Tuesday, August 4, 2015

"PLCB Modernization" means "PLCB higher prices"

Another installment in our ongoing series of revelations about why "modernization" is a scam.

We always hear about how the "PLCB Modernization" plans will make so much more for the state! But what they won't tell you is that they all work by taking more money out of your pocket. Here is one of sneaky little things they want to do that will cost you more. You don't see much about this item, as the PLCB has buried it pretty well. Well-hidden or not, it is one of their many ideas that will cost you, the consumer.
Because it's the PLCB way!
In the liquor industry there are specials that are offered called SPAs  or Special Purchase Allowances. By current law these SPAs have to be passed on to the consumer (that's you!), which is why you see  those sale tags on the shelves. The PLCB isn't making any less, as none of that reduction comes out of their pocket; they are just passing on the SPA.

However, the PLCB doesn't want to do that anymore. In sworn testimony, the PLCB said "With flexible pricing, the Board would be in a position to retain, and ultimately remit to the Commonwealth, some of the savings afforded by the Board's suppliers" In plain English? 'We aren't satisfied with making the exact same amount on sale items, we want to make more and have the citizens save less.' (I did a post last year about "flexible or variable pricing" if you want to review that.) In a worst case scenario, which is without a doubt what the PLCB will do, they could get an SBA, adjust the pricing upward and pocket 80-90% of the savings that were supposed to be yours.

Now, in the free market, a store will leverage those SPAs by not only using the reduction in their cost but by also cutting their margin to lower the price even further in order to attract customers away from other businesses. That is why sale prices elsewhere are more of a bargain than the sale prices in PA. The PLCB doesn't want to do that, though, because they need more money to cover their ever-expanding operating costs.

In 82 years, we have never seen anything done to change the liquor code to save you money. Benefiting the consumer is not what the Almighty Liquor Code is for, after all, unless it's about free drinks while playing slots. They have no problem with that.

It is time to END IT, not mend it. Get the state out of the alcohol business and into regulation where it belongs.

For parts 1-4 of this series see :
Part I,
Part II
Part III
Part IV 


Anonymous said...

As a Democrat (but yes the Democratic Party often makes me cringe, though I could NOT imagine myself as a Republican or independent), I can assure you NOBODY really believes in "modernization" at all. That's just a word Wolf is using to justify his resistance to privatization. Trust me, if the threat of privatization had never existed, the PLCB would still be REALLY stuck in 1933 today. ISSU would be pleased.

Albert Brooks said...

"Modernization" tripe was around long before Wolf but you may be correct about him using it instead of just saying "I like unions, they give me lots of money and I'm not going to screw with them." The rest is spot on.

Anonymous said...

Check this out: http://www.wswa.org/about/staff

Craig WOLF is CEO of Wine & Spirits Wholesalers of America based in Washington DC! Might he be related to Tom Wolf? I learned about WSWA when at a PLCB store because there was a WSWA "we don't serve teens" sign on the wall...

Albert Brooks said...

A quick check shows the last name of Wolf is in the top 500 of all names in the US. Doubtful they are related at any meaningful level. However, if you want to do the genealogy go for it.