Reasons why the Pennsylvania Liquor Control Board should be abolished, and The Almighty Liquor Code completely overhauled and rewritten, to reflect over 80 years of change since Repeal.
I don't do much on wine, but every once in a while the PLCB does something with wine to draw my attention. Today it was a document about their wine specialists in the stores. It started out with "Each one of our highly trained
Wine Specialists at Fine Wine & Good Spirits Premium Collection
stores can help you find what you need or suggest something..." There are 111 people listed as Retail Wine Specialists in the PLCB, along with a dozen Wine Specialty Coordinators. Up until mid-February, there was also a Specialty Wine Consultant, but the position is no longer listed; that one guy retired. I guess he took the secret knowledge with him. Most of the 111 are working as wine folks in the stores. I don't know what the 12 "Coordinators" do exactly. But I do know that not all the Retail Wine Specialists have even the most basic industry recognized certification, just the "PLCB" training, the kind that is recognized only by the PLCB.
These are real; the PLCB training is not.
At the Coordinator level, not all of them have even mid-level industry recognized certifications. Remember: these are the folks selecting wine for the entire state, Keep in mind that nobody in charge of the operation has any high-level training. Not even the lowest level of "Introductory Sommelier" at the PLCB. Of course, this matches the Board and senior executives who don't even have the lowest level of experience in the non-monopoly liquor or wine industry. That isn't to say there aren't any in the PLCB; they just aren't the ones in charge who make decisions about what the entire state is allowed to buy or drink.
You would think that as the second or third largest buyer of wine on the continent would feel the need to have a Master Sommelier on staff, but on reflection, you can understand why the PLCB doesn't. They don't have to lead in any category, only follow. They don't have to satisfy ALL consumers, just the majority. They don't have to have a business model that expands the boundaries, just one that pushes unsold wine on the populace and calls it a great idea.
Having 111 people listed as "wine specialists" sounds good, but unless you have 111 people that are actually recognized as wine specialists outside the PLCB, you're just misleading the public again. Are your specialists are as good as somebody whose livelihood depends on his knowledge and return customers? These home-grown 'specialists' are the same kind of internal self-congratulation the PLCB engages in when they "self-audit" their compliance with underage drinking laws. Hey, why not tell the IRS you're going to "self-audit" your taxes this year!
The PLCB has a lot of convincing to do. Convince us that having ten wine specialists in Philadelphia, a city of 2+ million, is better than having 50 wine shops. Convince us that having higher prices for the consumer and pitiful price breaks for resellers is good for us. Convince us that being $1.6 Billion in debt is somehow good for the state. Convince us that having people with no industry experience lead is a good way to run things. That's an uphill climb. We deserve better.
One last thing: if anyone at the PLCB believes that I'm wrong about the lack these certifications, you already have the list of names published. Just put the certifications next to the names. I won't hold my breath.
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 Bourbon...it'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..
The Legislature continues to ignore the drag the PLCB puts on the economy. Every place that has fully privatized has tripled employment in the industry. A side benefit is that a free market allows entrepreneurs to open businesses that a controlled market, by its very nature, limits. Since over a third of the PLCB is already part-time the claim of losing 5,000 "family sustaining" jobs from privatization is blatantly false.
Just one example of that limitation in jobs is craft distilleries. In 2012, the first year that limited distillery licenses were allowed — years behind other states — Pennsylvania had four. Now, four years later, the state has about 50. In contrast, Washington State — with about half the population — has 86 (as of mid-July). Since privatization of the state liquor monopoly in 2012, Washington has added 51 distilleries,added jobs, added tax base. Slow old Pennsylvania has added 50 in the same amount of time — with twice the market, and our proximity to big markets in New Jersey, New York, Ohio, and Maryland — an increase that should be well over 100, based on population ratios.
So what is holding things up? The PLCB's friends in the Legislature and the Almighty Liquor Code, of course. How many jobs, how much investment and taxes has the state lost because of the PLCB? Far more than the heavy hand has allowed in. What are we afraid of? Success? Money? Tax revenue?
While ACT 39 has added a few jobs (mostly in the PLCB hiring consultants to figure out how to implement it), there hasn't been the boon in employment full privatization would bring. No new warehouse jobs (union jobs!) that would be created by the formation of new distributors, because the state still controls wholesale. No new delivery jobs (more union jobs!) trucking wine and spirits to new stores, because there are no new stores, and besides, for the most part the PLCB doesn't deliver anyway. No new sales jobs because there still aren't any new stores. Poorer service because while private stores depend on good service for return customers, the state stores know you can't go anywhere else. Less selection because the PLCBureaucrats in Harrisburg are selecting the shelf stock for every single store for the entire state, instead of customer requests and demand, new product promotion, and American-style competition like how EVERYTHING ELSE is sold in retail.
While the PLCB is a jobs program, it isn't a jobs program that benefits the citizens overall, just the lucky winners at the State Stores and warehouses. It benefits them by denying and disrupting the normal opportunity and jobs found in free and open markets.
If the Pennsylvania State Store System were really all that good...Well, think about it.
They wouldn't be afraid of competition.
Other places would be trying to emulate our system. What a ridiculous concept!
The citizens wouldn't want change. They do.
Pricing would reflect buying power. Flexible pricing makes sure it doesn't.
Qualified people with industry experience would be making business decisions, not political hacks.
People would come into Pennsylvania to buy; instead the state has the largest alcohol sales border bleed in the country.
We aren't safer, we aren't better served, and even with McIlhinney's four-bottle folly, we aren't satisfied. The only way to really satisfy the consumer is with a free market, not a closed system.
We're told to look at the PLCB as a business, as one of the largest alcohol retailers in the world. Well, okay...then let's do that, by comparing the PLCB to one of the largest alcohol retailers in the world: Total Wine & More.
Here's how Total Wine runs their business: Hire people to run your business who already have experience with large retail operations, ideally ones who have actually run businesses larger than you currently are so they can guide you toward growth. Hire people that already fit your business model, not ones you owe a favor to or who "contributed" to your cause. Find executives with experience in the product you sell or the sales model you use. Staff the stores with people that work toward company goals. Make sure there are enough qualified people on duty to cover store hours. Finally, provide a compelling reason for people to go to your stores and not the competition's.
Here's how the PLCB does it: Fill your 'business' with political hacks who have no experience running any business even remotely close to the size of the PLCB, nor any firsthand knowledge of retail or wholesale liquor or wine. Mix with a "we don't care what you want" attitude and staff with people who are almost immune to being fired and get promoted based on time in grade, not product knowledge or performance. Stir in a large amount of "We've always done it this way," toss in a goodly amount of graft and nepotism, and you'll have something that resembles the PLCB.
Drilling down, let's look at the comparative qualifications of the PLCB board chairman and Total Wine's chairman, and see how they stack up.
PLCB Board Chairman Tim Holden
Education: BA Sociology, Bloomsburg University Work Experience:
Probation officer
Real estate Broker
State Representative
U.S. Congressman
Vice chairman House Agriculture Committee
Chairman of the committee's Subcommittee on Conservation, Credit, Energy and Research
Member Livestock, Dairy and Poultry subcommittee
Member Transportation and Infrastructure committee.
"Congressman" is a pretty impressive entry on a resume, to be sure, but...Agriculture? Poultry? Transportation? Conservation? Where's the booze, Tim? For that matter, where's the retail? He does have a nice smile, which always helps in retail.
Total Wine & More Board Chairman Adrian Bellamy
Education:
Bachelor of Commerce, University of South Africa
Master of Business Leadership, University of South Africa
Work Experience:
Chairman and CEO of Edgars Stores (clothing)
Chairman and CEO DFS Group Ltd. (leading luxury retailer)
Executive Chairman of The Body Shop International (global personal hygeine retailer)
Chairman of the Board for Williams-Sonoma Inc. (renowned houseware retailer, $4.5B revenue)
Board Member of Action (Netherlands-based value retailer)
Board Member River Island (London-based fashion retailer)
Previous Board Member
Robert Mondavi Corp (wine)
South African Breweries Ltd (beer)
Starbucks Corp. (coffee; retail)
Nice smile. This is a simply stunning business resume, based solidly in retail and consumer products; experience with the wine and beer industry. Bellamy is clearly a major player in worldwide retail.
Those are pretty close — "congressman," after all — but I have to give the edge to Mr. Bellamy. This isn't a blast against Mr. Holden in particular. He's no more qualified than any of the other PLCB board members of the past 82 years, and just happens to be in that position now as I write this. I could do the same for the other Board Member Michael Negra (who does have significant business and retail experience, if not in booze) in comparison to the rest of the Total Wine Board, but you can follow the links and see for yourself. If this really is one of the top wine and spirits sellers in the world, you would expect it to be run by top management. It simply is not.
We residents have been hearing the lip service about how the PLCB wants to run more like a business. One of the first things you do to move toward that goal is to hire people who know and understand the business you are in, something the State has consistently failed to do. Given the newest PLCB Board member to be nominated, whose qualifications appear to be that he worked for Governor Wolf, gave money to Governor Wolf's campaign, and is a personal buddy to Governor Wolf, that pattern of willful failure will likely continue.
Privatization allows entrepreneurs to use their vision, drive, and work ethic to grow their businesses. Monopoly does not. The choice is simple and has been made by everyone already. Private business is how you buy practically everything else (and it's how you buy wine and spirits as well, apparently, if you live within ten miles of the border). It works, if it didn't, we'd have state-run gas stations, grocery stores, pharmacies, and other retail.
So here's to 2016, may it bring an end to outdated policies from the 1930's. We get closer every time, and as the PLCB supporters themselves admit: we only have to win once. Because we'll never go back.
In an opinion piece in Thursday's Inquirer titled "Math supports modernization of liquor sales." , Representative Gene DiGirolamo (R-Bucks) demonstrates how much he enjoys the taste of the UFCW kool-aid, supporting his bill for "modernization" of the State Store System. He decries the "hype" surrounding his bill; there is none, but he's clearly trying to generate some. His main aim is to keep the State Stores open by any means necessary, because he's strongly anti-alcohol, and just as strongly pro-union ...and pro-union campaign support.
Gene and his bestest buddy, UFCW prez Wendell W. Young IV
Representative DiGirolamo -- Gene -- offers his piece as a discussion. "Some critics have questioned these projections, and I welcome the debate - provided it is an honest and transparent discussion that extends beyond sound bites."
Okay Gene; let's go to the math, with an appetizer of economics first. The basis of any "honest and transparent discussion" is that the PLCB is a legal monopoly -- so any sales or "profit" increases have much less to do with the service, selection, convenience, or pricing being offered thanwith the fact that the citizens can't go anywhere else legally. As prices
increase and population increases, sales will increase; that doesn't mean the monopoly is doing a good job, or satisfying the consumer.
On to the math. DiGirolamo says that
there have been great increases in LCB "profits" over the past five years, but FY 2010
itself was horrid. Operating income was down almost 32% from the year
before and was the lowest since well before 1999. In fact, looking at
operating income over the past 15 years, it declined in 8 of those 15
years (including last year) on a year to year basis and the long
term rate of growth of the past 15 years is only 3.3% annually. Since inflation over that same
15 year period was 37.5% (2.14% annual compound rate for 2000-2014) the
real dollar growth was only 1.16% annualized and that is nothing to brag about.
Getting down to the details of your "proposal", we can see that most of it is built -- appropriately enough -- on moonshine. Here's the specific proposals Gene makes, and the monies he projects that they will reap.
Allowing more LCB stores to open on Sundays (currently only 25
percent can) and expanding the hours of operation on Sundays. Projected
annual profit: $22.5 million.
To get
an additional $22.5 million in profit means gross sales have to increase - using Gene's numbers of 6.92%
profit margin - $325 million above what they currently are on Sundays, without taking sales away from any other day.
This would somehow happen even though the PLCB said they would only be looking
to open an additional 140-160 stores on Sunday, bringing the total to
still less than half of the 605 stores they have open now. And the ones that are open on Sundays now are already the busiest ones. This seems far-fetched, if not outright misrepresentation.
Allowing the LCB to locate more stores inside or next to grocery
stores, beer distributors, and other high-traffic areas. Projected
annual profit: $25 million.
The "store in a store" program has been authorized for 40 years and in place since 1981; no further authorization is needed. Less than 20 stores are taking part (fewer than were willing to take on a wine kiosk), so the odds of that somehow greatly increasing aren't good (even less for it happening quickly, since the standard lease is for 10 years). Putting stores near grocery stores should have been a no-brainer for the last 80 years, a prime example of how the PLCB has failed the consumer all this time. Gene claims this will somehow increase profit by another $25 million on top of the claims for Sunday sales. That requires another $361 million increase in sales to get there. Gene, you said you wanted to keep the State Stores to control liquor sales; looks like you want to increase them! Total sales increase needed for "modernization" to work: $691 million.
Giving the LCB more flexibility in pricing, which would allow the
agency to more quickly change prices to reflect market demand. Projected
annual profit: $75 million
Be honest: you are saying the PLCB will be able to RAISE prices on popular items. That's the only kind of "change" that's going to happen, except for the occasional token lowering. That's not really going to help stanch over $300 million in border bleed or improve the notion that the state stores are competitive. How do I know that prices will go up? If the PLCB is one of the largest purchasers of wine and spirits in the country, and are as effective negotiators as they claim to be, they should be getting the best prices on those purchases. To make any more "profit" above the 45.2% effective mark-up in place now, prices have to increase or costs have to decrease, and costs at the PLCB just don't go down. This is the keystone of Gene's "modernization" proposal; breaking the PLCB free of the regulated markup so they can raise prices. Everything else is window dressing.
Speeding up the state process for reviewing leases for the state's
Fine Wine & Good Spirits stores. This is a critical piece of the
puzzle because it will allow the agency to more quickly open new stores
in more convenient areas. Projected annual profit: $25 million.
I have to admit: I have no idea how opening new stores faster (with no mention of actually increasing the total amount of stores) will generate that much more income. If the state store isn't open in one spot, the people are forced to go to a different state store. Think of the 2 years it took in Mountaintop to open a new store. Do you suppose the population stopped drinking because the store wasn't opened? That restaurants and bars no longer ordered any product? Gene thinks that sales will increase another $361 million if they open stores faster. I have my doubts. Total sales increase needed for "modernization" to work: $1.05 billion. With a "b".
Allowing direct shipment of wine to Pennsylvania consumers while also
permitting the LCB to ship products out of state. Projected annual
profit: $25 million.
This one may actually make some money, but since no other state gets anywhere near 16% of their sales from direct shipments (another $361 million increase is needed) I'm not sure how realistic it is. Total sales increase needed for "modernization" to work: $1.37 billion.
Installing lottery ticket kiosks in the stores. Projected annual profit: $3 million.
They may make some money on this, but it's all going to be siphoned off from other businesses. If the PLCB makes some money and small businesses don't make as much...they're on their way to a new monopoly.
Allowing the LCB to join large purchasing consortiums to help lower
the purchase price of wine and spirits. Projected annual profit: $10
million.
Besides the legality of this, other control states already have contracts in place, and all other control states except Utah allow private wine sales already, so this would be spirits only. That and the fact these consortiums don't exist yet may put a damper on the idea. And will the distillers give any additional price breaks? You can't stop selling Jim Beam because they wouldn't give you an additional nickel off the wholesale price. Again, I have serious doubts about this.
So, Representative, please explain to us how sales will increase at least 62% above what they are now and how good that will be for the state. Sales in Washington - including increased border bleed - are up less than 15% and they have twice as many stores, open all day Sunday, Direct Wine Shipping by permit (the same as you propose), grocery store sales, and one stop shopping that you don't even propose: even if you double that because Washington only privatized liquor, you are nowhere near the increases you say will happen. Plus, there is no mention of cost increases for staff, admin, transportation, utilities, increased pension, medical or any other costs associated with a 62% increase in sales.
Open invite to Rep. DiGirolamo: if you respond, I'll publish it, but if you don't, I'll take that to mean you really don't want to have the debate extend beyond your own sound bites.
By all accounts, the PLCB had a good sales year. Well, hurray. It's nothing to brag about -- though they will, and have -- since they are the only game in town. The population grows (slowly, but it grows), the economy gets better, and people spend more money on booze. It isn't because the PLCB is doing a good job; it is because the citizens have no other choice.
PLCB touts "record sales": report shows net income down
That doesn't stop the PLCB from presenting their annual report as if they had something to do with the growth in sales. Here are some things they crow about in the report:
1. License fees returned to local municipalities $ 4,521,545 -- If the PLCB didn't get in the middle, local communities would get this revenue as a regular stream when businesses paid for their licenses TO THE LOCAL COMMUNITIES.
2. Philadelphia and Allegheny counties received $8,269,803 in returned local sales taxes. -- Again, if the PLCB wasn't in the middle, the taxes would be collected and distributed anyway. It must be nice to crow about following the law...except, of course, when it comes to trips and gifts for senior level PLCB employees.
3. Paid Total Annual Rent of $42,034,434 for 606 stores. -- This begs the question of how much rent would be paid if there were 2400 or so private stores? 2400 stores is about what the national average is for a population of almost 13 million.
4. Tweets sent: 723. -- Now this is pretty funny. A $2 billion enterprise managed to send out fewer tweets than my 16 year old niece does in a month. And then they go on to say that the PLCB was mentioned 2,516 times. This post counts as one of those mentions, just as an example, and so does this: "Hey @WolfForPA, can you do something about the PA Liquor Control Board, like get rid of it? #priorities#wine#freedom" (tweeted by @mainlinehousewife on Nov. 4)
5. Updated the Fine Wine and Good Spirits eCommerce site with 'complete and accurate product names,' product descriptions and standardized acronyms. -- Really? From the people who completely cocked up the beer registration list just a few years ago? Let's look at just a couple easily-found examples.
George Dickel Tennessee Whiskey. The No. 8 brand is listed in the bourbon section and the No. 12 brand is listed in the Whiskey section
Jack Daniel's Tennessee Whiskey has one listed in the bourbon section "Jack Daniel's 1St Edition Straight Bourbon Master Distiller Collection" Which only exists in the mind of some PLCB employee since Jack Daniel doesn't label ANY of its whiskeys as "bourbon." Not one. All the others are listed in the Whiskey section as they should be, except for one that is in the Blended Whiskey section; but Jack doesn't do blended whiskey either. I will give them credit though: it only took them 80 years to finally learn how to spell "Jack Daniel's" correctly. I pointed out mistakes on that as recently as this past spring.
6. Also restructured the website search engine to allow searches using misspelled words, abbreviations, and synonyms producing much improved search results for customers. -- Let's see how that works. Sticking with Jack Daniel's type in Jack Danial's into the search box. You only misspelled it by one letter putting an "a" instead of an "e" in Danial's. The result.....a page and a half of Calico Jack rum first, but JD does show up on page 2.
How about we just forget the "'s" and put in Jack Daniel into the search box. Again a page and a half of Calico Jack rum and then the JD on page 2. An improvement! ...until you realize that if you spell Jack Daniel's correctly and search for it, you still get a page and a half of Calico Jack rum first! The trick, apparently, is to just put in Daniel's, and you'll get all the JD listings. Just don't misspell it or forget the "s" or the apostrophe, because then you get nothing contrary to what the PLCB says. Not quite ready for prime time and certainly not a product a $2 billion company should be proud of.
I can find a lot more but let's look at some money.
Sales on the captive Pennsylvania population did go up 3.2%, which is to be expected, given that the state has a monopoly and overall spirits and wine sales were up nationally. But Gross Profit only went up 3%...and Net Income(which in a 'real' business would be called 'Profit') went down by 3.6%!Wondering why?Here's a clue: operating expenses went up 5.2% (which is a lot, considering what it bought them, as we'll see in a bit). Operating income went down, even though the much-ballyhooed 'bailment' is in effect (where the PLCB doesn't pay for a product until it leaves the warehouse). Contributions to the BLCE went up 4.1 %, but BLCE enforcement of border bleed is at the lowest it has ever been. Oddly, during this record alcohol sales year, the amount that went to Drug and Alcohol programs went down 3.6%, which seems a little contradictory, given the 'control' mission of the PLCB.
Don't overlook another big one: Return on Assets (usually called Return on Investment) went down 14.8%!ROA gives an idea as to how efficient management is at using its assets to generate earnings. Also, even though there was only 1 more store than last year, wages as a percent of sales increased an astounding 18.3%, which is not a good indicator of efficiency either.
Of course, a real business has to list all their debts on their reports to shareholders...and I don't see the over $600 million that is the PLCB share of the pension debt listed anywhere. Maybe it doesn't count since the taxpayers and not the PLCB have to cover it.
Like any business with a PR department, the PLCB tries to put on its happy face when reporting on what a super duper job they are doing, but the end result is still less selection, less convenience, higher prices, no real increase in safety, and certainly more aggravation for the consumer than in states with a privately-run liquor retail and wholesale industry. One only has to travel to see that for yourself.
Back in 2009, we heard rumors that the PLCB was considering changing the name on the State Store System. They were spending a lot of money on it, too: $3.7 million, which may seem a bit exorbitant, considering you're talking about changing the name on a Police-Enforced Monopoly retail system. I mean, what were we going to do...buy our booze at the State Store 10 miles away instead? (Or, if you live in, say, Potter County, at the State Store 110 miles away?) What a waste: why does the State Store even bother? We are forbidden by law to buy booze anywhere else. What the hell do they care?
After spending the money (with a California-based firm, thanks so much, because Pennsylvania firms are all staffed by dopes, apparently), the best they could come up with was "Table Leaf." Which means...what, exactly? Anything to do with the best-selling vodka (Jacquin's Royale, very high-end), or the best-selling wine (Sutter Home White Zin, the plonker's choice)? No, not much to do with anything, and I was waiting to crucify them when they plastered that on the front.
Well, unfortunately, they came to their senses, and just call the State Stores "Fine Wine and Good Spirits." Dopey, right? Still, they'd spent all that money coming up with "Table Leaf," so they stuck it to another brilliant program: a house brand wine. They've recently rolled out TableLeaf Merlot, Cabernet Sauvignon, and Chardonnay. (Note that there seems to be some disagreement on whether it's "TableLeaf" or "Table Leaf." Typical.)
So...the PLCB loves its suppliers so much that they've decided to go into competition against them! They're not satisfied with swinging their ponderous regulatory and monopoly weight against beer retailers;* they're going to use it against winemakers too!
Think about it, say you're Cycles Gladiator Cabernet Sauvignon, a nice wine we've bought for BYO dinners. You're on the shelf at the State Store System for $9.99, a good price. So now, your retailer, wholesaler, and regulator suddenly throws in their own brand, in direct competition, at $8.99...oh, and by the way, it shows up as an alternative selection every time you look at a cabernet sauvignon on the PLCB website, and you know damned well every clerk knows about it when people ask for a cab. I'd feel hard done by, but what are you going to say? You going to complain to your regulator? Not likely.
Kinda good to see the PLCB acting like the dominating, monopolistic SOBs they actually are, you know? This is government directly undercutting private business by manipulating their law-granted, police-enforced monopoly status. Is this fair? Privatize!
*Remember Dominic Origlio's line from the beer registration fiasco hearings? "I would be remiss without mentioning what I believe is the underlying cause of these regulatory and enforcement problems. Pennsylvania's beer industry is regulated by its competitor -- the Liquor Control Board, a state run corporation which sells wine and liquor."
I break the law on occasion. I like Pikesville Rye whiskey, and in the summer, I drink it with lots of ice, ginger ale, and a big squeeze of lemon. It's refreshing and tasty. But...Pennsylvania doesn't sell it, doesn't even offer it on special order. So I hang my head, and duck across the border to Maryland and head into almost any liquor store and pick some up. It's common. I've bought it in drug stores (oh, God, the freedom...). And you know, look: if PA wants the tax, give me a way to pay it, and I will. The stuff is so darned cheap, I wouldn't mind, not really.
So I was pretty psyched when I was in Philly last week and saw Pikesville on the backbar of two bars within a block of each other! Cool, it's finally been 'listed' and I can get some legally. Only...when I got back home and checked their product search page...I still can't. Apparently Pikesville -- cheap, common as dirt Pikesville Rye -- is only available to licensees. You and me? We can't even order it. Because someone in Harrisburg apparently decided that we just didn't need to buy that whiskey. (Okay, maybe not -- see the comments -- but the effect is apparently the same.)
I know this is a little thing, but it's so indicative of one of the major problems with the whole system: a complete lack of options. I'd love to go down the road and try another store, but that's either pointless, or if 'down the road' is across the state line, it's illegal.
That's right, Pennsylvanians: not only do you have to buy your booze here in Pennsylvania at the State Store System (under penalty of law), you're now going to have to pay more for it, across the board. As of January 4, every bottle -- wine, liquor, liqueur, wine cooler, and whatever Rock & Rye is -- will be going up in price by 50¢ to $2 (depending on size). What's the reason? Is it a new database for beer registration? More courtesy training? RFID tags so they can track down and kill underage drinkers? (Just kidding; they wouldn't really kill them.)
It's not a tax. (Really, Chairman PJ Stapleton said so, so, well, there you are.) No...it's handling fees. The PLCB tells us that this is the first time in 17 years they've raised the price because of this. My response: how would we know? How would we know? The PLCB takes all its costs out of the price of booze (and licensing and fines and so on), but although the annual report says how much gets spent, it doesn't really give details. So how do we know whether they've added in these costs before or not?
And honestly, why the hell wouldn't they? Joe "CEO" Conti keeps saying they're running it like a business; what business doesn't adjust prices for costs? And now he's saying they're going to adjust for costs every year, "We're going to look at these every July and hopefully though it will be a penny or two next July instead of the increase that we had to do this year to make up for 17 years,"he said to KDKA reporter Marty Griffin. And what business ups their prices by a penny a year? Come on, "CEO" Joe!
It's not just you that's going to pay, either: restaurants and bars will pay more too, and by the time it gets through to you, you're looking at $3-5 more for a bottle of wine, right? For handling. Am I alone in thinking that this would be a good time to tell them to get their damned hands off the booze?
Sure, private liquor stores raise their prices. But you know...when they do, you have a choice. You can shop around. You aren't required to shop in one store by law, and if you don't shop there, the cops will take away your booze and fine you. Unless you live in Pennsylvania.
Had enough yet? And if you haven't...why the hell not?
Brownstoner, the Philly real estate blog, is reporting that the Washington Square West Civic Association, State Rep. Babette Josephs are joining with about a dozen Philly restaurants -- Le Bec Fin, Tria, Lolita, Fergie's, and Caribou Cafe among them -- in filing suit against the PLCB over the "wine boutique" they've placed in Garces Trading Company. It's not fair to work with one restaurant owner, they say.
The following quote pretty much summed it up for me, especially the first sentence:
"I have nothing but admiration for Jose Garces—this issue is not about him," Jon Myerow, the owner of Tria, said in a statement. "The issue is that of all restaurants being able to compete on a level playing field. In no other state has the alcohol governing body entered the restaurant industry to compete against the very businesses it regulates, all while partnering with hand-selected competitors. The incredible amount of choice we enjoy when dining out shows the free market at its best. If restaurants are forced to compete against the state, eventually there will be fewer restaurants."
Right. Remember Dominic Origlio's line from the PLCB hearings? "I would be remiss without mentioning what I believe is the underlying cause of these regulatory and enforcement problems. Pennsylvania's beer industry is regulated by its competitor -- the Liquor Control Board, a state run corporation which sells wine and liquor."
Inherently unfair; now expressly unfair. Get Pennsylvania out of the retail booze business. Today.
With the opening of the first State Store grocery just around the corner on Tuesday, here's something to make you think about just how unfair that is. Read about why it just doesn't make sense to serve wine in Pennsylvania. Then think about why some of you don't understand why it would make sense to get rid of the State Store System monopoly. And come to your senses, will you?
I swear, I'm going to stop buying anything at the State Stores, law be damned. The more I think about it, the more I like the idea of a mass protest that someone thought up: a thousand wine lovers go to NJ, and walk back across the Ben Franklin Bridge with a bottle of New Jersey-bought wine. Are they going to arrest us? This is more than ridiculous: it's insulting.
The issue of Philadelphia Weekly that came out yesterday features a lengthy anti-PLCB screed by Tom Cowell; nice work. (There was a good editorial on the wine kiosks the day before in the Lebanon Daily News, too.) The blog got some mention (bottom of page 2), but much much more importantly, Cowell had clearly been reading it and getting ideas: the number of stores compared to Chicago, how relatively little money we actually get from a complete monopoly on booze sales, the stupidity of the rebranding scheme, the way the PLCB is really just the tool of the legislature.
Which is exactly why this blog is here, to inspire thought and action. Cowell took it and ran with it, talked to union head Wendell Young, found some more issues (the patronage inherent in the State Store System, for example), and got a new crowd of folks stirred up. I'm very happy to see it happen.
Keep spreading the word. PRIVATIZE IT NOW!
(And if you feel like supporting me in the comments to this piece...feel free, but remember to keep it on track: it's all about abolishing the PLCB and rewriting The Almighty Liquor Code!)
Holy crap! Can you believe it? Just saw this today, and my head exploded.
Lawmakers are introducing a new measure aimed at getting the state out of the booze business.
Senate Democrat Tim Sheldon is proposing the state privatize liquor sales. "Immediately, you would save the $53 million or so that it costs to operate state run liquor stores with state employees. This is a luxury that we can't afford in our state."
Sheldon said the system can be set up just like in other states that allow liquor sales in grocery and convenience stores.
The liquor control board would continue its enforcement efforts. "It could be done in a very safe, controlled way using the private sector outlets. The taxation would still be collected by the state, the regulation would be made by the state," said Sheldon.
The proposal will get its first vetting when lawmakers return to Olympia in January.
Wait, what? Olympia? Oh, bummer. This is about privatizing the state liquor stores in Washington. Damn.
Doesn't Pennsylvania have one legislator like Tim Sheldon? No, instead, what we get are guys like Representative Neal Goodman (D-123, Schuylkill County, pictured to the left), who recently said in the Pottsville Republican-Herald when asked about the prospect for beer sales in grocery/convenience stores and gas stations: "This is something the LCB (Liquor Control Board) would have to drive. I don't think this would be something legislatively-driven. This is a debate I'm willing to have ... but it really needs to be thought out thoroughly."
See...no. That's why I really worry about the caliber of legislator in this state. This is not something the LCB "would have to drive." The PLCB has already done a lot towards allowing this kind of thing; they've granted licenses in a surprisingly liberal manner to Wegmans, Giant Eagle, Sheetz, and others. This is one area where I've got nothing but praise for the PLCB. They've been ready for years, and they're pretty clear about it:
The Pennsylvania Liquor Control Board said groceries and convenience stores could have offered beer decades ago.
"The market changed. The law has not," said Nick Hays, a spokesman for the PLCB."The Pennsylvania liquor code does not address whether supermarkets may or may not sell alcohol. It doesn't permit them; it doesn't not permit them."
Hays is right: it's the code. Which, Representative Goodman's limited knowledge -- or deliberate obfuscation -- to the contrary, is something that has to be changed by the Legislature.
There's no need to bury it in a committee for thinking it out thoroughly, either (like they did with that "sixpack law" we were supposed to get two years ago). We've thought it out thoroughly, time and time again, and then nothing gets done. Which has nothing to do with the "thought out thoroughly" part, except the bits that deal with the political calculus. Your legislators want to please you, but mostly they don't want to piss off industry groups like the tavern owners or the beer wholesalers. The whole purpose of this blog is to change that equation.
Readers...if you're an interested citizen, write your legislator. It's easy, go do it (type your ZIP code in the box, and you'll get e-mail contact to Da Gov and your state legislators). If you're a reporter, please, please, please, take my ideas, take my passion, steal it with no attribution, but use it. Hammer at this ridiculous system, at the convoluted crap of The Almighty Liquor Code, at the entrenched stalinist edifice of the State Store System, at the arrogant monopolist attitude of Joe "CEO" Conti, at the wasteful and questionable spending on the Courtesy Contract and the Great Table Leaf Re-Branding.
Because the time is as ripe as it has ever been. Yuengling COO Dave Casinelli nailed it recently: "Ultimately, the consumers will speak," he said. "There's a groundswell out there. Both sides are kind of a stand-off right now." Damn straight. Why should Washington have all the fun?
Well, I got my response. I recently wrote to the PLCB to ask them how a private citizen, who happened to be in another state and saw a nice bottle of wine for sale, and wanted to bring that bottle home to Pennsylvania, could do their duty to the Commonwealth, fill out a form, pay the taxes, or so on. How could we do the right thing in order to bring this into the State and be square, in other words?
After two weeks -- a relatively short time, considering it came from the PLCB's chief legal counsel -- I got my response this morning. I'd publish it here, only it came by e-mail in the form of a PDF image, which has so far resisted four different attempts to convert it to text. No problem; I've successfully uploaded it to Scribd, and you can see it below.
Please note, before we go any further, that they took pains to note that the State Police Bureau of Liquor Control Enforcement enforces the liquor laws, and the PLCB issues legal opinions that are binding on licensees only. "Since you are not a Board licensee, the following is offered for your guidance and information only." Ah. Kinda like the fine print on the video poker machines that Pennsylvania seems completely unable to stamp out. Okay. With that said, let's see what their opinion is.
The third paragraph puts it pretty damned simply: "The general rule is that bringing any alcoholic beverage into Pennsylvania is illegal, with limited exceptions." You have to be "the Board, a manufacturer, or the holder of a sacramental wine license or of an importer license" to transport or possess any liquor or wine within the Commonwealth that has not been purchased from the State Store System or a state winery. "Accordingly, you cannot simply cross the border into a neighboring state, purchase a bottle of wine and return to Pennsylvania, as both the importation and possession of such wine would be illegal."
However...turns out that you can bring in up to one gallon free of tax and mark-up...from outside the United States. So, New Zealand is okay; New Jersey, no way. And if the Board requests it, you have to produce evidence of such travel, the receipt proving you actually bought the stuff there (and not, for example, in New Jersey), and "an affidavit indicating that the purchaser was allowed to bring the liquor in duty-free" (no instructions on who would issue such an affadavit...). And before you think this completely painless, "The Board assesses a service charge for this importation." Of course they do.
You can receive wine and liquor from outside the Commonwealth as a gift, "so long as the proper paperwork is submitted to and cleared by the Board." And you pay the service charges and mark-up, and by the way, you have to pay the taxes to the Department of Revenue, so you have to talk to them, too.
Feeling like Kafka yet? Remember that you do have the ability to purchase wine from outside the Commonwealth! You may purchase it online! And then have it shipped to one of the State Store System's stores (of your choosing!). There are a few conditions, of course: the wine cannot be one listed on the Board's Internet catalog; you'll have to sign an affidavit that you are 21 and purchasing the wine for your own "use;" and you can't get more than 9 liters in a month. Oh, and there's a shipping charge, a handling charge, the 18% Johnstown Flood Emergency Tax, and 6% sales tax (plus an additional 1% in Philadelphia or 2% in Allegheny County). Bet they get a lot of traffic on that one.
In short, they conclude, "...there is no proper protocol for crossing the border to purchase wine in another state and then bring it back to Pennsylvania." And that's pretty much it.
(The letter was copied to the Bureau of Liquor Control Enforcement, to the Senior Director of the Office of Regulatory Affairs, the Director and Assistant Director of the Bureau of Licensing, and the Press Secretary. I'm not intimidated, I refuse to be.)
The beautiful thing is, they don't have to provide a proper protocol, or the reasoning for why that is not allowed. That's the responsibility of the Legislature, by way of The Almighty Liquor Code. Why is it that way? Because the State Store System and the PLCB were set up to be a total monopoly -- it's the Pennsylvania Liquore CONTROL Board, after all -- and you can't have a monopoly that leaks around the edges.
Oh, it does, of course; people bring booze into the State every day. You know it, I know it, the Bureau of Liquor Control Enforcement, everyone knows it -- except the PLCB, apparently, as Joe "CEO" Conti continues to hold that this is a very minor problem. Sure it is. Which is why there are all those big liquor stores so close to the border in Delaware and Maryland, and why the out-of-state liquor stores run full-page ads in the Inquirer.
I am deeply offended by the very idea of this monopoly. I drive to visit my in-laws in New York and Virginia several times a year. I'm an American. What right does the State of Pennsylvania have to tell me where I can or cannot buy a bottle of liquor? If it's all about the taxes, why not make it easy for me to pay the damned things? No, instead, we're told that "bringing any alcoholic beverage into Pennsylvania is illegal." That's asinine!
Let me make this perfectly clear. I deeply appreciate the time that the lawyers at the PLCB took to write this response. I do; I have no doubt they know who I am and why I wanted to know, this site gets hits from the PLCB multiple times a week, but they responded, and they didn't mince words. I don't hold the PLCB or the BLCE responsible for this ridiculous situation.
I blame The Almighty Liquor Codeand the Pennsylvania Legislature. For 75 years we have been under the patronizing thumb of this monopoly. We have no choice except theirs, we have no options but theirs, we have no way to change it or make it better. This is not the fault of the PLCB. Rather, the PLCB and all it stands for -- monopoly, conflict of interest, political patronage, lack of choice, lack of response -- is the fault of the continuing refusal of the Pennsylvania Legislature to lift this Stalinist, paternalistic, antiquated system from our shoulders. It's 2009: could we be allowed to buy a bottle of wine wherever we want? Is that so much to ask? Or do you vant to see our papers?
The PLCB sent out a press release yesterday, heralding the "Biggest Chairman's Selection(TM) Sale of 2009"! In case you don't know by now, the idea of the "Chairman's Selection" originated back when Jonathan Newman was the PLCB Chairman. He came up with the amazingly original idea of using the state monopoly's enormous buying power to secure large lots of great wines at a discounted price, passing the savings on to customers. The program was a big success, as it delivered wine value to Pennsylvanians for the first time since Repeal. Since Newman left, the program has been criticized for losing its way, selling wines of questionable quality at suspicious discounts.
Well, fear not: the PLCB has come clean! Here's what they say about this new sale:
Incredible Savings at Pa Wine & Spirits Stores Clearance will make room for new wine selections The biggest Chairman's Selection(TM) sale of the year begins at Pennsylvania Wine & Spirits Stores on Wednesday, July 1, to make room for new Chairman's Selections(TM) wines arriving this summer. Because this is an inventory-reduction sale, not every reduced-price selection will be available in every store. "The inventory of sale wines will vary greatly by store, and they'll only be available while current supplies last," Short said. "Once these are gone, we are rolling out exciting new Chairman's Selections(TM) for summer and fall." Specific sale wines can be transferred upon request from one store to another, but a shipping fee will be charged for this service.
Yup. The Chairman's Selection has been reduced to a fire sale. Slash the prices, call 'em "special values," and get 'em off the floor, because you need room for new stuff. The curtain has been ripped aside, and the PLCB revealed for what it is: a government monopoly that doesn't know or give a damn about the products it sells -- or the profits -- just about how to move product and keep the cashflow turning.
Jonathan Newman would be appalled, only he's got a private wine business now...and you can't get his wines in PA. Anyone surprised by that? I mean, what could they call them? The Ex-Chairman's Selection?
The PLCB recently held a 'wine festival' in Pittsburgh (and Hershey and Philly). Blog reader David Mahler had this to say about it, a little rant he sent along (thanks, David!):
Pennsylvanians attending a wine festival are like prison inmates going to a fashion show. The prisoners can hoot and holler all they want as the spring collection parades down the runway, but stripes are stripes, and when the lights go out a prisoner, whether of criminal type or the Pennsylvania wine consumer type, knows there is only one authority.
Pittsburgh Wine Festival participants sniffed, sipped, and spit or swilled the objects of their desire April 30th at Heinz Field. Reportedly, nearly 3,000 festival attendees confronted wines from over one hundred and fifty wineries in a curious show of interest, considering that the Pennsylvania Liquor Control Board was, along with Comcast, a “presenter” of the brief annual event.
$125 would have bought you two hours of “Grand Tasting” sampling time (twice that money designated you a VIP and gave you four hours), and whatever pleased your palate was yours for purchasing at the PLCB's onsite store.
Two hours? What can you expect to discover in two hours? I call this a slurp to judgement: make a quick decision (the clock is ticking) and fork over your money.
Among other facets of the festival, the rubes-will-fall-for-this-one Chairman’s Selection wines normally featured in State Stores were marked down 10% from their usual prices. Prison analogy continued: “The suggested sentence for your crime is ten years. But we’re only gonna keep you here for eight!” Where does the Chairman come up with his “Quoted at” price? More importantly, is a bargain really a bargain when there is nothing to compare it to?
That's the last prison lingo of this writing: pardon me. I easily digress when working into a lather caused by the State store system. Back to the festival.
Whoops. Can’t go back to the festival, since I didn’t attend.
Was I turned off by the official press release that said “Rare cult wines will also be available for purchase?” Faddish devotion to hard to find wines? Not for me, though I admit I am committed to buying a decent bottle of table wine, imported by a savvy wine importer, and sold by a knowledgeable retailer who believes in return customers who are motivated by quality, value, and service, and not simply because there is no other choice.
We’re a sheltered bunch, we Pennsylvania wine-drinking residents who are forced to buy through the monopoly that is the PLCB. At least the PLCB hopes we are sheltered. If we’re not, then we’re apt to know that in states other than Pennsylvania, Utah, and Wyoming, one need not put up with pretense at a festival to enjoy a world’s worth of wine options.
It's sad that the only media outlet that pointed out the real problem with the "ethics" of the recently-awarded PLCB 'courtesy contract' was the Beaver County Times. Take a look: they nailed it. In a nutshell? The Auditor General had no choice but to say that the contract was "legal." And there's no doubt that the contract presented -- at least -- the appearance of a conflict of interest; it was awarded to a company run by the husband of one of three PLCB Regional Directors. As the editorialist says, "While legal, the contract speaks volumes about a political environment that parses what’s legal and what’s right with great care."
What's really sad is, given how obviously wrong it was, how arrogantly the PLCB strutted their innocence after the Auditor General's reluctant statement of legality. Chairman PJ Stapleton had this to say in a letter to Wagner (that he also released to the press, he was so damned proud of it): "We are gratified by your conclusion that we affirmatively and properly dealt with potential conflicts of interest when they arose. "
I don't really remember Wagner saying that. And the only way the PLCB "dealt" with the potential conflicts of interest was by requesting an audit -- which they knew would pass on legality, clearly the only thing they cared about -- after there was a hue and cry about that potential conflict of interest in the press and the governor questioned the contract. That's "affirmative and proper"...in Pennsylvania.
He goes on about how smart they were to award the contract even after realizing there was a potential conflict of interest:
"The rejection of such a qualified proposal for a service deemed to be necessary and without substantial legal justification would expose the PLCB to litigation. Further, when a properly conducted RFP process produces a qualified bidder at substantially lower cost to the Commonwealth (and I'd still like to know more about why the winning bid was so much lower than the other bids), we are duty bound to regard that as a positive development to be availed, rather than cause for scrapping the process and starting over... Thus, while our two agencies agree as to the goal sought, it appears we have differing perspectives on this particular matter, differences we feel obliged to respectfully note."
Yeah, they have "differing perspectives," all right. The Auditor General clearly said that while what the PLCB did stayed within the letter of the law, it presented grave problems of potential conflict of interest. The PLCB clearly said...they didn't give a damn, it was all about the money.
I just wish that the PLCB would act this arrogant and "I'm a monopoly, I'll do what I want to" when it comes to doing a bunch of pointless "make nice" stuff like changing the names of the stores and "creating a brand." That would save us some serious coin. And I'm sure it would be "legal."
But then, it appears we have differing perspectives on this particular matter.
The latest bone-headed idea from the PLCB? Change the name of the State Stores. Steve Twedt, at the Pittsburgh Post-Gazette, reported on this over the weekend. This is part of the $3.7 million "rebranding" boondoggle the PLCB has engaged in, for truly questionable reasons.
Happily, there is at least one person in Harrisburg who sees this for the worthless idea it is: Governor Ed Rendell. According the ever-spinning Chuck Ardo,
"The governor expressed his opinion that the PLCB stores as currently named were recognizable and had a brand value of their own and he strongly discouraged PLCB from attempting to change the names of the stores... The governor was vocal in making his opinion known."
However, as we're frequently reminded, the PLCB is an independent agency. Accordingly, Joe "CEO" Conti was not concerned about the governor's opinion. Indeed, it sounds like they may not have been at the same meeting:
[Conti] described the meeting with Mr. Rendell as "more a directional discussion" covering a wide range of topics. "The governor was delighted with everything he saw," said Mr. Conti.
Pardon my French, but one of these two guys is clearly full of crap. If you know Governor Rendell, you know what "strongly discouraged" and "vocal in making his opinion known" means. I'm pretty sure I know what "delighted with everything" means. I'm guessing the Governor is looking at Conti and feeling a bit like Victor Frankenstein.
But that's all silliness and name-calling. What this is really about is wasting your money. When this contract comes up, when the courtesy contract comes up, whenever the PLCB spends on consultants or signage or harassment of former Board members, the stock answer is always that it's not the taxpayer's money, they're a self-supporting agency and that their 'expenses' come out of the money they 'make' selling booze.
Could we cut the bull? The PLCB's real main argument for existence, the only reason they still have the monopoly on liquor and wine sales in Pennsylvania, is because of the money they funnel into the state's coffers. Three-quarters of that money is taxes, and we'll close our eyes and pretend that's a straight push-through. But a quarter of it is 'profits,' going into the general fund to be spent on programs to benefit the citizens of the Commonwealth. If this 'independent agency' is spending some of its gross on questionable stuff like changing the name of their monopoly stores, it is the taxpayer's money that is not going into the general fund.
Just how independent is the PLCB? Who exercises oversight on this agency? It's not the governor, clearly, as his "opinion" doesn't count for spit. Is it the Legislature? Don't know, although Conti and Stapleton were quick to dump most of the criticism of the PLCB's practices in their laps, as being responsible for The Almighty Liquor Code.
At least the PLCB is acting like a proper monopoly: high-handed, unaccountable, and arrogant.
"It is rather for us to be here dedicated to the great task remaining before us--that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion--that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth."
I apologize for dragging Lincoln into this -- he's been dragged into everything lately -- but the parallels between that famous last line of the Gettysburg Address and the last lines of yesterday's editorial in the Pittsburgh Post-Gazette were too good to pass up. Here's what they said about the continuing controversy over the PLCB's "charm school" contract:
Pennsylvania can run all the employee training sessions it likes, add Sunday hours to some stores and put a few outlets in supermarkets (separate cash registers, of course). But, in the end, it will still be a government system, run by government people, in a way that serves the government.
See what I mean? They nailed it. No matter how the PLCB dresses things up -- tux, tails, dancing with Gene Wilder -- booze retail run by the State is a monstrosity.
Philadelphia Magazine has a "Web Original Article" up about a simply amazing new PLCB initiative -- that's right, another one -- that has jaws dropping all over Philly. Restaurateurs' jaws, that is, at the stunning favoritism and clueless unfairness it demonstrates. Check this:
Let's leave aside the easy joke -- that the "highly trained staff" must be the ones who already know how to say "Hello!" and "Thank you!" -- and take a look at this. Suppose you're a Center City restaurant owner, a similar cafe-type joint known for their wine selection: Tria, for instance, since that's the only wine bar kind of place I've ever been to in Philly (disclosure: I have taught three classes at Tria's Fermentation School). How do you feel about the PLCB opening a take-out store inside a competitor's restaurant -- bad enough already, when wine take-out is illegal for you -- that sells wines "not available in traditional Wine & Spirits stores," and the PLCB staff is going to hold tasting events for those take-out wines right there in that other restaurant? I'd feel pretty damned hard done by.
This is a government agency. If Pennsylvania was not a control state, and it was a private business doing this -- Moore Brothers, for instance, and wouldn't it be a happy freakin' day if the PLCB were to go away and Moore Brothers could come to Center City? (disclosure: I have done no business whatsoever with Moore Brothers, they don't know me from Adam) -- hey, no problem! Actually, given the arcane and pointless circumlocutions of liquor law across the country, it would probably be a huge problem getting it licensed, but ethically there's no problem. It's two businesses reaching an agreement, and Garces would either be paying Moore Brothers for the exclusivity or they'd be paying him for the floor space, depending on who got the jump on who. And if Jon Myerow at Tria wanted to cut a similar deal with Canal's, he could.
But the PLCB is a government agency with monopoly retail power. Myerow can't just find another company to make a deal with, or do it himself, because that's illegal.Illegal! He's got to go to the PLCB, hat in hand, and beg to be part of this new program. As would the folks at Chick's, or Southwark, or DiBruno Brothers, or any number of wine-friendly cafes and restaurants.
And the PLCB will either grant them the boon or not, according to their own agenda. A government agency that has an ironclad monopoly on retail sales has no right deciding to essentially grant that right to retail to one business and refuse it to another. The PLCB is totally out of touch with reality. They are "acting like a business" when they aren't a business. They are a 'business' with whom it is illegal to compete, a 'business' with the full force of government enforcement and coercion behind them, a 'business' that can interpret the law to suit themselves without fear of contradiction.
I'm going to have to quote Buddy "I married a PLCB manager" Hobart to express what I feel about this new initiative. "What I say to the skeptical," said Buddy Hobart, president of Solutions 21, "to those of us in the world who believe we've arrived and don't need to improve: Look up the word arrogant in the dictionary." When you find that page, I believe you'll find the PLCB logo next to that definition.
And of course, I'm shocked -- shocked, I tell you! -- that PhillyMag would run this story without a word about how this might unfairly impact other city businesses. What's that you say? Why yes, that's the same PhillyMag that co-sponsors the Philadelphia Whiskey Festival with the PLCB (which also runs one of these mini-stores right at the festival, while not allowing brewers to sell at beer festivals), and not a word of disclosure in the story.Good separation of advertorial and editising departments there.
"...there was [in 1997] no overarching passion within the General Assembly, or in the public at large, for privatization. Unless and until there is a general hue and cry, it is very unlikely there will be a privatization initiative that succeeds." -- John E. Jones III, former PLCB chairman
Send them to me. I'd love to hear from you, and take those ideas and blend them with mine. And if you're in favor of the continuing existence of the PLCB, well, send me that, too. If it makes sense, I'll publish; if it doesn't, I'll publish it also, but I may have to disagree with you.
