The PLCB enters the lottery business

Well, it is getting to be that time of year when the PLCB decides what the "most fair" way is to divvy up limited bottles. Last year it was Stacy Kriedeman saying that selling the products online is the most fair method. This year we get Board Chairman Tim Holden presenting a new "most fair," saying "In order to ensure that all consumers interested in a particular high-demand product have a fair chance to purchase the product, we have developed a lottery system for our most limited products.” 

Doesn't that mean people haven't had a fair chance in the past? Maybe it just means that the contractor they hired to do this gets to be the fall guy if it tanks. and then PLCB can claim it wasn't their fault. Just like the Oracle roll out disaster; they don't have the expertise to do it in-house without screwing it up. (I wrote about what I thought the system should look like at the end of last July. They didn't take all my advice so we'll see what happens.)

But is this new most fair method...even fair at all? There are the questions of legality about selling only to a PA resident. The state already restrains trade for their own citizens -- the police-enforced monopoly prohibits us from buying booze anywhere but in Pennsylvania -- but can they restrain trade to non-Pennsylvania citizens? Does or does it not violate Federal statute and will somebody invest enough to find out?  Can they have two systems, in which they allow non-residents to buy alcohol on their website, but refuse to sell these limited items to them at the same time?  What about the military personnel who can maintain the state as their residence but obviously don't have all their bills sent here. State-sponsored discrimination of the very people who are defending the state and country? How cool is that, PLCB?

The only way you will get this set in PA
 is if you copy this picture

Then there are people who own property and pay taxes to PA but don't live here. Is this another benefit of paying your taxes to support a government agency that couldn't care less about you? (I don't want to hear that crap about no tax dollars are used to run the PLCB. As long as the taxpayers are on the hook for over $600 million in pension and medical debt, as long as we have no choice on where to buy our booze, ALL PLCB money is taxpayer money.)

So on the 13th we get to see the first shakedown of the new system, when 24 bottles of some Buffalo Trace Experimental bottles are offered in two lotteries of 12 each (25% of which — 3 bottles of each! — is reserved for a separate licensee lottery). I'm sure the demand level will be close to what the Antique Collection or Pappy frenzy is and will be a real test of their system.

Of course, don't expect to get a flight of the full set of Pappy releases, or a complete BTAC collection. That's impossible in the "most fair" world of the PLCB. 

Agency stores - How the Democrats will prove privatization doesn't work

In an August 5th interview with the Pittsburgh Tribune-Review, Democrat State Senator Jay Costa said he backed "agency shops" as a compromise to efforts by GOP legislators to privatize the State Store System. What he is really saying is, 'Let's show how these fail and keep the State Stores.' How do I know this?  Let's look at the scenario.

It's for all his friends in the rural areas.

First: The stores will only be put in underserved rural areas (you know, those 20 counties that have only one or two State Stores in hundreds of square miles), and he admits that it's to avoid cutting into PLCB profits from well-performing outlets in populous areas of the state. Nothing like a fair and level playing field for the suckers lucky entrepreneurs in those agency shops!

Second: Given the lack of enthusiasm for the "store in a store" concept (only fifteen in the whole state after 35 years!), it will probably be a standalone structure, forcing a higher cost per square foot than if integrated into an existing store. Even if not, the existing store would still legally have to provide separate entrance and register, increasing their cost. Of course, the hours won't be any better than the current State Stores either.

Third: "State Mandatory" items that all State Stores have to carry may not be the product mix these rural stores need to have, costing shelf space and sales. But Harrisburg knows best, so they're stuck.

Fourth: These stores will still have to buy from the PLCB. It isn't clear if they will get wholesale prices, which is highly unlikely (given the PLCB's jealously stingy attitude toward any private entities), or some discount from the PLCB retail price, like bars and restaurants do. If they do get a discount, you can be sure it won't be the same the State Stores get, thereby ensuring higher prices at the agency stores...exactly what the PLCB bureaucrats want to prove: private stores "cost more."

Fifth: Cost of transportation, while not stated, will certainly play a part. If you think the PLCB will provide free shipment to their new competition, you are just wrong — it ain't gonna happen.  That leaves the agency store going to a larger state store to pick up product, or all the way to one of three warehouses in the state.  (P.S. The PLCB is trying to knock that down to only two warehouses — more convenience!) In either case it is time and expense that the State Stores don't have to bear.

Sixth: While Ohio does have agency stores, that is ALL they have. There is no competing with State Stores, no limitations on being only in rural areas, and still no competition because the state sets the prices. They are a control state, just not as onerous as PA. Not a real improvement, by any stretch of the imagination.

Seventh: With a very limited number of these stores (no details on the amount, or what the criteria is for selection), there wouldn't be the incentive or need for any price competition that the free market brings. It would be the same as the beer distributor oligopoly, only with even more protections for maintaining a higher price.

So Senator Costa is selling us a bill of goods, and not an attractive one at all. What agency stores would really be about is three things.

1. Like "modernization," putting in agency stores would lead directly to a cry to 'give them a chance,' which is really about kicking the privatization can down the road, putting it off so Wendell W. Young IV doesn't have to worry about it for another five years at least.
2. Set up to fail, agency stores would be a great straw man for anti-privatization fanatics to point to and say, 'See, we gave you privately-owned stores, and what happened? The same selection (or less), higher prices, and no more convenience than the State Stores!!!" Because that's the way Costa wants it to be.
3. The PLCB no longer has unprofitable stores. Because they'd dump all the stores that aren't making a profit — due to their ballooning operating costs — on the agency stores, allowing them to decrease the number of State Stores again, keeping their bloated payrolls and administrative costs humming along in markets where selling booze is like shooting fish in a barrel. 

We urge the GOP not to bite on this. Senator Costa is actually proposing to save the State Stores — a bad idea from the 1930s — with 'agency stores,' another bad idea from the 1930s. Don't double down on stupid.

Like we keep saying: End It, Don't Mend It. There's a great solution to the problems of the State Stores: privatization. Don't let this moment go. Don't let Governor Wolf off the hook.