school. There still isn't a Sommelier in the entire wine selection process, which one would think should be a requirement when selecting wines for the entire state.  As I pointed out in another post, the PLCB now has 80 "wine specialists" for 603 stores, while Total Wine averages 5 PER STORE. Oh, PLCB, you got a ways to go to be best at anything.

While they try to explain it away, the single most important thing in the entire annual report is:

• Lower operating income of $111.5 million represents a compound annual growth rate (CAGR) of 1.8 percent since fiscal year 2010-11. Operating income has been adversely affected by dramatic increases in benefits costs in excess of sales growth, specifically in the following categories: pension (up 105.6 percent), workers compensation (up 520.6 percent!) and retiree healthcare (up 29.6 percent).
This isn't going to go away either.

Of course, the Retail Year in Review is mostly useless since it only describes what sales are in a police-enforced monopoly where the unqualified select what is allowed to be sold, so that certainly biases what sales would be compared the free market.

Monday, November 30, 2015

Why Its Not Safe To Go Into The Woods - A PLCB Horror Story

Not satisfied that their stupid laws, random enforcement, idiotic "interpretations," and never being checked for underage sales are killing enough citizens, the PLCB figures that having more stores open with longer hours for the start of hunting season fits their goal of  " exercise of the police power of the Commonwealth for the protection of the public welfare, health, peace and morals of the people of the Commonwealth...:

So while DUI, Underage DUI, DUI Fatalities, Underage DUI Fatalities, Binge Drinking, and Underage Binge Drinking is worse in PA than most of the border states, apparently drinking, driving to game lands, and hunting is perfectly acceptable and even encouraged by the PLCB.

They are getting sneaky about it too. In my first blast at this insane policy in 2013 they put out a separate announcement stating that these stores would be open early just for hunting season.  I'd link to it but the PLCB no longer  has it listed. In 2014 they combined it with the Thanksgiving holiday extended hour increases as shown here. Now they are trying to just outright hide the fact they are expanding store hours for hunting season by not listing it at all.  When you look at this year's announcement there is no mention of  Holidays or Hunting Season. All you get now is a flat "The following stores will have extended store hours in late November." However, if you look at the stores that are open or have extended hours on November 30th it is only because of hunting season.

So if you find yourself in the woods on November 30th, remember that the PLCB did their best to make sure all those people with guns were able to get liquor. I wonder how many cows would survive if they didn't ?

Wednesday, November 25, 2015

What the PLCB thinks

What the PLCB thinks the consumer sees

While the consumer really sees is this:

What the PLCB thinks of their apron specialists:

What the public really thinks:

What the PLCB thinks of their customer service:

What the consumer thinks of their customer service:

What the PLCB thinks is a "superstore"

 What the rest of the country KNOWS is a superstore:

What the PLCB thinks of their business:
 What their business really does:

The PLCB does nothing for the state. We are not safer, we are not better served and we are not satisfied.

Thursday, November 19, 2015

One picture says it all

All you need to know about how the people feel about liquor privatization. (click the pic)

Tuesday, November 17, 2015

Wine spectator's Top 10 - Or The PA Wine Desert Pt. 3

Time once again to see how the PLCB with all their highly trained wine people did compared to some folks who really are highly trained. The Wine Spectator Top 10 is coming out. As they count down, I'll be checking to see if PA somehow managed to luck out and actually have some of these wines available.

Let's finish the top 10:

# 6. Bodegas Aalto Ribera del Duero 2012, 2400 cases

# 5.
Mount Eden Vineyards Chardonnay, Santa Cruz Mountains 2012 1986 cases
SLO ONLY CASE OF 12 (Oh, the PLCB price is 11.5% higher than list price too)

# 4.Il Poggione, Brunello di Montalcino 2010 18,000 cases
Currently available in 21 state stores

# 3.Evening Land Pinot Noir Eola-Amity Hills Seven Springs Vineyard La Source 2012 1176 cases

# 2. Quilceda Creek Cabernet Sauvignon Columbia Valley 2012 4125 cases
Currently available in 9 state stores, PLCB price 41% ABOVE list of $140!

# 1.Peter Michael Cabernet Sauvignon Oakville Au Paradis 2012 1785 cases

So there you are, the PLCB stocks 2 of the top 10 if you want to pay a 40% premium for one of them and they say they can get another provided you want to buy a case and pay 11% more than list.

The question isn't if you can find any or all of these wines in one store. The question is can you find them in entire states and the answer is of course, yes.  In places that have to live by their knowledge of not only wines but of their clientèle there are a number of stores where more than 2 of the top ten can be found and states where they ALL can be found.

Until next time, I'll see you out of state.

Monday, November 16, 2015

Wolf's Privatization Plan

"The state would still be running the system, but they would be leasing it out, That is privatization.” Jeffrey Sheridan, Governor Wolf’s press secretary.

Hired by the government, paid by the government, given offices by the government, but "that is privatization"? Wolfonomics is spreading! Now there are two people who are completely ignorant of economics over the past 200 years. Goes with the "Competition raises prices"  mantra the Governor tried to use when he vetoed the privatization bill.

This is the Wolf system in a nutshell:

Wednesday, November 11, 2015

A PLCB Mystery - The Case (or Ten) Of The Missing Four Roses

Ever watchful, our intrepid sleuth is always on the lookout for ways the PLCB pays lip service to taking care of the citizens. 

On August 21st, Four Roses sent out a press release listing what this year's Four Roses Limited  Edition Small Batch will be, and more importantly, how MANY they planned to make. There was to be a release of about 12,600 bottles total. From what I have learned over the years, about 80% stay in the U.S., and the remainder are for the rest of the world. Can I prove it? No, allocation is a very closely-held card by the distillers and distributors, since there is always somebody who will take issue with it. Needless to say, like any other business, good customers usually will do better than ones that are more difficult (I bet you can see where this is going).

So about 10,000 bottles of this year's Limited Edition were destined for U.S. customers. Dividing up by state would yield 200 bottles per state. Great for North Dakota and Rhode Island; not so good for the rest of us. Allocating by population is a more fair way to guess, and with 4% of the U.S. population, Pennsylvania would get about 400 bottles.

So how many did we actually get? 24 bottles were announced to be sold in a lottery; registration ran from 8 a.m. Oct 26th to 11 p.m. Oct 31st. (No surprise that it didn't actually open until about 8:30 a.m.) But wait!  There's more! Right after the lottery was announced, I wrote a letter to the PLCB asking where all their buying power was and why they had such a poor relationship with the distributor that we got well below what we normally would have. Imagine my surprise when 3 days later, the PLCB announced they had gotten another 42 bottles to raffle off, for a grand total of 66, of which 16 would go to licensees.

No. This is not for you 
silly PA consumer.
Is that fair?  We'll never really know, because we won't know how many bottles the PLCB really had, since they had it listed as an SLO item in August, weeks before the lottery announcement. However, if you called and tried to order it you were told it was a "licensee only" item. So how many were sold to the bars and restaurants the first time, before they got ANOTHER chance? Why did the state get so few to begin with? Is this an indication of what is really thought of the PLCB? Or did the public just get screwed by the PLCB because a normal amount was allocated and they sold it to licensees first?

Also, who is watching all these lotteries?  The PA lottery is certified by outside public firms, the PLCB lottery is...what? I haven't seen or heard about any safeguards in place. Who checks to make sure this is all on the up and up? Are we just supposed to believe them? I'm not saying it isn't legitimate, but I am saying it is hard to believe, when the transparency at this agency is like looking in the Susquehanna after a rainstorm. They certainly haven't done anything to earn my trust so far.

Get rid of the state store system and move Pennsylvania back to normal.

P.S. For those keeping track we reached a small milestone. This is the 400th post of the blog.  It took us seven and a half years to get to this point.  Here is hoping that our job will be done long before we reach 500.

Tuesday, November 10, 2015

Wine spectator's Top 10 - Or The PA Wine Desert Pt. 2

Time once again to see how the PLCB with all their highly trained wine people did compared to some folks who really are highly trained. The Wine Spectator Top 10 is coming out. As they count down, I'll be checking to see if PA somehow managed to luck out and actually have some of these wines available. Here are the next two,

Let's begin.

# 8. Masi Serègo Alighieri Vaio Armaron 2008, 3750 cases
There is one that is close but it is a 
Classico Riserva Costasera 2008 and this one is not

# 7.
Kupe Single Vineyard Pinot Noir 2013

I've included a picture so if you want to go to New Jersey, New York or DC for the MASI or just New Jersey and New York for the Kupe.


Wine spectator's Top 10 - Or The PA Wine Desert Pt. 1

Time once again to see how the PLCB with all their highly trained wine people did compared to some folks who really are highly trained. The Wine Spectator Top 10 is coming out. As they count down, I'll be checking to see if PA somehow managed to luck out and actually have some of these wines available.

Let's begin.

# 10. Klein Constantia Vin de Constance 2009, 2500 cases

# 9.
Clos Fourtet St.-Emilion 2012, 3500 cases

I've included these pictures so you know what to look for if you go to New Jersey, New York or DC since they have them in stock

Monday, November 9, 2015

Modernization won't do what the people want; Part V

This is just a reminder that what the PLCB says, and what the PLCB does are not always the same thing.

"Beginning January 2, 1934 and continuing as rapidly as alterations can be completed, 240 liquor stores will be open in Pennsylvania at convenient places to serve the public." (PLCB statement issued on the opening of the first 64 stores)

That statement, made almost 82 years ago, shows the failure of the entire State Store System. Is not making stores "convenient to the public" part of every modernization plan you have ever heard? They have been promising to do that since Day One and have failed miserably, especially considering that they have had over 80 years to complete the task.

Is having 25% fewer stores more convenient? Is stringing the public along for eight decades more convenient? Is having one or two stores in entire counties more convenient? Is having the PLCB at all more convenient?

Since the Liquor Code was created in 1951, the PLCB has had total non-legislative control over store size, store location, and hours of operation (except Sunday). If they wanted larger stores, they have had 64 years to lease them. If they wanted "more convenient" stores, they have had 64 years of total control of placement to do it. If they wanted to be open anytime from 7 a.m. to 2 a.m., they could do it. They have done none of it.

So don't believe me: believe the PLCB and ask yourself if they have managed to accomplish what they said they would do over the past 82 years?

Thursday, November 5, 2015

Please donate to the PLCB Super-PAC

Based on the previous leadership of the PLCB, we all know they want more than just a simple feeding at the public trough. Booze, jobs, trips, sporting events, and men's clubs are just some of the extra perks they were looking for.

How can we use that to get the PLCB to actually do some of the things that we, the citizens, wanrt? Enter the PLCB Super-PAC. Those PLCB officials can't coordinate with the PAC to tell us what they want, but we can guess pretty well. Sure, thanks to Governor Tom "Don't Take That Cookie" Wolf, they've signed another "I'll be a good boy" pledge, but that hasn't stopped anything in the past. Besides, they won't be asking for anything and we won't be giving them anything.  It will all be leased or loaned for "research"  (nudge nudge, wink wink)
This could be the new PLCBMobile
Imagine that a new Porsche shows up in the PLCB's driveway with a note saying it is free to use for as long as the agency wants; maybe the director of product selection should try it out. (P.S. We want more different flavored vodkas.) See how well that has worked in the past! Imagine how we citizens can make over the state stores.  Want more than one or two bitters? A reservation at Barclay Prime or Prime Rib at the Warwick in Philly for the Board may be all it takes.

Real innovative ideas like a specialty spirits shop in Philly and Pittsburgh may take a bit more ingenuity: maybe letting a few Directors "find" a pre-paid week's worth of tennis lessons at the Burj Al Arab in Dubai. I'm sure the PAC can think of something.

This could be Mike and Skip!

Please make your non-tax deductible contribution to the PLCB Super-PAC, so another generation of Pennsylvanians don't have to suffer like we have for the past 82 years. If they won't privatize, we'll just have to pay them to act normal.

Do it for the children.

Paypal, Visa, Mastercard, American Express, K-Mart, Target, and Diner's Club accepted,
Burj Al Arab
Burj Al Arab
Burj Al Arab
Burj Al Arab
Burj Al Arab
Burj Al Arab
The Burj Al Arab
The Burj Al Arab

Monday, November 2, 2015

PLCB 2015 Financials - Trying to make the best of a bad situation

Accountants speak their own language. I don't mean like from a foreign country: from a different planet altogether. They make money appear and disappear based on perceived changes in procedures, making it extremely difficult for the average person to figure out what the heck they are looking at when going over financial statements.

That's by way of presenting the PLCB's long-awaited Financial Statement for FY2014-15. Apparently they just couldn't delay it any longer (one little upside to the ridiculous delay in the state budget process). Instead, they resorted to Accountantese to make it hard to figure out just what happened. Not only have they changed some of the layout of their statements, they changed some of the wording for the exact same line or item in the current report and between last year and this year.

A quick example of how the same thing is called different names is on page 4 of the report: the difference between Sales Net of Taxes (gross sales) and Cost Of Goods Sold (COGS) is called "Gross Revenue from Sales." On page 5, the exact same number is now "Gross Income from Sales." A minor point, but why?

The big change this year is that because of new state accounting rules, the PLCB finally had to list pension obligations. While that causes comparison problems of its own (since they don't include last year's numbers so you can see any changes), it does show that without paying off pension debt at a much greater rate, the PLCB will be in the hole for years to come (as we've been saying all along).

It would have been nice to see if the overall debt went down for this fiscal year compared to last but those figures aren't provided.  However, there have been numerous sources that have stated that overall pension debt went up last year without actually providing any numbers to back it up. My belief is that pension debt did go up, but we'll have to wait and see next year's numbers to find out if it really did continue to increase over this fiscal year too.

Medical Liability went up from $63.63 million to $76.65 million from last year or about 20.5%  and Workers Comp increased an astounding 62% from $25.9 to $42.1 million. So including all of that the PLCB now admits to being "only" $240 million in the hole from being $77 million to the good last year. Just so you understand: that is $77 million from last year plus whatever they thought they made this year (about $80 million) and they are still $240 million down.

I'm going to look at how the stores did overall --  not how investments or deferred inflows and outflow went or the non-operating costs -- and compare them with last year. Without further ado, here we go. (Remember, you can follow along with their report here.)

Sales: Sales went up 4.2% while COGS only went up 4.1% and the effective markup moved up slightly to 45.35% from 45.2%.  No big surprise there: the population went up, prices went up, and the economy is getting better. The surprise would be if sales hadn't gone up; it's a monopoly, after all.

Operating Expenses: Now we come to the heart of the matter: how efficient is the PLCB in turning all those sales into what they call "profit" (what I call an unspent use tax). These numbers DO NOT include Pension, OPEB, and Workers' Compensation Accounting Valuation Expenses from Net Income. It isn't pretty.
  • Purchase, Storage & Transportation costs up 13.6% 
  • Stores' Operation and Supervision costs up 17.4% 
  • Central Administrative Support costs up 11.2%.
  • Gross Operating Income down 24.6% 
  • Net Operating Income down 32.4%
  • Operating Margin down 38% 
All this even though the total number of stores and employees were about the same and this is with record sales!

A real business grows profit by doing one or all of these three things;
  • Increasing sales by taking them away from their competitors, which will never happen under the current system. Border bleed is not going to decrease - period. 
  • Becoming more efficient and controlling costs, which means not having Operating Costs increase 17% in one year. Also not likely. 
  • Becoming more innovative...and we all know what happens when the PLCB tries that: wine kiosks, cost overruns, and trailers full of boiling wine. 
Increasing sales are good, but not when costs increase at a much faster rate. That's just not good business...but we are talking about the PLCB, which is not a business. It's a government agency.
Any honest accountant would despair. Maybe the PLCB's accountants do.
To be fair: the PLCB did increase funding to the Keystone Kops of Booze, the BLCE, by 3.1%. However, to make up for that, they decreased Drug and Alcohol education funding by 48%. Peter, meet Paul; here's his money.

There are some unanswered questions in the report, such as why inventory totals went up over 11% when the much-heralded bailment was supposed to reduce those costs. It went up last year too, and the year before that. In fact, it has gone up about 31% over the last 3 years.

This might just be me, but...the valuation of land as listed on the PLCB reports hasn't changed since at least 1999 (which is as far back as I can go), and building valuation, another line item, has been within 1%, up and down, since 2005. A minor but interesting question. I know my land and buildings have changed value over the past 16 years, yours probably did too. You'd think all those amazing offices, conference rooms and "wine tasting lounge" would increase the value of at least one headquarters property, right?

I realize that these are unaudited numbers, but they aren't going to change that much (if at all), if and when an audit is done, so what you see is what you get. Another year with record sales and another year of lower Operating Income. The real question is how long can this trend go on before it isn't sustainable: how deep will the hole be next year?
Hey PLCB - you down there?

Tuesday, October 27, 2015

A year later, and inventory is still mis-managed

Back in November of last year, the PLCB Annual Report said they had "...improved the product search feature of the Fine Wine & Good Spirits online store." (pg. 13). I pretty much proved that was BS at the time in my "After 80 years they still can't do inventory" story in January.

Here it is a year later, and you may be thinking, there might been some improvement. Maybe the PLCB has come up with some internal cooperation so that the database, retail stores, and website all know what is going on. If you believe that, well, I have a bridge to sell you.

Take the entry on the Fine Wine And Good Spirits  Facebook page of October 26th at 9 AM, where they tout having a coupon for the "new" (their words) Casa Noble Crystal Blanco tequila. If you want to find this item, you can go to one of two places to search it out, the Online Product Catalog or the "fancier" FWAGS website.

The Online Catalog lists Casa Noble Crystal Blanco tequila as an SLO item: you must buy a minimum of six bottles, at $43.79 each. Not a great deal even with a $3 coupon, considering it can be had for under $35 across the border. Going to the FWAGS webpage and doing a search for Casa Noble Crystal nets you  six listings in the Available Online section, none of which are actually Casa Noble products. Then there are 33 entries in the In Store section, which includes some wine cocktails even though it was a Spirits search. Of course, none of these are Casa Noble either. Finally we come to the 56 listings in the Available Special Order section. After fourteen items -- White Rum, Creme de Menthe, Captain Morgan, white whiskey, and Cognac -- comes the one and only listing for a Casa Noble Crystal, the last item on page one; it's still a 6 bottle SLO.

Is this their improvement after a YEAR of work? How much "modernization" of the search function should have we expected after the entire Board said they improved it back in November of last year? The answer is the same amount of improvement we can expect from any of the PLCB modernization schemes...little to none.

This just proves that there is little to no internal coordination in the PLCB.  The highly trained people who run the Facebook page don't know what the highly trained people who do the inventory call the same product and can't be bothered to find out, and the highly trained supervisors seem oblivious to the difference.

Is this any way to run a business? The answer is no, which is no shock: they aren't any kind of a business, just a poor excuse for the status quo.


Friday, October 23, 2015

If the PLCB had a theme song...

Hey! I'm not dead, its the PLCB that's dead.

If the PLCB had a theme song, I wonder what it would be? Something light and snappy, or more dirge like and droning?  I can guarantee it wouldn't be a Love Story kind of song. So take off those tin-foil caps and put on your parody hats and see what songs you can come up with. It's Friday — what else do you have to do?  Post lyrics or video links if you want. The rules are pretty lax as long as the title or lyrics fit the idea of a theme song.

I'll start off with these few.

I'm a Loser - The Beatles

You Ain't Seen Nothing Yet - Bachman Turner Overdrive 
A bit of trivia, this was the first song that had a stutter in it that made it to #1 on the Billboard charts.

Hey Hey, My My (Into The Black) - Neil Young

Out of the blue
and into the black
You pay for this,
but they give you that
And once you're gone,
you can't come back
When you're out of the blue
and into the black.

Of course the winner would be the chorus from Beck's Loser but I don't think even the PLCB with all their semi-functional computers could figure out the rest of the song lyrics.

Soy un perdedor
I'm a loser baby, so why don't you kill me?
(Double-barrel buckshot)
Soy un perdedor
I'm a loser baby, so why don't you kill me?

For my favorite about the state stores? What else could it be besides the Dead's 'Ship of Fools'

Now you give it a try...

And one is advocating "killing" anyone, or any kind of violence. It's just lyrics to a goofy pop song, and not even Beck meant it that way. Relax; it's a joke.

Monday, October 19, 2015

The PLCB has nothing to hide...unless it makes them look bad

Chairman Tim Holden:
What's the PLCB hiding?
As reported Sunday in the Pittsburgh Tribune-Review the PLCB, an agency with no business reason to hide anything (since they have no competitors), has not been very open or honest when dealing with their bosses — that us, the citizens of Pennsylvania. After all, that's what their supporters keep telling us, that we're the owners of a "valuable public asset." Shouldn't the "owners" be able to ask questions and get answers?

That's not what happened, according to the Trib's reporter, Kari Andren; instead, the LCB instructed their press secretary to delay the release of such information by forcing the Trib to go through Right To Know channels:
The agency's board members directed a press secretary not to provide basic information about a former employee, such as dates of service, job title and salary, unless the reporter filed a formal request — a move that could have delayed the release by more than a month, the emails obtained under the state's Right to Know law show.

We have to watch what we ‘give' her regarding employees without going through the Right to Know channels, even if it is public information,” board member Michael Negra wrote in a Sept. 23 email. “Agree,” Chairman Tim Holden responded the same day.
LCB spokesperson Elizabeth Brassell said the agency, “fully respects and supports the release of public information to interested parties.” But Erik Arneson, head of the agency charged with overseeing the state's open records act, said the board members' actions were not in keeping with the intent of the law. “The Right to Know (RTK) Law was not designed to be a tool used by agencies to delay access to clearly public information,” Arneson said.

More proof of this use of delaying tactics is the now 111 days over which the PLCB has refused to release their yearly financial statements. Some were verbally stated during the Ross hearings over two months ago, but so far nothing has shown up on paper or online. If the PLCB were a "real" business, they would have had to release their yearly statement before the first quarter earnings statement. However, the PLCB doesn't update the citizens with quarterly statements. Why not? It's a painfully simple answer: they aren't a real business, and never have been, and never will be.

Melissa Melewsky, a media lawyer with the Pennsylvania NewsMedia Association, agreed that the LCB's approach doesn't follow the spirit of the open records law, or Gov. Tom Wolf's call for government transparency. Wolf said he was “confident in Chairman Holden's ability to continue to make the LCB more transparent,” and the previous Chairman (and still current board member) Skip Brion has said, “This is a state agency; we should be as transparent as possible.” Apparently he has changed his mind.

This is not the first time the board has used RTK to delay, or has done things in the dark that should have been in the sunshine of public scrutiny. Years of notational votes (where the Board members meet informally and off the record to make decisions, and then only vote on 'that thing we talked about' in official meetings) and vague to non-existent board meeting information have keep the "owners" (you and I) in the dark about the working of the PLCB.

Who knows, if the public were privy to the machinations of the State Store System, we may never have had wine kiosks, or $66 million in computer system cost overruns, or paid over $4 million for an out-of-state firm to come up with that snappy "Fine Wine And Good Spirits" branding. All money well spent, I'm sure...once the real facts finally come out in a few years, the brilliance of it all will shine clear. Or not.

This is not the first time the PLCB has been publicly charged with ignoring the intent of state law; this is not the first time they've lied by omission. This is not the first time they've delayed the release of reports on their performance. So we have to ask: why the delay this time? We see the smoke, what is the fire that the PLCB is trying to hide while privatization is still a very real possibility in the Legislature? We urge the Trib to keep digging — faster, if possible — and encourage the reporters at the Inquirer, PennLive, the Daily Record, and the Post-Gazette to do the same. Because we the citizens — the owners — need this story to come out before privatization slips away. It's clear that the PLCB feels threatened by it; that's enough reason to dig out the truth.

The time to privatize is now.

Tuesday, October 13, 2015

NEWS FLASH! PLCB Supports PA Wine Month

Dateline Harrisburg: October 13, 2015

The PLCB announced today that as long as the threat of privatization continues they will support Pennsylvania wine makers. Chairman Tim Holden stated that the the PLCB is fully behind Pennsylvania wine makers, and the proof is the 50% increase in shelf space allotted to Pennsylvania wines.

"The change from two to three shelves of Pennsylvana wines is a big step for the state's vintners," Holden announced. "We support all Pennsylvania wineries, even the ones that can't afford to sell to us because of our pricing policy (a majority of the over 200 wineries in the Commonwealth). In the past 5 years we have instituted ONE new policy to help Pennsylvania wineries, an increase of 100% over the previous 75 years, to try and make up for selling bulk California wine that undercut the state's own producers. We won't get caught doing that again."

Board member Michael Negra chimed in with this bit of techno-hope: "Over the next five years we plan to attempt to put a tab on our website so you can see all the Pennsylvania wines available for order. Someday we hope to be able to allow a customer in Erie to order a Lehigh Valley wine and have it delivered to their local store! But for the moment we aren't equipped to ship and warehouse the hundreds of different SKUs that would require, and of course we couldn't allow the winery to ship direct to the customer; that would mean a loss of control. And 'Control' is our middle name, kind of." 

Consumer reaction has been mixed since the change in the stores.  "I don't know where to find the Riunite now." said a State Store customer, "It was always under the PA wine section before and now they have moved it. because of the extra shelf of PA wines."

"I think it is great!" said another consumer as he walked past the Pennsylvania wine section to get a box of Franzia. "I think the state should support in-state businesses. Maybe not having the PA wine section in the back corner of the store would be better...but hey, I'm sure they know what they're doing."