Play "Who's the Dummy - PLCB supporters edition"

So much happening lately.  First you have the Governor trying to rewrite two centuries of economic theory by proclaiming that competition would raise prices. Then he told us that privatization would raise prices if taxes were raised...because we all know private stores set their own taxes.

Plenty of stupid, but wait, there's more! Not to be outdone, the brain trust at the ISSU (Independent State Store Union) came up with this gem: "Limited competition negatively impacts convenience." (They called it a "disaster," too.) I gotta ask: if limited competition has a negative impact on convenience, what does NO competition -- like with the PLCB -- do?  Don't forget, this is the union of the managers. We're not nuts about the service level at the State Stores, but you almost have to cut the workers some slack if this is what they have to deal with every day.

Proving that the ISSU doesn't have a lock on stupid, the UFCW (United Food and Commercial Workers) comes up with this gem: privatization will cause a loss of selection and higher prices...and somehow, at the same time, increase drinking. Sounds like they've fully embraced Wolfonomics. As everyone knows, the Governor thinks -- all things being equal -- increased prices result in more sales. It's a cornerstone of Wolfonomics, the corollary to Wolf's dramatic new theory that competition leads to higher prices. Forbes presented a brilliant exposition of Wolfonomics recently: "Opponents Of Private Liquor Sales Claim State Monopolies Serve Customers Better." Take a moment to read it, it's quite good. (I'm talking to you, Governor Wolf.)

While there can be no excuse for such idiocy in a government office or organizational headquarters, it does bleed down to some of the common folk.  Internet newspaper comment columns are full of people who know the PLCB made $550 million in "profit" (some think they made $1 billion in profits!), apparently believing that taxes will disappear if sales are privatized, and that other taxes will automatically go up to make up for these mysteriously disappearing booze taxes. (Tip to you: the booze taxes aren't going anywhere. Not a chance.) There are self-styled economists who don't know that revenue isn't the same as profit, and that neither of them include taxes. There are folks who think that every privately employed liquor store salesperson is or will be on welfare, and that nobody will be hired even if the amount of stores double, triple, or even quadruple.

I especially love the ones who say they don't drink, and then proceed to tell us that the PLCB can get you anything you need...and you shouldn't complain, the implication (sometimes openly stated) being that if you do complain, you're an alcoholic. Or they tell us that the State Stores have the best prices in the country, or that we are safer because of the State Stores, when in fact we are barely mediocre in that respect.

Other favorites are this one woman who didn't want privatization because there wouldn't be any Mom & Pop stores so it was better to keep the PLCB...which has no Mom & Pop stores.  Kinda makes your brain hurt, don't it? One gentleman told me that Walmart will get all the licenses, all 14,000, because it is payback for supporting Republicans. (The facts are that the only free-spending "special interests" in this fight are the unions, and they just got their 'payback' from Wolf's veto. The retailers and the producers/importers are staying out of it, because they know the PLCB will retaliate if privatization doesn't pass.) Can't forget the guy who knew there are 18 states exactly like PA for alcohol sales. I don't think he gets out much. Nothing wrong with having an educated opinion, but you gotta laugh at some of these.

Of course, the real oddballs are in the legislature, but you can read about them everywhere.

Until the next time -- keep buying out of state!

The ISSU decides the PLCB isn't so bad.(for the moment)

Our friends at the ISSU (Independent State Store Union, the union of the liquor store managers) have been fairly quite about privatization, I guess it is hard to side with the PLCB when you have said:

"The PLCB/industry makes a mockery of the control system for the common good when encouraging and incentivizing people...(4/13/11)"

"No other state in the country takes a more derelict approach to alcohol policy."

“With this announcement the PLCB continues to foster a climate of increasing consumption which is incongruent with their responsibility to establish policies intended to minimize the harms of alcohol (4/28/11)"

These were pretty good too:

"And, in pursuit of their delusional effort as a wannabe “world class retailer" , they have also implemented multi-million dollar advertising campaigns for the promotion of alcohol sales" (12/9/11)

"In their lust to act as a ‘world-class retailer,’ the current management with the PLCB has denigrated all past and present employees..."(6/21/11)

"The schizophrenic model of the current PLCB Board and management is anathema to reasonable control and responsible alcohol policy."(6/21/11)

I'm sure if you said the same about your boss you might be looking for a new job.

So in only the third press release in the past few years about privatization the ISSU decided it was better to protect their jobs then to continue to tell the PLCB they are incompetent and came out with the following.  I'll inject some comments as you read it.

SOS...how appropriate.

This may be your last chance to voice your opposition to the bill to your elected officials. Call your state senator and state representative NOW and tell them to vote NO on House Bill 466!

June 29, 2015
In an attempt to provide additional revenue for the 2015-2016 budget, the Senate is poised to consider a bill that would divest the state of the current liquor store system. While it has been widely stated that the current liquor privatization plan will generate an additional $220 million for the General Fund, one aspect of the plan has not received nearly as much publicity - where the additional $220 million comes from.

The simple and honest answer is from the pockets of consumers through higher shelf prices on liquor and wine.

As Senator McIlhinney pointed out Sunday morning on the CBS 21 news show Face the State and again Sunday evening in a Senate Law and Justice Committee meeting, we cannot divest the current liquor system, maintain current revenue and generate an additional $220 million without expecting the cost of liquor and wine to increase dramatically.

So much for the promise of "better prices" under a privatized system as promised by privatization advocates over the last four years of this debate.

Like other retail items you buy, every single one in fact, the price is not the same everywhere.  Mr. Troyan somehow forgot to mention the license fees, business taxes, increased employment, increased sales and reduced border bleed due to greater convenience, the reducing of public debt and the lease of the wholesale business in his letter....I wonder why? All those revenue streams don't exist under modernization and those supporters claimed they could get an extra $185 million without those revenue streams so is $220 million that far fetched?

The PLCB operates on an effective 45.2% markup so that does leave room for profit in a private setting. Will you pay the same for a bottle of JD at a smaller local store as you would at a larger liquor store? I doubt it, but then you pay more for milk in a convenience store than a grocery store too.  Same idea here.

Since the current privatization plan being considered by the Senate will increase the number of establishments selling wine and liquor for off-premise consumption from 600 to nearly 14,000, product selection will suffer as well. Very few of those 14,000 locations will stock the number of items available at the current state stores. The number of outlets will dictate that the overwhelming majority of retailers will limit their stock to the top ten or twenty items.

So, there goes the second major promise - better selection - that privateers have used to win public approval of their privatization efforts.

If only 5% of all stores stock more than the state stores we will still be better off (5% of 14,000 is 700 and the state only has 605 stores now) You can be assured that real superstores will want your business, stores that have more items on the shelf than the entire state does now. Of course not everyplace will have that anymore than every town has a Jaguar dealer. Consumer demand will decide not a bureaucrat in Harrisburg.

That leaves "convenience" as the only remaining argument to justify the divestiture of the current liquor system. Under this plan, "convenience" translates into 14,000 locations offering only the top ten or twenty products at highly inflated prices.

Are your constituents willing to pay the cost for this so-called "convenience"?
Pennsylvania already has the cleanest and safest liquor stores that carry a greater selection at a cheaper price than nearly all other privatized states.

While I know Mr. Troyan is trying to make a point he isn't doing a very good job. Having one place to buy beer,wine and spirits is only "so called" convenience to him for some reason  How many different soft drinks are in your local store? What is a larger seller, wine or soda and which has a higher margin? Do you really think stores will only have 20 items? Just something to think about.

Since PA is the second largest purchaser of wine and spirits in the US  for retail (8th for wholesale) one would think we would have the best prices but here is Mr. Troyan admitting that some private states do better. Maybe not entire states but certainly there are stores surrounding PA that do better on a regular basis. He apparently hasn't been to a Total Wine, Joe Canal's, Moore Brothers, State Line, Binny's, BevMo or a raft of others across the country that have more selection than any 2 PA stores put together. Some are even larger than any 2 state stores put together.

Please OPPOSE HOUSE BILL 466 and efforts to privatize and divest the current state store system.
Sincerely,
Michael A. Troyan, President
Independent State Store Union

Lastly, Mr. Troyan forgot one thing.  GOVERNMENT SHOULD NOT BE IN RETAIL AND ATTEMPT TO REGULATE THEIR COMPETITION AT THE SAME TIME.

People should be able to choose what they want and not have the state choose for them. Contact your legislators and tell them to support liquor freedom.