HISTORY

For the first time a liquor privatization bill has passed the Senate. It took 82 years but there is light at the end of the tunnel for Pennsylvania consumers. While there is no guarantee a deal can be made with Governor Wolf the next election rotation looks good to increase the Republican majority enough to over ride his veto.  Perhaps by then he will be able to read the writing on the wall and do what most residents want.  Close the state store system.

Please don't forget to write your Legislators to thank them or to point out the folly of trying to hold on to the past.
END IT! DON'T MEND IT!

The ISSU decides the PLCB isn't so bad.(for the moment)

Our friends at the ISSU (Independent State Store Union, the union of the liquor store managers) have been fairly quite about privatization, I guess it is hard to side with the PLCB when you have said:

"The PLCB/industry makes a mockery of the control system for the common good when encouraging and incentivizing people...(4/13/11)"

"No other state in the country takes a more derelict approach to alcohol policy."

“With this announcement the PLCB continues to foster a climate of increasing consumption which is incongruent with their responsibility to establish policies intended to minimize the harms of alcohol (4/28/11)"

These were pretty good too:

"And, in pursuit of their delusional effort as a wannabe “world class retailer" , they have also implemented multi-million dollar advertising campaigns for the promotion of alcohol sales" (12/9/11)

"In their lust to act as a ‘world-class retailer,’ the current management with the PLCB has denigrated all past and present employees..."(6/21/11)

"The schizophrenic model of the current PLCB Board and management is anathema to reasonable control and responsible alcohol policy."(6/21/11)

I'm sure if you said the same about your boss you might be looking for a new job.

So in only the third press release in the past few years about privatization the ISSU decided it was better to protect their jobs then to continue to tell the PLCB they are incompetent and came out with the following.  I'll inject some comments as you read it.

SOS...how appropriate.

This may be your last chance to voice your opposition to the bill to your elected officials. Call your state senator and state representative NOW and tell them to vote NO on House Bill 466!

June 29, 2015
In an attempt to provide additional revenue for the 2015-2016 budget, the Senate is poised to consider a bill that would divest the state of the current liquor store system. While it has been widely stated that the current liquor privatization plan will generate an additional $220 million for the General Fund, one aspect of the plan has not received nearly as much publicity - where the additional $220 million comes from.

The simple and honest answer is from the pockets of consumers through higher shelf prices on liquor and wine.

As Senator McIlhinney pointed out Sunday morning on the CBS 21 news show Face the State and again Sunday evening in a Senate Law and Justice Committee meeting, we cannot divest the current liquor system, maintain current revenue and generate an additional $220 million without expecting the cost of liquor and wine to increase dramatically.

So much for the promise of "better prices" under a privatized system as promised by privatization advocates over the last four years of this debate.

Like other retail items you buy, every single one in fact, the price is not the same everywhere.  Mr. Troyan somehow forgot to mention the license fees, business taxes, increased employment, increased sales and reduced border bleed due to greater convenience, the reducing of public debt and the lease of the wholesale business in his letter....I wonder why? All those revenue streams don't exist under modernization and those supporters claimed they could get an extra $185 million without those revenue streams so is $220 million that far fetched?

The PLCB operates on an effective 45.2% markup so that does leave room for profit in a private setting. Will you pay the same for a bottle of JD at a smaller local store as you would at a larger liquor store? I doubt it, but then you pay more for milk in a convenience store than a grocery store too.  Same idea here.

Since the current privatization plan being considered by the Senate will increase the number of establishments selling wine and liquor for off-premise consumption from 600 to nearly 14,000, product selection will suffer as well. Very few of those 14,000 locations will stock the number of items available at the current state stores. The number of outlets will dictate that the overwhelming majority of retailers will limit their stock to the top ten or twenty items.

So, there goes the second major promise - better selection - that privateers have used to win public approval of their privatization efforts.

If only 5% of all stores stock more than the state stores we will still be better off (5% of 14,000 is 700 and the state only has 605 stores now) You can be assured that real superstores will want your business, stores that have more items on the shelf than the entire state does now. Of course not everyplace will have that anymore than every town has a Jaguar dealer. Consumer demand will decide not a bureaucrat in Harrisburg.

That leaves "convenience" as the only remaining argument to justify the divestiture of the current liquor system. Under this plan, "convenience" translates into 14,000 locations offering only the top ten or twenty products at highly inflated prices.

Are your constituents willing to pay the cost for this so-called "convenience"?
Pennsylvania already has the cleanest and safest liquor stores that carry a greater selection at a cheaper price than nearly all other privatized states.

While I know Mr. Troyan is trying to make a point he isn't doing a very good job. Having one place to buy beer,wine and spirits is only "so called" convenience to him for some reason  How many different soft drinks are in your local store? What is a larger seller, wine or soda and which has a higher margin? Do you really think stores will only have 20 items? Just something to think about.

Since PA is the second largest purchaser of wine and spirits in the US  for retail (8th for wholesale) one would think we would have the best prices but here is Mr. Troyan admitting that some private states do better. Maybe not entire states but certainly there are stores surrounding PA that do better on a regular basis. He apparently hasn't been to a Total Wine, Joe Canal's, Moore Brothers, State Line, Binny's, BevMo or a raft of others across the country that have more selection than any 2 PA stores put together. Some are even larger than any 2 state stores put together.

Please OPPOSE HOUSE BILL 466 and efforts to privatize and divest the current state store system.
Sincerely,
Michael A. Troyan, President
Independent State Store Union

Lastly, Mr. Troyan forgot one thing.  GOVERNMENT SHOULD NOT BE IN RETAIL AND ATTEMPT TO REGULATE THEIR COMPETITION AT THE SAME TIME.

People should be able to choose what they want and not have the state choose for them. Contact your legislators and tell them to support liquor freedom.

The Citizens say Democrats holding up Liquor Privatization.

 Commonwealth citizens — we, the people forced to shop at State Stores — issued the following statement today.

The Citizens are disappointed in the House and Senate Democrats for not being able to help put together a budget that builds on the record education funding of last year and provides the relief from the state store system we have been asking for over the past 45 years.

Citizen spokesman Joe Sixpack reiterated that "There has never been a scientific poll in favor of the state stores. Given the choice of our current system or what the people see in free states they choose freedom every time." He continued with, "The state stores will never be as convenient as 1800-2400 private stores are, they will never be able to provide the selection of what a real super-store can, stores that have more on the shelf than the entire state stocks.  They will never have the expertise that can be found in private retail. State stores will never be able to satisfy the consumer the way the private market can - just look at EVERYTHING else you buy to see that."

The Citizens also want to be able to buy wine in a grocery store to go with their meals as is the norm in over half the states.  "While the goal would be able to buy wine at the same checkout as the food purchase we realize that such freedom may come as a shock to a number of people and fully expect the PLCB to make it as inconvenient as possible in order to uphold their mission statement." said a previous Citizen's press release.

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The Citizens represent most of the 12 million people in the Commonwealth who work in the southeast, northeast and central, western and all parts of  Pennsylvania in supermarkets, drug stores, food processing plants, government services, manufacturing facilities, nursing homes, professional offices, and all businesses, except Pennsylvania's "Fine" Wine and "Good" Spirits Stores.

Progress

In 1933...this was what you drove:

In 1933...this was how you washed clothes:

In 1933...your phone was only as smart as the operator:

In 2015...this is still how Pennsylvania sells liquor:

1933: brought to you by Pennsylvania's Democratic legislators, assisted by The Senate Republicans of SouthEast Pennsylvania, cheered on (and funded) by the UFCW. Ain't it great to buy booze like Great-Grampa did?

PA House Democrats drank the PLCB Kool-Aid

Thinking the Democrats in the PA Legislature might suddenly, somehow come to their senses on normalization of the PLCB? Forget it. All the quotes below are taken from the PA House Democratic website. It seems that they have their own way of looking at things that may or may not match reality. Let's take a peek.

Facts?  Nobody posts facts on the internet!

"By modernizing and increasing convenience for customers, the stores would generate at least $125 million more per year once the changes are fully phased in."

That extra $125 million, even if possible, has to come from someplace and that place is you the PA consumer. Since they only make about that now with the prices they charge, how do you think they will double it? As for convenience, the number of stores has decreased by 25% since 1970, from over 750 to 605, and 7% of that loss is since 2010. Ask the people with only one or two stores in their entire county how convenient the state store system is.

"Recently, privatization in other states has brought higher prices and reduced selection in grocery stores."

There is only one state that "recently" privatized: Washington in 2012. Anyplace else was over 25 years ago and can hardly be called "recent" in my opinion.  So privatization brought reduced selection in grocery stores. Well, we can guarantee that won't happen in Pennsylvania, since they won't let us buy wine or spirits in grocery stores now! As for the higher prices, that's due to the higher taxes and fees that were imposed at the same time as privatization: can't blame that on the stores, that's just the greedy government. Don't want higher prices? Simple: don't raise the taxes!

Even if we look at states that did privatize 25 years ago we find that according to the PFM report and the State of Iowa itself -- they made more money. To quote the report, "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." For West Virginia it is said that not every county has a liquor store since they privatized and while that is true, NOBODY in West Virginia has to drive as far as some residents of Pennsylvania do. Let me say that again - NOBODY.

"In some communities, privatization would lead to the opening of more liquor stores, while in more rural areas, consumers might not have access to a liquor store without driving out of their way."

Again using Washington, only one of 39 counties has less liquor stores now than they did before privatization and even that county still has a liquor store. As far as driving out of their way, I guess that is subjective since the House Democrats don't think a round trip of 75 miles is "out of their way" as this citizen does. Perhaps the two years the people of Mountaintop had to wait for a store to reopen in the same shopping center wasn't an inconvenience either. More liquor stores means more convenience. Of course there will be more liquor stores! Pennsylvania has one of the lowest store densities in the entire world, outside of countries like Saudi Arabia where alcohol is literally illegal. We have been under-served for decades.

"PA Wine and Spirits stores carry 30,000 products, with an average of 3,000 in stock at any time. The stores provide or support 4,000 family sustaining jobs in every county in Pennsylvania."

Not to get too much into semantics, but if you have a product on a list -- that you don't control -- that just means it MAY be available in your system. There are private stores with 11,000 wine and spirits in stock, on the shelves, more products than in the entire state of Pennsylvania, and they can (and happily will) special order things too. There are none in Pennsylvania, of course, but they are easy enough to find. Just look across our borders. As for the jobs, over a third of all PLCB employees are part time and that isn't a "family sustaining" job. That leaves about 3,000 full time employees and not all of them work in the stores or support the stores so that 4,000 number is certainly high. The PFM report doesn't agree with it either. In any case, the states and provinces that have fully privatized tripled employment in the industry.

State Store Motto

And finally in an outright lie they finish up with:

"A June 2014 poll by Franklin & Marshall showed that more than half of the people questioned (57%) said they preferred to modernize the State Wine and Spirit Stores, rather than sell them off."

Too bad that the real number is 32% as shown on page 16 of the poll.  BTW, it went down in the March 2015 poll too. There has never been a scientific poll that shows the people want to keep the state stores, not once, not ever in 80 years. Maybe because we don't want the state store system and never have.

END IT, DON'T MEND IT.

65 years of research isn't enough

I've been fighting this for a while now but there is only one conclusion I can come up with:

Some of our legislators are idiots.

There, I said it.

Reading the bills floating around that pertain to Liquor control one has to wonder what and why they are thinking some of these things. Who might they be pandering too? Some are pretty obvious and others not so much. I'll give you a few...strangely specific examples.

HB 619 - A bipartisan bill to change the requirements on who can hold a wine auction for a charity or non-profit. One of the limits is that you have to be: "(6) any nationally recognized community-based voluntary health organization committed to fighting cancer which has been in existence for at least ninety years"

Well, guess what...that leaves only the American Cancer Society.  Groups like the  Leukemia and Lymphoma Society, which has only been around since 1950, don't qualify to have a wine auction to help them raise funds.

Sticking with HB 619 you have: "(7) any nationally recognized emergency response organization that offers humanitarian care to victims of war or natural disaster and has been in existence for at least one hundred twenty-five years"

Find another organization besides the Red Cross that fits those limits. Now if you live out in the sticks (a county of the third class) and raise guide dogs, for example, you could have opened last week and get an auction permit if HB 619 passes. Don't live in a county of the first or second class - they don't quality at all.

It isn't just that one bill. Here is HB 770, which has limits like this: "a club which has been issued a club liquor license and which, as of December 31, 2002, has been in existence for at least 100 years" This limits it to a handful of clubs like the Philadelphia Club and the Westmoreland Club, the only two I can think of off the top of my head. I'm sure there are a few more. Nationally chartered clubs like the VFW and American Legion don't have an age requirement.

Then you have HB 55 which wants to expand the Liquor Control Board from the current three incompetents to six incompetents, with an additional three members from the industry for a total of nine -- with full pay and benefits of course. Here's a better idea: just require that one of the current three come from the industry. You're welcome.

HB 121 means well...if you happen to be in favor of skirting the minimum wage and child labor laws - to wit: "Notwithstanding any provisions of law to the contrary, a hotel, restaurant or club licensee may permit a minor of any age to perform music so long as the minor is not compensated and the minor is under the supervision of a parent or guardian."  The parent or guardian part also goes against the current liquor code which states a supervisor "shall mean a person twenty-five years of age or older who is directly responsible for the care and conduct of a minor or minors while on the licensed premises and who keeps the minor or minors within his or her sight or hearing." Are there so many 8 year olds who are being prevented from crooning at the local saloon that we need a law passed about it and why shouldn't they be paid if they do?

HB 412 Wants to add "neighborhood improvement district management associations" as eligible entities - without any age restrictions. So start one today, get you a liquor license!

HB 483 Wants to redefine what Cider is and, to me, in a seemingly odd way by limiting the amount of flavor and carbonation. But it does remove the limit it can only be made from apples and it raises the alcohol content from 5.5 to 14%. My question is why not make it the same as beer which has no proof limit? Better yet, ask the people who know.

HB 488 Will raise penalties for licensees that sell to minors. Which is fine, great, but why doesn't it apply to the State Stores? Because they are never checked by any outside agency or police force for sales to minors, and they aren't "licensed."

Not to be outdone, the Senate also has some silliness going on with liquor control. Everything from "Modernization" SB 15 which readers know I've dissected already, to more "Eligible Entities" with age restrictions (SB 323)

SB 611 Will let the state stores sell lottery tickets, "except that no bond, insurance or indemnification may be required by the board" We all know that nothing (cough cough kiosk) ever goes wrong when the board does things.

This is about 20% of all the liquor-related bills introduced so far. Now you know why the liquor system in Pennsylvania is so screwed up. Wipe it clean and start again. Being normal isn't bad, but living in PA as a liquor consumer is.

END IT, DON'T MEND IT.