Tuesday, June 30, 2015

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.
Michael A. Troyan, President
Independent State Store Union


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.


Anonymous said...

So are we for or against the current proposal? The conservative Bucks County Courrier Times slammed it as a complete sham. I'm getting mixed messages. I'm afraid once something passes and well heeled private stakeholders dig in we will be stuck with it for a very long time.

Anonymous said...

What is so independent about the Independent State Store Union?

Albert Brooks said...

I was just reminded of this one. Surely the best of the bunch:

"You are collectively the number one drug pushers in Pennsylvania. As puppets of the alcohol beverage industry, you have abdicated any role of being a regulator against the bottom line interests of the industry."

Oddly the ISSU doesn't list this little gem on their press release page but nothing ever is gone on the internet.


Anonymous said...

What I make of all this is that ISSU represents the Puritanical crowd who misses the time period when state stores were deliberately made to be as unwelcoming and forbidding as possible. But truth is, ISSU is stuck in the past. There was a time when the PLCB refused to advertise anything and (especially when its stores were the counter model) did everything to encourage "get in, get out" shopping at state stores and to discourage any temptation of lingering.

If the PLCB all along had done what ISSU wanted, absolutely NONE of the "consumer-friendly" initiatives taken by the PLCB would have ever happened. The stores would still be mostly spirits with very few wines. And guess what? Privatization would have come long ago, because people would REALLY have gotten sick of state stores had they stayed how they were. The PLCB has made a lot of changes in the past 30 years to save its own behind.

As for the UFCW, they at least embrace modernization rather than opposing both modernization (they even opposed the conversion to self-service in 1969) and privatization. ISSU has been around since 1949 but the UFCW 1776 only began its relationship with the PLCB in 1971, which might explain why the two unions have conflicting beliefs. And hey, all the UFCW cares about is seeing its member stores NOT go out of business. The union supermarkets have mostly been struggling, closing and putting UFCW folks out of work, so the UFCW naturally will do anything to protect the government monopoly that uses its services. Privatization threatens the monopoly's existence, but as long as Democrats run the show, state store employees have nothing to worry about. In contrast, union grocery workers always have to worry about the threat of store closings... and not surprisingly, union grocery chains are failing because a competitive free market allows much better chains to exist.

Albert Brooks said...

The ISSU has an inferiority complex. State store managers really don't manage anything. The have no say where product is placed, have no say who works at their store, have no say on product selection, have no say on delivery, have no say on training, have no say on hours, have no say on much of anything a real manager in a real retail setting controls. They are pretty much just a title only, basically a clerk+.

My conversation with the former ISSU president last night shows an innate lack of control and knowledge that one would expect from a union thug and not a person in that position. Another in a long list of reasons why the citizens hate the state store system can be traced directly to leadership like that. Rotten at the top, rotten at the core.

Anonymous said...

You actually had a conversation with a real person? Did you wear a bag over your head?
Do we have to stop calling you the "cowardly drinking class hero"?

Lew Bryson said...

Said "Anonymous."

Albert Brooks said...

Call me whatever you like, it isn't going to change a thing. However, I do appreciate that you are thinking of me which is more than I ever do for you.

Anonymous said...

Hey anonymous and Sam are the only ones that ever post! The rest are one.