Interview with Adam Harris

Adam Harris

We have some news that affects how things are going to work between Pennsylvania's brewers and the government, as represented by the PLCB and the Legislature. The Brewers of Pennsylvania (BOP), the state’s official brewers guild, has hired Adam Harris, former chair of Pennsylvania’s House Liquor Control Committee, as the organization’s new Deputy Director.
The BOP said, in a release put out on February 6, “The newly created position (shades of Joe Da CEO Conti!) will further bolster the BOP’s advocacy efforts and its quest for a more fair playing field within Pennsylvania’s antiquated three-tier system (manufacturer, wholesaler, retailer). In conjunction with Dan LaBert, BOP’s Executive Director, the BOP’s Legislative Committee, and Board of Directors, Harris will assist in outreach efforts to BOP members, potential members, elected officials, and other beer-interest entities to strengthen and expand Pennsylvania’s thriving craft beer industry. According to the Brewers Association, Pennsylvania craft beer ranks second nationwide in economic impact ($5,788,000) and first in barrels of craft beer produced per year (3,724,010).” (Thank you very much, Dick Yuengling and Jim Koch!)

Harris was hired to lobby the government, although as a recently retired House member, he won't be able to directly talk to House members until December of 2019 because of lobbying restrictions. Beer is his direct focus, of course, but as the former chair of the HLCC he's pretty damned familiar with what was going on with Pennsylvania's booze law changes.

So I asked the BOP if they could set me up with Adam for an interview. I'd met him at a Commonwealth Foundation event five years or so ago, and we had quite an affable conversation.

(One note: I tried my best to keep up with the conversation as I typed, but let's just say that everything I 'quote' Adam Harris as saying is actually a paraphrasing. I've also moved pieces around to make more sense of the flow as we went back to clarify things; there was no intent to change meaning. I tried to stay as true as possible to what we both said, but if there are any problems, I invite Harris or the BOP to send me an email and I'll be happy to discuss it.)

What are your top legislative priorities to create opportunity for Pennsylvania breweries?

The issue that's most time-sensitive is the taproom tax. We pushed it back once already. That would be a killer. The brewers were told in 2015 that the taprooms would be tax-free. So they jumped in. It would be a step backwards to tax that now. The governor wants a legislative fix. Our legislative side is talking to members.

Could you explain what we're talking about in a bit more detail? And I'll note that the tax has been delayed until June 1.

In 2015, the PLCB said, look, if you have a G license, a manufacturer license, you can have a tasting room. Now, a tavern is paying the sales tax on beer, but they're paying it at the wholesale level. They pay 6% on the wholesale price of the keg when they buy it. They want the brewers to pay the 6% sales tax by the drink. That's 4-5 times as much in sales tax. We'd love to keep the tax-exempt status, but we surely don't want to be paying more. Our attorneys are talking to the Department of Revenue, and they're getting that.

How did it happen? Who made the decision, and how did the tax get put in place?

It's hard to track down where this began, or who made the policy decision. There has been no legislation. Ironically, Department of Revenue came out with a statement that the taproom sales would be tax-free, and now they are changing that to a 6% per drink tax. On a premium pint, in Philly when it's already got a per-drink tax, that's a significant increase, and it trickles down to employees: fewer pints sold, fewer people employed. If it goes ahead, brewers are going to pass the tax on directly, and itemize it on the receipt so people know why they're paying more.

As I said, I can't lobby the House members for twelve months, so I'm talking to Senators, and to brewers to make sure they understand the issue, making sure they interact with their legislators. We meet with everyone we can in the Governor's office, and Revenue, and they've been receptive to the idea. The governor's office indicated he'd like a legislative fix to take the gray area out of it.

The thing is, if we run it as a tax code bill, that usually doesn't get passed until June 30. We're hoping we can get it done earlier. If you wanted to change the tax structure, you do it in a tax code bill, but if we're not changing taxes in the budget, there may not even be a tax code bill. But we do a budget every year, and it has to balance.

Why does it seem that it's always everything that needs to get done gets jammed into the last half of June?!

(Laughs) It does appear that June's when it all takes place. It all gets done in one month, and it's a hot month.

Drinking the good stuff. 

What's the Beer Equity program?

You have the manufacturer – the brewers – and the wholesalers, who have franchise rights to the brands once they contract to sell them. Those rights, that contract, runs in perpetuity. That's a PLCB ruling, from about a decade ago. There are very few opportunities to get out of those. Usually it's a great relationship, but a few aren't, and those people literally cannot get out those relationships. They can be traded to another wholesaler, or go to court, which isn't easy. We're trying to find a better way to open these contracts. We want legislators to know this is an issue for us. The wholesalers are great for us, and get the beer out where we couldn't. But the few exceptions, that makes it harder for a brewer to think about signing that contract. It causes a great deal of stress and anxiety. 'We're making great beer, getting great reviews.' But they don't know what to do. If the contract was just ten years, and had to be renewed, that would be better.

We got the end of the case law, and the regulatory workaround that allowed grocery stores to sell beer by installing a 30-seat “cafe” and buying a tavern license. Are there numbers on how much those two measures actually benefited PA brewers: sales increases, numbers of outlets?

Let me check on that. It was a huge win, no doubt, to see them spring up all over the state, give consumers that option.

On the flipside, there are problems with the grocery store beer sales situation. Taking limited restaurant licenses to use for grocery stores makes those licenses more expensive and scarce for on-premise businesses. The system is inherently unfair to smaller grocery stores. It does little to bring beer sales to convenience stores, a major sales outlet in other states. What we clearly need in PA is a grocery store license. Why can't that happen here?

It's becoming the game only the big guys can play. The rep in Carbon County has way too many R licenses and they're worth nothing, while in Chester County, how can a young couple start a small restaurant when the license costs $500K? Any time you talk about new licenses or transferring, you get into a fight that stalls out. We talked about transitioning D licenses, but there was considerable pushback. There are some distributors who are still doing really well, if they're willing to push the envelope. The landscape has changed.

You want to do what's right for the consumer, but this is people's livelihood. That sixpack sale, for instance, is how the tavern-owner pays their mortgage. My comeback was video gaming terminals for the taverns. We'd be down a whole new rabbit hole with that.

Why is the legislature so reluctant to take substantive action on creating a more open retail situation that would directly benefit both Pennsylvania brewers and Pennsylvania consumers? This is not the first time the PLCB has taken independent and somewhat arbitrary action that effectively rewrites the Liquor Code; they made a case a 12-pack, for instance, and then the legislature did away with the limits altogether. The Board has often shown no reluctance to defy the stated desires of both the legislature and governor. Is there any interest in the legislature to limit this power?

They are a bit of their own little fiefdom.

But the only negative feedback we had from brewers on the case law changes was, 'Hey, you just gave us 12-packs, and we re-did the package lines, now a few months later you give us singles. Could you stop giving it to us piecemeal?'

It really is strange. The ultimate backstop is that anything the legislature passes and gets signed is then the law. It might seem like they [the PLCB] spring surprises, but they're open about process. I don't think they anger people enough that we'd limit what they do. [Adam interjected at this point that PLCB member Mike Newsome has gone over to the Governor's office, so it's a 2-member board right now.] We could always call over to them and get things done. It never got personal or unpleasant. [He should know, but I'll note here that at PLCB hearings I was watching it most definitely got unpleasant on occasion.]

As the former chair of the House Liquor Control Committee, can you give me some insight on why it always seems that the interests of the FOURTH tier, the actual consumers, come last in considerations of alcohol legislature?

Say we wanted to get something done for the consumer. We'd pull the committee in, and we'd want to change things, and...personal relationships with voters and businesses in legislative districts stalemate things. The consumer is finally getting a few wins, but slow and steady wins the race in Pennsylvania. We'd do a big omnibus bill, and you'd get a lot of things. Some of it you liked, some you didn't. We've gotten away from that. The consumer's more engaged. They get more and they want more. I will say that I don't think there's that many anti-alcohol advocates in the general populace or the legislature as there were even ten years ago. For some of them it's a revenue issue, but with Uber and Lyft, there's no reason anyone would have to drive drunk.

Look, we're playing catch-up for sure. Got to get our guild solidified, talking to their legislators. I grew up in small-town Pennsylvania, in Juniata County, and all we knew was Yuengling. But there's no animosity among the brewers, there's cooperation. More than I saw in the legislature.

And that's that. Thanks, Adam Harris. 

There are lies, damn lies, and...Governor Wolf

We're still seeing a lot of talk about how Governor Wolf is behind "freeing the six-pack," when honestly, all he did was send a politically opportune letter. Here's how the Governor spun "supporting" what was going to happen anyway into propaganda for the masses, taken directly from the Governor's blog: a closer look at the claims. 

I’m hearing a lot about how Pennsylvania “Freed the Six-Pack.” What does that mean?
"Last week, following Governor’s Wolf’s request, the Pennsylvania Liquor Control Board approved nine licenses allowing gas stations to sell beer. These approvals freed the six-pack for certain gas stations with appropriate accommodations that can now to sell six-packs of beer."

Reality - The Board had already approved licenses for places that also sold fuel, which is what let to the current case in front of the State Supreme Court. There was no reason to think the Board wouldn't approve other licenses that met their requirements. In fact, if they didn't, they would likely be taken to court just like when they tried to stop grocery stores from selling beer in "cafes" in 2010.

Why is this such a big deal?
"'Freeing the six-pack' will make the commonwealth more inviting for consumers and businesses by improving customer service and convenience for Pennsylvanians. Here’s what Governor Wolf has to say about it."

Reality - With the quota system in place (one R license per 3,000 people per county), those licenses had to come from somewhere. Robbing Peter to pay Paul doesn't change the total access or number of places to buy. While you may be able to buy beer at a couple of gas stations, there are fewer places to have a beer with your meal (unless you really want to have lunch at a gas station "cafe," you poor thing), and any new places that open will be more expensive.

Stop right there! There will be no wine or liquor convenience while I'm Governor!

What exactly happened at the May 25 PLCB public meeting when these licenses were approved?
"At the regularly scheduled May 25 Board meeting, nine license applications from businesses that also sell gasoline were considered, eight of which had been held at prior meetings because they did not achieve the required two votes for either approval or denial. Now that the Board is at its full complement of three members, a number of licensing applications that have been awaiting Board action for months may be considered again.
"After careful consideration of various factors – including Commonwealth Court precedent upholding the granting of liquor licenses to convenience stores and grocery stores with alcohol sales locations separate from fuel sales operations – the Board unanimously voted to approve these nine license applications."

Reality - The PLCB first decided to allow beer sales at a convenience store location that also sells fuel on July 14, 2014, This decision was upheld by the Commonwealth Court on  July 31, 2015. By that time, the PLCB had approved more licenses for grocery and convenience stores that also sold fuel on the property.
It was Board Chairman Tim Holden (appointed as chairman by Wolf) who was voting against approval of further licensees when the board was down to just two members (after Joseph E. "Skip" Brion left on Nov, 19, 2015), supposedly because he wanted to see what the State Supreme Court would do with case of the appealed Commonwealth Court decision. However, the Supreme Court didn't agree to take up the case until Feb 18, 2016. That left a three month period between Brion leaving and the Supreme Court agreeing to take up the case where Holden voted against further licenses. Think about it: the 'no' votes could not have been for the reason he stated. Since it only takes two votes by the board for approval, and he had approved other licenses previously for properties that sold fuel — what changed?
May 25th 2016 was the first time the Board had three members since November the previous year. The Governor had sent his letter to the board asking them to "free the six-pack" (which really meant just chaining it up somewhere else), and suddenly Chairman Holden decides he can't wait for the Supreme Court decision, because it may take too long!

Will there be more licenses like this approved?
"Governor Wolf has requested that the PLCB approve similar subsequent applications that otherwise meet PLCB standards. The PLCB Board members have indicated that while each license application is reviewed and evaluated on its own merits, they, too are supportive of additional consumer convenience and growing Pennsylvania commerce."

Reality - "Licenses like this" are the only licenses available; there is nothing special or different about them.  Having a gas station buy an "R" or "E" license takes that license away from a bar or restaurant. It doesn't change convenience at all since the number of locations hasn't changed, and it is questionable if it grows employment, since a restaurant usually has more employees than a gas station.

How soon can these businesses start selling beer?
"As soon as each license is administratively finished up and issued to the licensee, that business can start selling beer. This could happen in as little as a day or two following Board approval."

Reality - Or it can take months, like the seven months it took to make the decision on some of these licenses, even after all the administrative work was finished and waiting.

How do additional gas stations get approval for selling beer to go?
"A number of different PLCB license types allow for sales of beer, including restaurant, eating place and distributor licenses. Each license type has different qualifications and grants different license privileges."

Reality - Because of the current system, every license that gets approved for this use is taken out of the pool of licenses that could be available for bars, restaurants, distributors that can effect a downtown revitalization and community growth. I don't hear too much about a convenience store or gas station doing that. This makes it more expensive for small businesses to get a license and thus leads to higher prices needed to pay off the license which means higher prices for you the consumer and possibly a need to sell more alcohol to make up the increased cost. Also, there just aren't that many licenses available right now, and until there are...no more gas station beer.

Conclusion - The Governor didn't free the six-pack, as there was and is no increase in availability. He also didn't do anything to make the system better, as pointed out by Lew Bryson in his excellent piece. He did use this to deflect privatization because people do tend to think of beer, wine, and spirits together, even though that hasn't been the case in this state for over 80 years. The six-pack is not freed, it is just now allowed to be chained to a different owner, still a slave to the absurdity of the PLCB and their "interpretations" and regulations. If the Governor wanted to really free the six-pack, he would be proposing legislation and not interpretation. Do you see that happening? No, and you don't see the Legislature doing anything either.

Abolish the PLCB; rewrite the code!

BEER IN GAS STATIONS!!! No, it's not, and Wolf had nothing to do with it

Everyone's losing their minds because Pennsylvania gas stations can now sell beer, and Governor Wolf made it happen. We saw headlines like this (exclamations added..):

Pennsylvania Liquor Control Board Approves 6-Pack Sales At Gas Stations!
Pa. Liquor Control Board allows gas stations to sell 6-packs!
Gas and brews: Pennsylvania Liquor Control Board approves beer sales at gas stations!
Pennsylvania Finally Catches Up With The Rest Of America, Legalizes Selling Six-Packs Of Beer At Gas Stations!

No, no, and no. Gas stations near you probably still won't be selling beer (without jumping through ridiculous hoops first) and Governor Wolf had nothing to do with it. It's just one more chunk of pathetic bullshit from Harrisburg, designed to dazzle and placate you and keep your mind off how crappy the booze sales system in this state is. Allow me to explain.

First? This is about nine gas stations in the entire state which bought existing licenses (of various types; that's explained quite well here if you're interested) -- like the supermarkets that are "allowed" to sell beer 12 bottles at a time -- and just wanted to have those licenses approved...because, of course, the Almighty Liquor Code actually "prohibits the sale of liquid fuels or oil by licensees."

Just add beer...sorry, not allowed in Pennsylvania!

So that means that the Board is once again ignoring the law ("The board shall refuse any application for a new license, the transfer of any license to a new location or the extension of any license to cover an additional area where the sale of liquid fuels or oil is conducted"), just like it did last year when it said a 12-pack is a case. ("No distributor or importing distributor shall sell any malt or brewed beverages in quantities of less than a case or original containers containing one hundred twenty-eight ounces or more").

Now, I'm all in favor of ignoring the Almighty Liquor Code myself; I do it all the time by running to NJ for booze. But it's one thing when I do it; it's completely something else when the state regulatory agency in charge of enforcing and interpreting The Almighty Liquor Code is doing it. This kind of arbitrary decision leads to madness and badness.

What kind of badness? Realize this: every time one of these gas stations buys a license, that's a bar license (R license, "deli" license, or a straight-up D distributor license; they're buying whatever they can get their hands on) that's out of circulation for years, not being used as intended. Ordinarily, I'd say, who cares? But this is Pennsylvania, where the number of bar licenses is limited by population: 1 license per 3,000 people per county. Then realize that bar and deli licenses, unlike every other kind of license, can be bought and sold on the open market for whatever the market will bear, and you see that every gas station and supermarket that buys a license makes the price of other licenses higher. And that means fewer start-up bars, more chain restaurants, and more high-end expensive bars...and more bars that are likely to try to sell as much booze as possible to make that monthly payment on the license. Not good. I wrote about that here. What else? Well, how about...the Board can easily play favorites, because they can decide the next batch of applications don't get approved, and they don't have to give any reason, nor are they bound by precedent...because that's how the PLCB works. Every ruling stands on its own. Period.

It would be much better to have a new license for retail beer sales, without the stupid 12-pack restrictions and separate register foolishness, than to continue to do this workaround. But that would require the Legislature to do something, and that would upset the tavern owners AND the beer distributors...even more than this is.

To my pleased surprise, the decision also was not well-received by the Brewers of Pennsylvania, who responded -- correctly!-- that "To truly “free the six-pack” as Governor Wolf requested from the PLCB, then the future call to action must be to allow six-packs to be sold in many more businesses than just gas stations... To truly achieve consumer convenience as well as provide for a variety of purchasing options for consumers, the BOP highly recommends allowing six-pack sales in all channels of trade. Doing so would immediately benefit all small craft beer producers in Pennsylvania..." BOP president Bill Covaleski (of Victory Brewing) told me "the consumer is at the forefront of our thinking. We are headed in the direction of the consumer, we need them to tell us where that is." He noted that "where that is" clearly seemed to be in every grocery store and convenience store. It's refreshing to see that the brewers get what the Legislature doesn't: the consumers should be considered first, not the special interest groups.

Second? Once again, this is about nine gas stations in the entire state. It does NOT mean "gas stations can sell sixpacks." You won't be seeing beer at every Wawa anytime soon, especially not in southeast Pennsylvania, because bar licenses are really freakin' expensive here; like around $400,000 in Montgomery County. So why is everyone so excited? Because Governor Wolf made a big deal about this.

Yay me! I wroted a letter!

Third? What does Governor Wolf have to do with it? Nothing but shameless self-promotion, that's what. Wolf heard that the PLCB was about to vote on these applications, and like everyone else in Harrisburg, he knew the PLCB was likely to say yes. So he sent them a letter asking them to do that as a favor to his friends, the people of Pennsylvania, and then made a big stinking deal out of it when they approved the applications. As a friend of mine said, tomorrow Wolf will send out a press release predicting the sun's gonna rise in the east, and he'll be two for two!

Did anyone know Wolf was a big supporter of "free the six pack"? No, you didn't, because "Free the six pack" was just something Wolf hitched his wagon to the day before the PLCB was going to approve these piddling nine applications. He's an opportunistic fraud.

To recap: not much has changed; Wolf had nothing to do with it; and this is still a terrible way to change things. As I've said for years, the arbitrary nature of the PLCB and the byzantine impenetrability of the Almighty Liquor Code make for an ever-worsening situation here.

So when you don't see beer at your local gas station...remember this, will ya? And tell your legislators to Rewrite The Code, with you in mind, not the unions and the beer distributors and the tavern owners and the convenience stores and Pat Deon. It's the only way we'll ever change this.

Beer in Supermarkets: the Down Side

Giant Market plans to sell beer at their Stone Mill Plaza store in Lancaster County!

Weis Market opens beer cafe in Mechanicsburg!

Yeah, really, beer in Da Grocery Store in Da Commonwealth!!!!

Is this great? Or is it pathetic?

I asked that question seven years ago, when I first bought a beer at a Pennsylvania supermarket. It's high time that the question was asked again, because things are accelerating. We're seeing more and more big supermarkets adding "beer cafes" and selling sixpacks, and there are going to be consequences; we need to look ahead at what may happen and consider action to head it off.

It's a simple problem. It's great that Pennsylvania supermarkets have figured out a way to sell beer, a workaround that involves sacrificing part of their building to create a "cafe" where people could have a beer if they really wanted to (but mostly don't, with a few cool exceptions where the idea's been embraced) and buying a tavern license, which can be wicked expensive (check by county; hello, Chester!). But clearly the big chain supermarkets -- Giant, Wegmans, Weis, Whole Foods, Giant Eagle -- have found that the profit is worth the cost, because it seems like a month doesn't go by without another opening.

Why is that a problem? A few things. First, Pennsylvania has a "quota system" for liquor licenses: one per 3,000 people in a county. It's essentially a broken system, as it's never really kept up with population shifts, and there are a ton of "grandfathered" licenses in counties that have lost population, and there are a number of exceptions (The Almighty Liquor Code has a silly number of kinds of licenses), but essentially, there are no new tavern licenses being issued. If you want a liquor license, you have to buy one on the open market, because the Legislature foolishly made them transferable and salable. I say "foolishly" because when a liquor license -- a piece of paper issued by the State with no intrinsic value except what the State-enforced "quota system" has given it -- is sold in Chester County, for instance, for $270,000, the State gets next to nothing. Even though the full value of that license only exists because of State law. Yeah, I call that foolish.

That's a problem, because every time a supermarket simply wants to sell beer, it buys up another of these limited licenses, which then become more scarce, and therefore more expensive if you want to buy one to open an actual bar, tavern, brewpub (you need a license to sell anything other than your own beer or Pennsylvania wines at a brewpub), or restaurant. As licenses get more expensive, you get more chain restaurants and fewer independent operators opening (because they don't have the deep pockets); you get more nuisance bars (because they have to sell more booze to make their loan payment), and you get more high-end places with expensive booze (which isn't bad in and of itself, but if the ratio is unbalanced, people have fewer choices).

Another part of the problem is that it creates two tiers of grocery stores: the ones with beer and the ones without. I recognize that some grocery stores don't want to sell beer; especially in rural Pennsylvania, where there are some family-owned places that simply don't hold with alcohol at all. Fine, no reason to force stores to sell beer, but there are stores that would like to and simply can't afford the ridiculous unnecessary expense of buying a tavern license and tying up a substantial amount of retail space and equipment in a "cafe" with separate beer cashiers.

This was brought up at the McIlhinney Hearings in 2013, by a representative from Redner's Warehouse Markets, and Senator McIlhinney's response was essentially 'that's nice, but that ain't gonna happen.' Since then, there have been attempts to come up with a separate license for grocery store sales (of course, another type of license is exactly what we need!), none of which went anywhere. Given the tenacious opposition of the beer distributors to any expansion of grocery store beer sales (and the likely opposition of the already-licensed groceries), I doubt this will fly, and...

That is going to mean we'll have this half-assed workaround forever. The stores that got a liquor license won't be happy with anything that devalues that major investment, so they'll be fighting it. And Pennsylvanians are pathetically grateful for anything that even looks like buying beer in grocery stores (and having a liquor license actually puts the stores one tiny step away from selling wine, as there's already been a push to allow taverns to sell "to-go" bottles of wine), so if we think we have it, we're not going to push for it; we're just going to go to the stores that sell beer. That means that more and more supermarkets are going to go after tavern licenses, which is going to accelerate the scarcity issue (more chains and more nuisance bars!), and put even more pressure on the family-owned supermarkets to sell or close.

Well, hello, unintended consequences!

More crappy nuisance bars. Friendly neighborhood bars will sell their licenses at top dollar while they can, and the families will retire. And we get further away from a REAL solution to the problem.

This is yet another fine mess the PLCB and the Legislature have gotten us into, with the help of the MBDA and the behind-the-scenes maneuvering of Bucks County beer mogul (and SEPTA Board and Turnpike Commission member; and did you know he also owns 4% of the Sands Casino?) Pat Deon. Please note that I do NOT blame the supermarkets; they're just playing the hand that was dealt to them, and playing it well.

The only solution to Pennsylvania's alcohol beverage sales quagmire is going to be an all-alcohol solution, some grand bargain that fixes everything. More on that to come.

Why the MBDA is bad for beer and bad for citizens.

On face value, the Malt Beverage Distributors Association of PA would seem like a good thing. The organization is standard fare for a trade association in the sense that it is a group banded together to promote the business of selling beer. If you were to look at their Facebook page, you might see linked articles promoting craft beer, which makes sense, since the trend in beer sales continues to move more and more toward American craft brews.

But this particular association is perplexing, not only to the average citizen, but also to the people within the industry. The surface claim is that this association acts on behalf of those in the industry for the betterment of “strength, service and value” for consumers. This idea of strength, service and value is stated in the headline of their most recent newsletter.

In order to understand how this organization actually contradicts the idea of service and value for consumers as well as strength within their industry, we need to look at its current membership numbers and how the number of beer distributors has decreased over the years.

There are a third less beer distributors operating today than there were in 1970, even though the population has increased by a million and interest in craft beer has increased dramatically. There were about 1800 beer distributors in 1970, 1600 in 1985, 1400 in 2000 and there are approximately 1200 today. This is an average loss of over 13 distributors per year. Maybe this is why out of the 1200 in existence today, only 450 or so are actual members of MBDA, according to their web site.

What happens to those distributor licenses when the businesses close? After a specified period of time, typically five years, the license — kept in a safekeeping account by the PLCB — becomes unavailable to anyone else for purchase. In other words, it disappears. This means that Pennsylvania consumers, already strapped for alcohol retail diversity, have even fewer choices of where to shop for their beer.

This is where the conundrum begins with regard to the MBDA. The MBDA did their best to maintain the status quo in all of the liquor privatization efforts because they said it would hurt their numbers. How can the numbers dwindle more than they are already? More than 13 small beer businesses have disappeared each year during the last 44 years

P.W. Botha, the last president of apartheid-era South Africa, said, “We are moving into a changing world; we must adapt, otherwise we shall die.” The MBDA has chosen to avoid adaptation and refuse compromise over and over again when discussing change in Pennsylvania’s beer and liquor laws. They insist on package reform that would permit beer distributors to sell singles, six packs, and twelve packs, but will not agree to terms to allow other liquor licensees to sell cases. This inability for a collaborative approach to change has set the stage for the biggest threat to the beer retailing industry in Pennsylvania.

Frustrated grocery and convenience stores have figured out that they can purchase a restaurant “R” liquor license and sell beer in their stores. They have to turn themselves into pretzels trying to get around the existing restrictions in the law, adding "cafes" and separate checkout areas, but time and time again the court has upheld the validity of their approach. In 2009, the State Supreme Court did not originally find in favor of the Sheetz organization selling beer, but ultimately, with a few changes, Sheetz has been able to meet the obligations of the law and to set up beer sales in some of their locations. At the time of the finding, the court chastised the legislature for not taking action to fix the antiquated laws. Yet, in 2014 we remain chained to ancient legislation and organizations rooted in the past: the PLCB and MBDA..

In 2010, the court upheld the decision that Wegmans could sell beer in their stores with proper separation of registers and departments. The point is, consumers want to try a variety of beer and they don’t want to have to buy a case to do it. With a few tweaks, stores such as Giant, Sheetz, Wegmans, and Giant Eagle are obtaining R licenses (about 200 have done so, putting even more pressure on beer distributors).and providing consumers with what they want. Sort of.

The problem is that the R licenses are not necessarily available in the areas where these particular retailers want to purchase them, and in some counties, the value of the R license has become incredibly inflated, meaning that not only is it impossible for a grocer to buy a license, there are no new restaurants going into those communities either.

This situation is terrible for consumers and worse for beer distributors. So, getting back to the MBDA, you would think that an association wanting to create value for its members and provide service to consumers would be actively trying to make changes. Not so.

Not only are they objecting to any kind of change, they’re actively working to ensure anti-competitive and anti-environmental practices, which works against the good of the citizenry. Here are a few examples of what they tout as achievements, taken straight from their web site:

1. Defeated legislation to allow credit sales among licensees. – Credit makes for easier and smoother business. Even the PLCB uses credit although they were 16 years behind other businesses. Why wouldn’t beer distributors want to use this business tool?
2. Kept mandatory deposit bills and referendums bottled up. – Nice pun on their part but deposits reduce litter and promote recycling which it seems they don’t want to do.
3. Blocked legislation to legalize interstate sales of beer. – That's understandable. Even with government limitations on entry into the business and lower beer taxes than surrounding states, they definitely don’t want people to know it is usually less expensive to buy beer elsewhere.
4. Eliminated language from a bill to permit food stores to sell candy that contains liquor. Why? Is there any candy with beer in it? I’ve seen chocolate with a dab of liquor in it, but cough syrup and mouth wash has more alcohol and I can buy both in a grocery store.
5. Helped secure injunctive relief in federal court against mail-order beer clubs. Yep, don’t want people trying something new that they might buy a case of if they like it.
6. Supported Clean Air Act exclusion for distributors. They don’t want clean air?
7. Drafted and secured passage of the Quota Law. This one is a bit confusing, and on talking to a few beer distributors, they seemed confused too. Is the quota for distributor licenses, or for tavern licenses? We’ll have to pick this one apart in another post sometime unless some MBDA representative wants to clarify it for us.

Can you see what is missing in all of this? There is not one piece of active legislation that the MBDA has INTRODUCED to help their industry in an already transitioned market place. They seem completely uninterested in providing better price and selection for their customers. Given their stonewall opposition to any liquor privatization bill...that's not surprising at all.

Would Privatization Kill Children?

To go with last year's “Non-union employee-sold booze killed my Daddy” commercial, you may have seen the newest propaganda from the State Store clerks union about how increased availability of beer and wine will lead to the downfall of civilization as we know it. Among other lying lies from the big fat liars at the UFCW media lying office, the ad says that North Carolina put in "a similar law" and it's killing one "child" every week from underage drinking.


The idea that they can trace the death of one underage drinker (who are, BTW, usually 18 and older, hardly the toddlers pictured in the ad) per week directly to this law and ONLY this law...is ludicrous. But here are some even bigger things they don’t tell you about crazy loose boozy North Carolina vs. wonderfully 'controlled' Pennsylvania.

• North Carolina has a lower rate of high BAC fatalities than Pennsylvania 
• North Carolina has a 39% lower rate of women 18-44 who binge drink than Pennsylvania
• North Carolina has a 26% lower alcohol use rate for women 18-44 than Pennsylvania 
• North Carolina has a lower Fetal Alcohol Spectrum Disorder rate than Pennsylvania 
• North Carolina has a better rating from MADD than Pennsylvania 
• North Carolina's DUI fatality rate is the same as Pennsylvania 
• North Carolina's overall binge drinking rate is 17% lower than Pennsylvania’s 
• North Carolina is also one of the 17 alcohol control states, like Pennsylvania 
• North Carolina liquor stores are checked for underage sales. Pennsylvania's are not. 
• North Carolina allows beer and wine sales in grocery stores.  

It would be an improvement if Pennsylvania were more like North Carolina, but it will be even better if we privatized.

Sources:
http://www.cdc.gov/ncbddd/fasd/data.html
http://responsibility.org/sites/default/files/files/TCC-AIDF_2012.pdf
http://www.madd.org/drunk-driving/state-stats/
http://www.americashealthrankings.org/WI/Binge/2012

Let’s Kill Another Privatization Myth

Like the movie, some supporters of the State Store System will "say anything" to keep the PLCB jobs program and prevent the citizens from having the choice, selection, and service enjoyed in the majority of states.

The latest in their series of  "Look (at our) Interesting Example," or LIE as I like to call it, is that privatization will kill craft beer, micro-distilleries, and small wineries (you pick: one, two, or all) in Pennsylvania. 

Really? Consider:

1.       What state has the largest number of craft brewers?

2.       What state has the largest number of micro-distillers?

3.       What state has the largest number of small wineries?

4.       What do these states have in common?

Not hard to figure out that California is the answer to #3, but they also lead in #1 with 316 as of last year. Question two goes to the state best known for distilling, Kentucky, with 16 micro distillers as of 2013 and California is second with 14

Both California and Kentucky have private alcohol sales - retail and wholesale. So tell me again how privatization will kill off these businesses in PA?  I’ll wait while you make up something.
.....Right. Exactly.

My next article will prove that PA rural roads have nothing to do with DUI fatalities compared to our surrounding states. Another LIE that pops up a lot.

What we don’t have….

The latest failed tactic of those who want to keep the PLCB (largely the people who work there, and the unions they belong to) is to counter the “majority of states do it this way” argument with “but only X amount have this” – pick whatever consumer feature you want that PA doesn’t have and that they don’t want us to have.

The one I like best is “only 15 states have one stop shopping for food and alcohol.” Of course, Pennsylvania isn’t one of those states and heaven forbid we try to lead the way instead of lagging behind. Truth be told is that 39 states have one stop shopping for alcohol including six of the so-called control states. Pennsylvania is a control state, and the most onerous of them all, because while only PA and Utah control wine and spirits retail, you can still buy some beer in Utah in a grocery store (by the case, if you really want!), but you can’t do that here, except in the few stores that have gone to the trouble and expense to buy a tavern license and put in a "cafe" and even then you still can't buy a case at one time.

So in in 39 states you only have to make one trip to buy a case, a six-pack, a bottle of wine and some bourbon; in 10 states you have to make 2 trips; but only in the Commonwealth...do you have to make three trips.

Perhaps if we didn’t have to waste so much time we could write our legislators and list this idiocy as yet another of the myriad of reasons to get the PLCB out of all retail and wholesale.

Privatization – the ultimate modernization.

People want to break the law

Just as Prohibition made criminals out of ordinary people who just wanted to have a beer, a cocktail, a glass of wine, the PLCB steadily creates criminals in Pennsylvania every day. Because the State Stores suck so hard, thousands of Pennsylvanians break the law every day, crossing the borders to buy booze and bring it home. The most common question people ask Google to get to this site is some variation on Can I bring booze into PA from another state?

Why, the PLCB is so crappy that they even hurt Pennsylvania's small, privately-owned, family-owned beer distributors' business. When those ordinary citizen smugglers go out of state to buy wine and liquor at often lower prices in a congenial atmosphere of informed, friendly service and great selections, they can't help noticing the beer in those same stores, sold by the 12-pack, sixpack, single bottle, and even growlers. They buy the beer, then they often get lunch or dinner, usually buy gas (much cheaper in New Jersey, for instance), and maybe even do some tax-free shopping in Delaware while they're there.

Millions of dollars of taxes and business profits are lost to Pennsylvania every year this way. Why? Because the State Stores suck so bad they drive retail business out of the state. The Control Freaks usually respond to calls for privatization by asking if the loss of the State Stores' "profit" -- taken from us by what should be an illegal retail monopoly -- is worth any "freedom of choice" the system costs us.

Putting aside the total lack of customer service sense that question reveals about the Control Freaks, I have to ask in return: is the loss of millions of dollars in retail business to businesses that aren't benefiting at all from the PLCB's reign of monopolistic retail incompetence worth the mirage of control the State Store System claims to deliver (and doesn't)? Is it worth the jobs program that doesn't benefit anyone except the island of lucky winners (if you do nothing else today, click on that link and read that post; clear answer to those who decry the loss of jobs if the State Stores are closed) who can get those jobs (and their exceedingly well-paid union bosses), doing nothing for all the other retail workers in the state who get the wages and benefits normal for the category? Is it worth the time and money Pennsylvanians spend going out of state to circumvent the State Stores? Is it worth making criminals out of shoppers?

No. No, it isn't. Contact your legislators, especially your Senators. Tell them you don't want to see privatization slip through their hands. Tell them it's a voting issue for you. Tell them they've got one more chance in September to get this done. And then tell them that this is how you want it done, for the best results for Pennsylvanians. It's not hard. The Republicans have majorities in both houses, and the Governor. Make it happen.