Monday, April 24, 2017

Reality check: how is "modernization" working out?

The end of February marked eight months gone of the fiscal year, and just under seven months of Act 39's "modernization" of the state's police-enforced monopoly on wine and liquor sales, changes that Governor Wolf trumpeted as "historic."

So things are booming for the State Stores now, right? Well...not exactly.

Remember how bailment was going to cut inventory costs and save the citizens all sorts of money? It may have but it didn't last. Inventory cost went up over 10% so far this year and has now gone up over 46% since bailment was implemented in 2012. It will certainly pass pre-bailment amounts next year with a modest 3% increase. For the same period of time, the inflation rate went up 6.2%. (2012 Inventory $175,902,668; 2017 Inventory (so far) $257,285,382; Pre-bailment inventory $265,816,891)

Still, with all that inventory they must be making more money right? Sorry! Total Operating Income is down almost 5% year to date, while total assets squeaked out a gain of 4.2%. Meanwhile, Total Liabilities jumped almost 16%, from $803.7 million to 930.5 million. (And you know who has to cover that; you and me, the taxpayers.) Total debt is up almost $50 million more than at this time last year; $264,454,330 or about $26 million in additional debt than at the end of last fiscal year. To be fair, the PLCB statement has numerous notations about 'See Note X, Table Y', but they don't provide what those notes are. Are they valid reasons, or just lame excuses? The public doesn't know, and the PLCB clearly doesn't think we need to; it's kind of like their selection, if they don't have it, we don't need it.

The Never-Ending PLCB Story!
The PLCB is selling more product while making less money. In desperation, they're dipping into reserves to make a big payment to try and fend off  privatization, blowing smoke as thick as possible so you don't notice that they're going even further in the hole with liabilities approaching a Billion dollars...all the while remaining as incompetent as ever.

The benefits of modernization? I'm not seeing any evidence of that extra $137 million the Governor said they would make, and I'm willing to bet I won't, with only four months left in the fiscal year.

How many reasons do you need to get rid of this broken system and replace it with one that works for the consumer?
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1 comment:

  1. AnonymousApril 24, 2017 at 9:39 PM

    How can inventory $$ rise so quickly when, under bailment the PLCB doesn't pay for inventory until at least 30 days AFTER goods are delivered to state stores? Theoretically, the consumer can buy a product 29 days before the PLCB has to pay the vendor. And, if the replenishment system is working, 3-4 weeks inventory at store level and 0 weeks at the distribution center under bailment should reduce inventory $$ to the agency. Mismanagement is the only answer.

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