Monday, November 30, 2015

Why Its Not Safe To Go Into The Woods - A PLCB Horror Story

Not satisfied that their stupid laws, random enforcement, idiotic "interpretations," and never being checked for underage sales are killing enough citizens, the PLCB figures that having more stores open with longer hours for the start of hunting season fits their goal of  " exercise of the police power of the Commonwealth for the protection of the public welfare, health, peace and morals of the people of the Commonwealth...:

So while DUI, Underage DUI, DUI Fatalities, Underage DUI Fatalities, Binge Drinking, and Underage Binge Drinking is worse in PA than most of the border states, apparently drinking, driving to game lands, and hunting is perfectly acceptable and even encouraged by the PLCB.

They are getting sneaky about it too. In my first blast at this insane policy in 2013 they put out a separate announcement stating that these stores would be open early just for hunting season.  I'd link to it but the PLCB no longer  has it listed. In 2014 they combined it with the Thanksgiving holiday extended hour increases as shown here. Now they are trying to just outright hide the fact they are expanding store hours for hunting season by not listing it at all.  When you look at this year's announcement there is no mention of  Holidays or Hunting Season. All you get now is a flat "The following stores will have extended store hours in late November." However, if you look at the stores that are open or have extended hours on November 30th it is only because of hunting season.

So if you find yourself in the woods on November 30th, remember that the PLCB did their best to make sure all those people with guns were able to get liquor. I wonder how many cows would survive if they didn't ?

Wednesday, November 25, 2015

What the PLCB thinks

What the PLCB thinks the consumer sees

While the consumer really sees is this:

What the PLCB thinks of their apron specialists:

What the public really thinks:

What the PLCB thinks of their customer service:

What the consumer thinks of their customer service:

What the PLCB thinks is a "superstore"

 What the rest of the country KNOWS is a superstore:

What the PLCB thinks of their business:
 What their business really does:

The PLCB does nothing for the state. We are not safer, we are not better served and we are not satisfied.

Thursday, November 19, 2015

One picture says it all

All you need to know about how the people feel about liquor privatization. (click the pic)

Tuesday, November 17, 2015

Wine spectator's Top 10 - Or The PA Wine Desert Pt. 3

Time once again to see how the PLCB with all their highly trained wine people did compared to some folks who really are highly trained. The Wine Spectator Top 10 is coming out. As they count down, I'll be checking to see if PA somehow managed to luck out and actually have some of these wines available.

Let's finish the top 10:

# 6. Bodegas Aalto Ribera del Duero 2012, 2400 cases

# 5.
Mount Eden Vineyards Chardonnay, Santa Cruz Mountains 2012 1986 cases
SLO ONLY CASE OF 12 (Oh, the PLCB price is 11.5% higher than list price too)

# 4.Il Poggione, Brunello di Montalcino 2010 18,000 cases
Currently available in 21 state stores

# 3.Evening Land Pinot Noir Eola-Amity Hills Seven Springs Vineyard La Source 2012 1176 cases

# 2. Quilceda Creek Cabernet Sauvignon Columbia Valley 2012 4125 cases
Currently available in 9 state stores, PLCB price 41% ABOVE list of $140!

# 1.Peter Michael Cabernet Sauvignon Oakville Au Paradis 2012 1785 cases

So there you are, the PLCB stocks 2 of the top 10 if you want to pay a 40% premium for one of them and they say they can get another provided you want to buy a case and pay 11% more than list.

The question isn't if you can find any or all of these wines in one store. The question is can you find them in entire states and the answer is of course, yes.  In places that have to live by their knowledge of not only wines but of their clientèle there are a number of stores where more than 2 of the top ten can be found and states where they ALL can be found.

Until next time, I'll see you out of state.

Monday, November 16, 2015

Wolf's Privatization Plan

"The state would still be running the system, but they would be leasing it out, That is privatization.” Jeffrey Sheridan, Governor Wolf’s press secretary.

Hired by the government, paid by the government, given offices by the government, but "that is privatization"? Wolfonomics is spreading! Now there are two people who are completely ignorant of economics over the past 200 years. Goes with the "Competition raises prices"  mantra the Governor tried to use when he vetoed the privatization bill.

This is the Wolf system in a nutshell:

Wednesday, November 11, 2015

A PLCB Mystery - The Case (or Ten) Of The Missing Four Roses

Ever watchful, our intrepid sleuth is always on the lookout for ways the PLCB pays lip service to taking care of the citizens. 

On August 21st, Four Roses sent out a press release listing what this year's Four Roses Limited  Edition Small Batch will be, and more importantly, how MANY they planned to make. There was to be a release of about 12,600 bottles total. From what I have learned over the years, about 80% stay in the U.S., and the remainder are for the rest of the world. Can I prove it? No, allocation is a very closely-held card by the distillers and distributors, since there is always somebody who will take issue with it. Needless to say, like any other business, good customers usually will do better than ones that are more difficult (I bet you can see where this is going).

So about 10,000 bottles of this year's Limited Edition were destined for U.S. customers. Dividing up by state would yield 200 bottles per state. Great for North Dakota and Rhode Island; not so good for the rest of us. Allocating by population is a more fair way to guess, and with 4% of the U.S. population, Pennsylvania would get about 400 bottles.

So how many did we actually get? 24 bottles were announced to be sold in a lottery; registration ran from 8 a.m. Oct 26th to 11 p.m. Oct 31st. (No surprise that it didn't actually open until about 8:30 a.m.) But wait!  There's more! Right after the lottery was announced, I wrote a letter to the PLCB asking where all their buying power was and why they had such a poor relationship with the distributor that we got well below what we normally would have. Imagine my surprise when 3 days later, the PLCB announced they had gotten another 42 bottles to raffle off, for a grand total of 66, of which 16 would go to licensees.

No. This is not for you 
silly PA consumer.
Is that fair?  We'll never really know, because we won't know how many bottles the PLCB really had, since they had it listed as an SLO item in August, weeks before the lottery announcement. However, if you called and tried to order it you were told it was a "licensee only" item. So how many were sold to the bars and restaurants the first time, before they got ANOTHER chance? Why did the state get so few to begin with? Is this an indication of what is really thought of the PLCB? Or did the public just get screwed by the PLCB because a normal amount was allocated and they sold it to licensees first?

Also, who is watching all these lotteries?  The PA lottery is certified by outside public firms, the PLCB lottery is...what? I haven't seen or heard about any safeguards in place. Who checks to make sure this is all on the up and up? Are we just supposed to believe them? I'm not saying it isn't legitimate, but I am saying it is hard to believe, when the transparency at this agency is like looking in the Susquehanna after a rainstorm. They certainly haven't done anything to earn my trust so far.

Get rid of the state store system and move Pennsylvania back to normal.

P.S. For those keeping track we reached a small milestone. This is the 400th post of the blog.  It took us seven and a half years to get to this point.  Here is hoping that our job will be done long before we reach 500.

Tuesday, November 10, 2015

Wine spectator's Top 10 - Or The PA Wine Desert Pt. 2

Time once again to see how the PLCB with all their highly trained wine people did compared to some folks who really are highly trained. The Wine Spectator Top 10 is coming out. As they count down, I'll be checking to see if PA somehow managed to luck out and actually have some of these wines available. Here are the next two,

Let's begin.

# 8. Masi Serègo Alighieri Vaio Armaron 2008, 3750 cases
There is one that is close but it is a 
Classico Riserva Costasera 2008 and this one is not

# 7.
Kupe Single Vineyard Pinot Noir 2013

I've included a picture so if you want to go to New Jersey, New York or DC for the MASI or just New Jersey and New York for the Kupe.


Wine spectator's Top 10 - Or The PA Wine Desert Pt. 1

Time once again to see how the PLCB with all their highly trained wine people did compared to some folks who really are highly trained. The Wine Spectator Top 10 is coming out. As they count down, I'll be checking to see if PA somehow managed to luck out and actually have some of these wines available.

Let's begin.

# 10. Klein Constantia Vin de Constance 2009, 2500 cases

# 9.
Clos Fourtet St.-Emilion 2012, 3500 cases

I've included these pictures so you know what to look for if you go to New Jersey, New York or DC since they have them in stock

Monday, November 9, 2015

Modernization won't do what the people want; Part V

This is just a reminder that what the PLCB says, and what the PLCB does are not always the same thing.

"Beginning January 2, 1934 and continuing as rapidly as alterations can be completed, 240 liquor stores will be open in Pennsylvania at convenient places to serve the public." (PLCB statement issued on the opening of the first 64 stores)

That statement, made almost 82 years ago, shows the failure of the entire State Store System. Is not making stores "convenient to the public" part of every modernization plan you have ever heard? They have been promising to do that since Day One and have failed miserably, especially considering that they have had over 80 years to complete the task.

Is having 25% fewer stores more convenient? Is stringing the public along for eight decades more convenient? Is having one or two stores in entire counties more convenient? Is having the PLCB at all more convenient?

Since the Liquor Code was created in 1951, the PLCB has had total non-legislative control over store size, store location, and hours of operation (except Sunday). If they wanted larger stores, they have had 64 years to lease them. If they wanted "more convenient" stores, they have had 64 years of total control of placement to do it. If they wanted to be open anytime from 7 a.m. to 2 a.m., they could do it. They have done none of it.

So don't believe me: believe the PLCB and ask yourself if they have managed to accomplish what they said they would do over the past 82 years?

Thursday, November 5, 2015

Please donate to the PLCB Super-PAC

Based on the previous leadership of the PLCB, we all know they want more than just a simple feeding at the public trough. Booze, jobs, trips, sporting events, and men's clubs are just some of the extra perks they were looking for.

How can we use that to get the PLCB to actually do some of the things that we, the citizens, wanrt? Enter the PLCB Super-PAC. Those PLCB officials can't coordinate with the PAC to tell us what they want, but we can guess pretty well. Sure, thanks to Governor Tom "Don't Take That Cookie" Wolf, they've signed another "I'll be a good boy" pledge, but that hasn't stopped anything in the past. Besides, they won't be asking for anything and we won't be giving them anything.  It will all be leased or loaned for "research"  (nudge nudge, wink wink)
This could be the new PLCBMobile
Imagine that a new Porsche shows up in the PLCB's driveway with a note saying it is free to use for as long as the agency wants; maybe the director of product selection should try it out. (P.S. We want more different flavored vodkas.) See how well that has worked in the past! Imagine how we citizens can make over the state stores.  Want more than one or two bitters? A reservation at Barclay Prime or Prime Rib at the Warwick in Philly for the Board may be all it takes.

Real innovative ideas like a specialty spirits shop in Philly and Pittsburgh may take a bit more ingenuity: maybe letting a few Directors "find" a pre-paid week's worth of tennis lessons at the Burj Al Arab in Dubai. I'm sure the PAC can think of something.

This could be Mike and Skip!

Please make your non-tax deductible contribution to the PLCB Super-PAC, so another generation of Pennsylvanians don't have to suffer like we have for the past 82 years. If they won't privatize, we'll just have to pay them to act normal.

Do it for the children.

Paypal, Visa, Mastercard, American Express, K-Mart, Target, and Diner's Club accepted,
Burj Al Arab
Burj Al Arab
Burj Al Arab
Burj Al Arab
Burj Al Arab
Burj Al Arab
The Burj Al Arab
The Burj Al Arab

Monday, November 2, 2015

PLCB 2015 Financials - Trying to make the best of a bad situation

Accountants speak their own language. I don't mean like from a foreign country: from a different planet altogether. They make money appear and disappear based on perceived changes in procedures, making it extremely difficult for the average person to figure out what the heck they are looking at when going over financial statements.

That's by way of presenting the PLCB's long-awaited Financial Statement for FY2014-15. Apparently they just couldn't delay it any longer (one little upside to the ridiculous delay in the state budget process). Instead, they resorted to Accountantese to make it hard to figure out just what happened. Not only have they changed some of the layout of their statements, they changed some of the wording for the exact same line or item in the current report and between last year and this year.

A quick example of how the same thing is called different names is on page 4 of the report: the difference between Sales Net of Taxes (gross sales) and Cost Of Goods Sold (COGS) is called "Gross Revenue from Sales." On page 5, the exact same number is now "Gross Income from Sales." A minor point, but why?

The big change this year is that because of new state accounting rules, the PLCB finally had to list pension obligations. While that causes comparison problems of its own (since they don't include last year's numbers so you can see any changes), it does show that without paying off pension debt at a much greater rate, the PLCB will be in the hole for years to come (as we've been saying all along).

It would have been nice to see if the overall debt went down for this fiscal year compared to last but those figures aren't provided.  However, there have been numerous sources that have stated that overall pension debt went up last year without actually providing any numbers to back it up. My belief is that pension debt did go up, but we'll have to wait and see next year's numbers to find out if it really did continue to increase over this fiscal year too.

Medical Liability went up from $63.63 million to $76.65 million from last year or about 20.5%  and Workers Comp increased an astounding 62% from $25.9 to $42.1 million. So including all of that the PLCB now admits to being "only" $240 million in the hole from being $77 million to the good last year. Just so you understand: that is $77 million from last year plus whatever they thought they made this year (about $80 million) and they are still $240 million down.

I'm going to look at how the stores did overall --  not how investments or deferred inflows and outflow went or the non-operating costs -- and compare them with last year. Without further ado, here we go. (Remember, you can follow along with their report here.)

Sales: Sales went up 4.2% while COGS only went up 4.1% and the effective markup moved up slightly to 45.35% from 45.2%.  No big surprise there: the population went up, prices went up, and the economy is getting better. The surprise would be if sales hadn't gone up; it's a monopoly, after all.

Operating Expenses: Now we come to the heart of the matter: how efficient is the PLCB in turning all those sales into what they call "profit" (what I call an unspent use tax). These numbers DO NOT include Pension, OPEB, and Workers' Compensation Accounting Valuation Expenses from Net Income. It isn't pretty.
  • Purchase, Storage & Transportation costs up 13.6% 
  • Stores' Operation and Supervision costs up 17.4% 
  • Central Administrative Support costs up 11.2%.
  • Gross Operating Income down 24.6% 
  • Net Operating Income down 32.4%
  • Operating Margin down 38% 
All this even though the total number of stores and employees were about the same and this is with record sales!

A real business grows profit by doing one or all of these three things;
  • Increasing sales by taking them away from their competitors, which will never happen under the current system. Border bleed is not going to decrease - period. 
  • Becoming more efficient and controlling costs, which means not having Operating Costs increase 17% in one year. Also not likely. 
  • Becoming more innovative...and we all know what happens when the PLCB tries that: wine kiosks, cost overruns, and trailers full of boiling wine. 
Increasing sales are good, but not when costs increase at a much faster rate. That's just not good business...but we are talking about the PLCB, which is not a business. It's a government agency.
Any honest accountant would despair. Maybe the PLCB's accountants do.
To be fair: the PLCB did increase funding to the Keystone Kops of Booze, the BLCE, by 3.1%. However, to make up for that, they decreased Drug and Alcohol education funding by 48%. Peter, meet Paul; here's his money.

There are some unanswered questions in the report, such as why inventory totals went up over 11% when the much-heralded bailment was supposed to reduce those costs. It went up last year too, and the year before that. In fact, it has gone up about 31% over the last 3 years.

This might just be me, but...the valuation of land as listed on the PLCB reports hasn't changed since at least 1999 (which is as far back as I can go), and building valuation, another line item, has been within 1%, up and down, since 2005. A minor but interesting question. I know my land and buildings have changed value over the past 16 years, yours probably did too. You'd think all those amazing offices, conference rooms and "wine tasting lounge" would increase the value of at least one headquarters property, right?

I realize that these are unaudited numbers, but they aren't going to change that much (if at all), if and when an audit is done, so what you see is what you get. Another year with record sales and another year of lower Operating Income. The real question is how long can this trend go on before it isn't sustainable: how deep will the hole be next year?
Hey PLCB - you down there?