Thursday, April 16, 2015

Wine & the Modern (non-PLCB) World

More "Modernization": direct wine shipments in the Commonwealth! Pretty exciting stuff...kind of. On a closer inspection, what the PLCB and their Democratic supporters in the Legislature are proposing ain't all that exciting, and it certainly won't make the money Governor Wolf thinks it will.

In the first place, this isn't really "modernization," or some great plan, but more like forced compliance. The Supreme Court passed down the Granholm Decision 10 years ago, which basically said that states have to treat in-state and out-of-state wineries the same. Yet here we are, 10 years later, and Pennsylvania still hasn't complied. Without an enforceable law in place, you could argue that makes shipping wine into the state legal anyway. I'm not a lawyer, but the couple I've talked to about this have agreed. Of course, you would have to declare it and pay taxes (using the non-existent forms the PLCB doesn't provide) to fully comply with the law. It's only been a decade, so I'm sure they'll have those forms ready by 2020 or so.

When the Legislature finally gets around to complying with Granholm, they'll have to make a choice on how to handle direct shipping. One option is to just not do it at all, make shipping wine completely illegal, but that's probably not how things will go. Then there are two types of direct shipping states: "reciprocal" and "permit."

Reciprocal states say, 'We'll accept your wines if you accept ours.' It's quick, easy, good for the consumer, no fuss, no muss. Permit states require that shipping wineries may have to sign up, pay fees, collect taxes, file forms with sales data (like who they shipped to and how much), limit availability, and be subject to audit of their books to make sure every cent is squeezed out that they can get.

If there's an easy way to do it, and a hard guessed it, the permit state model is what the PLCB and the Legislature are proposing, only more so. They want ALL of that permit state intrusion, plus the wine has to be put in special packaging that isn't required by any other state. You can see how popular this will be with out of state wineries. I'm sure that they'll flock to the PLCB, overwhelming them with permit requests, like the 55 currently signed up (in only 10 years!).  Who knows? It may even get to 100!

So what does direct shipment of wine as proposed actually do for you? Not much, but it does keep power in the hands of the PLCB, by making you go through them. However, you still won't get what you want, the way you want it, because if the PLCB can get it by SLO, you won't be allowed to order it direct. If the winery doesn't agree to all of the above terms, you are completely SOL. This, to keep an entire department employed that would otherwise be mostly gone if you could order things yourself. Another fine use of your tax dollars. (Don't even try to say the PLCB doesn't use tax dollars. Every penny they take in is a use tax, if it weren't, you would be allowed to "use" it someplace else. Like ordering wine direct from a producer.)

So there you have it, the system that some people think will increase sales $325 million above what they do now with those 55 wineries who are currently signed up. Why shouldn't it? It has all the convenience and consumer friendliness we have come to expect from the state stores these past 80 years.

We are not safer, we are not better served and we are not satisfied. The government should regulate, not retail. Move Pennsylvania back to normal.

Don't mend it: end it.


Classic Steve said...

Why have state stores gotten bigger and bigger over the last 30 years? I'm sure most people didn't really notice a difference, and kept on going out of state anyway, to avoid the PLCB shopping experience altogether.

Lew Bryson said...

They aren't THAT much bigger. There are a lot more brands of almost everything these days, too, and the State Stores had to grow to hold their small amount of them.