Friday, September 11, 2015

Still waiting on the PLCB and their computers

Here is is 2 months and almost 2 weeks after the close of the fiscal year and still nothing from the wizards in Harrisburg about how well they did or didn't do. Maybe covering their butts from Federal charges is taking up their time....who knows?
But you know what really hurts? Other control states already have their numbers in. Let's look at New Hampshire and see how they did. With a population of only 1,327,000 they somehow sold $652,000,000 in wine and spirits (or just over $484 for every man, woman, and child in the state) and at prices that are usually lower than our State Stores. Pennsylvania has a population of  12.8 million and sold $2,240,563,426 worth of wine and spirits. or $175 per person (2014 numbers because, you know, we're still waiting...).

The expected response from our fine Liquor Corruption Board workers is that New Hampshire residents are all "chronic alcohol users,"  because that's what they always say when confronted with anything that shows the state stores up, be it better selection, more sales, better staff...whatever. Let me put forth a different theory. People go to New Hampshire to buy liquor; and they leave Pennsylvania to buy liquor. New Hampshire makes shopping worth the trip by having better prices, better stores, and a larger selection than nearby competition. The majority of that competition is in Massachusetts, right on the border and the largest state in New England; they also have substantially higher booze taxes than New Hampshire...which has none.

What does PA have? Certainly New York has more people, and higher sales taxes with liquor taxes being pretty close, but we don't see that influx to make any real change in the Corruption Board bottom line. Ohio and West Virginia are control states too, so not much difference there. Most of Maryland is a free state with higher sales tax, lower liquor excise tax and higher beer tax than PA but still draws people across the border because competition drives prices down.

Delaware, as we all know, has no sales tax so that makes them less expensive right off the bat. But they also have stores with far greater selection than anything in PA to draw people in too.

New Jersey has a higher sales tax but a lower liquor tax. Mostly people go because of the selection and prices, again due to competition. The large stores across the river -- Joe Canal's, Total Wine, Moore Brothers, Roger Wilco, etc. -- are not there because of people living in New Jersey. They are there because of the people from PA who find better price selection and service even if they have to pay a toll to get there.

$300 million leaves the state every year and it isn't going down.
Border bleed is real and large and Governor Wolf's proposal to raise the sales tax here is not going to help reduce it, Putting in baskets and changing the name of the state stores is not going to help reduce it, "modernizing" is not going to reduce it, thinking about raising the markup when private stores think about cutting costs is not going to reduce it, and having one store for every 21,000 residents is not going to reduce border bleed either.

Privatization will.


Anonymous said...

New Hampshire state stores sell lottery tickets though. Perhaps that skews the comparisons to PA state store performance? After all, PA beer stores sell lottery tickets, cigarettes, soda, etc and that may make them seem more profitable than the state stores even if they really might not be.

Albert Brooks said...

Yes, I am sure that is the reason they sell over 175% more per capita. Lottery ticket sales.