Friday, July 28, 2017

Big PLCB Price Hike May Be Coming!

The PLCB is playing hardball with their suppliers, and it looks like part of the process is threats in the media. Check this out from a recent story at KDKA's CBS Pittsburgh site titled "Prices Of Best-Selling Wines & Spirits To Rise."
The PLCB’s Elizabeth Brassell says the suppliers have been told the price for their product is going to go up on the shelf, “unless our suppliers of those products offer us lower acquisition cost to avoid the retail price increases.”
Brassell says the price increases affect “the best-selling 150 brands of spirits and best-selling 150 brands of wine.” In other words, probably your favorites.
You know what we have to say about that, right? Welcome to Flexible Pricing...we told you so! You know why it's going to affect the 150 best sellers? Because those are the only PLCB products covered by Flexible Pricing! Everything else is still under the mandated markup. 

Here's what the PLCB thinks is going to happen. The PLCB is going to hammer the producers in negotiations! They'll balk at lowering prices, because they know the PLCB isn't going to lower the price on the shelf (because they promised to make a LOT off of this), the PLCB will make this childish "don't make us raise prices!" bid in the press, figuring the producers will lower prices, and then they can say "look, your prices stayed the same, we are HEROES!!" while sucking off all the difference to cover their spiraling operating costs and hold off privatization for another legislative cycle...and the producers will call their bluff, and give 'em nothing.

And the PLCB will just have to raise prices and look like the inexperienced amateurs they are, we'll get screwed, border bleed will explode, and maybe, maybe we'll finally tell our representatives to get rid of this moldy old piece of Prohibitionist crap.
The PLCB Act .39 Special, only one made.
And here's the beauty of it all. If I were the producers... I'd be saying "Screw them. Jack the prices, blame it on them, and maybe Pennsylvania will finally wake up and get rid of these idiots. This is our chance!" Run the long game, booze folks, run the long game, and help us dump these rubes.

Because you know what I'm going to do when the prices go up at the end of August? Hop in the car and go buy booze in Delaware. Why not come along? Let's dump these rubes!

Great New Profit-maker for the PLCB!

Great news! As reported here on, and in more detail here from the Justice Department's own website, four companies have been ordered to pay a total of $9 million in fines for their role in the unethical practices of three PLCB officials: P.J. "PJ" Stapleton, Joe "Da CEO" Conti, and James "Fall Guy" Short. It took over four years, but they're paying, and even when you're selling booze to a monopoly that doesn't care about its customers, that ain't chump change.

We were glad to see this, since we fully support telling the truth and stating facts, even if they don't necessarily make the PLCB look bad. That's not our main mission: our main mission is proving that the current system is outdated, not good for customers, and yes, naturally prone to corruption and abuses like this. We were also glad to see that our friend (no, he doesn't know it, but he is, just like Joe "Da CEO" Conti was) James "Fall Guy" Short still hasn't been sentenced almost two years after his conviction on fraud charges. Hmmmm...wonder why that is? Bet a lot of current and former PLCB employees are wondering too.

Dat's a right: Malocchio!
Anyway, the comments gang — usually a heap of steaming crap; angry steaming crap — managed to come up with a great idea related to this! Check this out from a genius calling themselves Malocchio: "Maybe this can be a new revenue generator for them... entrap their vendors into giving gifts, then assess confiscatory fines against them... instant profit!"

Brilliant. In fact, too smart for the PLCB. It would all fall apart shortly after the gifts were received...and the employees spent them and asked for more. Hey guys! Remember the "entrapment" part? The trap's gotta spring! Guys? Guys?

End the corruption. Privatize now. Not after more "studies," not after more "hearings," not with all the states where privatization works to look at. 

PRIVATIZE NOW. In fact, right now would be a GREAT time: swap the Democrats a fracking tax for full and immediate privatization. Get what we want, balance the budget, and chances are good no one would really even notice the frack tax. Let's do this, PA Legislature, the citizens are waiting.

Thursday, July 20, 2017

Pay no attention to the man behind the flexible pricing...

Back in October of last year, PLCB Chairman Tim Holden (a political appointee, with no major business experience)  put out this piece of propaganda, trying to fool us into believing that the PLCB's new "Flexible Pricing" was good for them. (We've been telling you for years it's a bad deal for consumers, but the Legislature handed it to the PLCB.)

Holden gets off to a bad start by using an example of Pennsylvania's "top selling Bourbon," Jack Daniel's. It isn't Pennsylvania's top selling's Tennessee Whiskey, says so right on the label. A small strike, but the kind of product ignorance that's typical at the PLCB.

But it's what he has to say about Jack that's interesting. "In February 2016, Virginia’s price per bottle from the supplier of this product was $12.14, while Pennsylvania’s was $14.46. The retail shelf price on June 1 in both states was the same: $24.99." This just shows that the PLCB was too incompetent or lazy to negotiate better pricing for 82 years, and despite what they might claim about their new flexible pricing powers, there was nothing in the liquor code that prevented them from doing deals on pricing.

Now he gets to the flexible pricing shim-sham. "If Pennsylvania had been able to obtain Virginia’s lower price – $2.32 less per bottle – we would have achieved an additional $2.1 million in profit on that one product, based on the volume of sales in Pennsylvania. Or we could have reduced the retail price, or even a combination of the two." (emphasis added...for emphasis)

And here it is, nine months later...and Pennsylvania's #1 selling "Bourbon" hasn't changed price at all. They are keeping every penny of every negotiated price to the top ten selling wine and liquor brands, all but one: Nikolai vodka pints (the alcoholic's favorite), which have gone down 30 cents. Hey, thanks. Really appreciate it, PLCB.

It's all too clear: the PLCB (owned by YOU, they say) is screwing the citizens on a daily basis, over-charging on numerous items, especially their lottery items. A prime example is the 60% average price increase they charged for this year's Van Winkle releases, and the extra $570 they charged for the 3 bottle 'package' and the extra $860 for the 5 bottle 'package' on top of that. Or maybe the extra $100 they charged for the Buffalo Trace Antique Collection? Make no mistake, you as a consumer come in last in the PLCB's quest for survival. The Chairman even admits it "As we’ve said all along, prices will increase for some items, when the supplier and PLCB agree that the market can bear the increase."

"Charge what the market will bear" is a cornerstone principle of the free market, especially on "luxury items" like booze. You can see it in the beer market, for example, where craft beer prices continue to rise mainly because customers continue to pay them (so far). But those prices are kept in check by the knowledge that another retailer may sell for less and get the sale.

As a police-enforced monopoly, though, the PLCB can raise prices and the market - meaning you and me - has no other choice: we can't go to another retailer (or another state...), we have to bear it. Bet you didn't know that it was fine for a government agency to gouge you. Imagine if the Turnpike Commission had "flexible tolling." When did things change so that the government would treat you fairly and justly IF they made enough money from you?

So how will you know if the PLCB is cheating you?  You won't, because they don't have to tell you their secret pricing decisions. While they don't have any problem outing Virginia, the PLCB no longer lists the price they paid for their products. The official PLCB excuse is:
"Act 39 of 2016, which became effective in August 2016, granted the PLCB authority to negotiate product acquisition costs with suppliers for the most popular wines and spirits carried in Fine Wine & Good Spirits stores. The goal of these negotiations is twofold: to maximize revenue the PLCB generates for the commonwealth and to offer consumers fair and competitive prices. Subsequently, the PLCB removed product cost and retail price information from Board agendas and minutes in the interest of optimizing supplier negotiations. Additionally, now that the PLCB can act more like a traditional retailer with regard to pricing, it is not in our financial interest to give other alcohol retailers advance notice of our prices and sales."
But a traditional retailer has competition, not a police enforced monopoly! I'd like to know what other alcohol retailers are they talking about. Do you really think that Mondavi doesn't know what Gallo is charging, or Buffalo Trace doesn't know what Beam wholesales their bourbon for? If the PLCB knows what Virginia is paying, don't you think the distillers have a pretty good idea of what their competition is doing? I know that competition is a foreign idea to those at the top of the PLCB, but that is what keeps prices down for everything else you buy, not allowing some entity to charge whatever they want and then MAKE you pay for it.

Being the Chairman of the PLCB is the bizarro version of being Harry Truman, without the ethics or personal responsibility. "The buck passes here," is that right, Tim? Nothing is ever their fault no matter how idiotic (wine kiosks), misogynistic (date rape ads), anti-PA  business (Tableleaf et al), anti-consumer (any monopoly is anti-consumer) or just plain stupid (whatever happened to the PLCB Savor magazine, and the drink recipes that need things the PLCB doesn't sell?) Any Chairman claiming any responsibility for any of those things?  Didn't think so, and Mr. Holden is certainly not going to be the first.  

Stop being fooled.  The PLCB does not exist for the benefit of the citizens, it exists for the benefit of the PLCB. Anything to keep the pigs at the trough is what they are for and anything that resembles real business with real competition is what they are against. Starting at the top with the Chairman..