Reality check: how is "modernization" working out?

The end of February marked eight months gone of the fiscal year, and just under seven months of Act 39's "modernization" of the state's police-enforced monopoly on wine and liquor sales, changes that Governor Wolf trumpeted as "historic."

So things are booming for the State Stores now, right? Well...not exactly.

Remember how bailment was going to cut inventory costs and save the citizens all sorts of money? It may have but it didn't last. Inventory cost went up over 10% so far this year and has now gone up over 46% since bailment was implemented in 2012. It will certainly pass pre-bailment amounts next year with a modest 3% increase. For the same period of time, the inflation rate went up 6.2%. (2012 Inventory $175,902,668; 2017 Inventory (so far) $257,285,382; Pre-bailment inventory $265,816,891)

Still, with all that inventory they must be making more money right? Sorry! Total Operating Income is down almost 5% year to date, while total assets squeaked out a gain of 4.2%. Meanwhile, Total Liabilities jumped almost 16%, from $803.7 million to 930.5 million. (And you know who has to cover that; you and me, the taxpayers.) Total debt is up almost $50 million more than at this time last year; $264,454,330 or about $26 million in additional debt than at the end of last fiscal year. To be fair, the PLCB statement has numerous notations about 'See Note X, Table Y', but they don't provide what those notes are. Are they valid reasons, or just lame excuses? The public doesn't know, and the PLCB clearly doesn't think we need to; it's kind of like their selection, if they don't have it, we don't need it.

The Never-Ending PLCB Story!

The PLCB is selling more product while making less money. In desperation, they're dipping into reserves to make a big payment to try and fend off  privatization, blowing smoke as thick as possible so you don't notice that they're going even further in the hole with liabilities approaching a Billion dollars...all the while remaining as incompetent as ever.

The benefits of modernization? I'm not seeing any evidence of that extra $137 million the Governor said they would make, and I'm willing to bet I won't, with only four months left in the fiscal year.

How many reasons do you need to get rid of this broken system and replace it with one that works for the consumer?

April Inventory Idiocy

I'm a Scotch guy, and I know a fair amount about it. Although they have a statewide monopoly on selling it, the PLCB doesn't...and I'm going to pick on them for that.  How incompetent/stupid/'we don't care' are they this month? Let's take a look.

I'll start off with Glenmorangie single malt Scotch whisky. The PLCB lists 25 bottlings of Glenmo on their website between on-line, in-store, SLO, and of course, "out of stock." So how many do you think you could actually get?

Well, there are nine out of stock, some of which we will never ever see again; inventory padding, really, just like the Jack Daniel's examples I pointed out here. So that leaves sixteen...right? Not exactly. The PLCB likes to double count the exact same item that they have on the shelf...and what they can supposedly only get by SLO.

Here are two examples. First, the Quinta Ruban:

It would seem that cutting and pasting the picture is beyond the ability of the people who do the inventory, and why is the price different? And before you even ask; no, there's only one expression of Quinta Ruban.
 
Next! The Nectar D'Or [a favorite of Lew's ...but not bought from the PLCB!]:

They still can't figure out how to post the exact same picture in two different places, but at least the price is the same this time!

So now we are down to fourteen. Whoops! One is supposedly "Coming Soon," so we're down to thirteen. Now how many do you think you can actually get?

Well, two are listed as "On-Line Exclusive," which may or may not mean you can find one or two in a store. (The PLCB has made that mistake more than a few times.) Are they really there? Looking at the inventory listed in the current Product Catalog, they aren't listed at all, but other out of stock online exclusives are — like the Glenmorangie Signet which the Product Catalog says is available,  but SLO and the FWAGS website says it isn't. So which is it?

Then there is the 18 year old New World which FWAGS says is out of stock but the Catalog says is available. Do these people have any idea what they're doing?

We really don't know HOW many of these are actually available. Who can say, since the inventory, like the rest of the PLCB, is entirely screwed up.

Why do we continue to put up with this incompetently-run "business" which can only make a "profit" with a police-enforced monopoly and by gouging the people they are supposed to serve with artificially high costs and variable pricing?

End the insanity, Tell your Representative to support HB 1075 and get the state out of this mess and back to what is considered normal by the vast majority of the states.

The numbers don't lie...but somebody is

In the House Appropriations Budget Meeting for the PLCB held earlier this month, the PLCB leadership said that they would have to dip into reserves to meet the Governor's anticipated request for $185 million. Why is that, if "modernization" is going to be the windfall that the Governor (and clerks' union president Wendell W. Young IV) says it is? Are their arguments that facile?

The Governor said in his "Budget In Brief" of 02/07/17 (pg.15) that through modernization ..."an additional $137 million in LCB revenues will be generated." The PLCB didn't correct or disagree with that number. So let's see what doesn't add up. If their income for FY 2015-16 — after paying for the BLCE, but before the General Fund Transfer — was $103,856,933 (which it was, according to their financial report), then a $137 million increase would take it to just over $240 million. But if the PLCB has to dip into reserves to pay $185 million, that has to mean that their so-called "profit" is less than $185 million.

OH NO!  42 million of my friends are missing!

However, during that same budget meeting — in sworn testimony — the PLCB said that even with record sales again, they would only make about $90 million for FY 17-18. That $90 million and $137 million "modernization bonus" take it to $227 million in total. That's $42 million more than the $185 million they said they could pay IF they dipped into reserves. So where is this $42+ million going? If they make the $90 million they project, and the $137 million additional that they didn't object to, then turning in $185 million to the General Fund should be no problem. Remember that these numbers are what the PLCB calls "profit," so everything (except the $238 million in pension debt...but that's another story) is already covered.

We have to ask: why after all the "modernization" is in place does the PLCB think they are actually going to make LESS than they did in FY 15-16?

Could it be that "modernization" is a sham, and that it isn't going to bring $137 million, or $100 million, or even $80 million? Is being off by well over 60% how the Governor and the PLCB do estimates? How big a failure is this going to be? The MINIMUM $42 million off would push this well beyond wine kiosk failure, or the 66% computer cost overrun, or selling house brands or anything I can think of. This would be a failure the size of the 82 year lie that the State Stores would be convenient to the public. They got what they wanted, "flexible pricing" and all, so show us the modernization money, PLCB!

Do the math and decide: are they just stupid? Or is the PLCB deliberately misrepresenting how much money they will bring in for the Commonwealth?

Why does PA think the PLCB has more value than the Military?

Back in August of 2014 I wrote about the supposed value of the PLCB workforce compared to the rest of the labor market. I said, "One can get an idea of how society values a profession by the compensation given." It's a fundamental truth of how the free market works...except in Pennsylvania, where the Legislature has denied reality for decades and inflated the value of PLCB workers to an extreme.

What do I mean? Try this. According to testimony at the State Senate Appropriations Committee meeting of 2 March 2017, the average value of benefits for a full time PLCB employee is 93.6% of salary; so for example, the value of benefits for a clerk making $30,000 a year would be 93.6% of their salary ($28,800), so their total compensation would be $58,800.

Now, for the actual average of a Liquor Store Clerk 2, that's a total of $64,060 in salary and benefits. Here's the rub. Compare that to a US Army Sergeant (E5) with six years in service, who these days may even have a couple combat tours under their belt: $55,233. (If you want to check my math...see below.*)

Really? Why are liquor store clerks worth about $9,000 a year more than combat infantrymen to the state of Pennsylvania? Is their job more stressful?  Do they work longer hours? Do they perform a greater service to the citizens?

I don't know who made this shirt but I want one**.

Of course, you can make this comparison with other jobs, and if you saw compensation like that the prices would probably be higher at that store or firm...but the State isn't forcing you to buy products from that person in that place under penalty of law. You have choices in the free market: you don't have to buy that product, and you don't HAVE to shop in that store. You don't HAVE to support a monopoly. But you do...if you're buying wine in Pennsylvania. (Yes, yes, with the exception of Pennsylvania-made wines bought direct, right.)

So the next time you have to go to the State Store, or have to settle for something because the bureaucrats in Harrisburg decided not to sell the item you wanted in their monopoly system, and they don't allow you to go anywhere else, stop for a moment. Ask yourself if maybe the state should be funding Veteran's care with the same zeal they fund state store clerks.

Privatization fixes that.


*pennwatch.pa.gov lists everybody and their salary who works for the state including those in the PLCB. Search under Liquor Control Board for Agency Name, then select Liquor Store Clerk 2 under the Positions drop-down menu in the results. There are 22 pages of data: add up the individual salaries, divide by the number of them to get an average, and then multiply that result by 1.963 to get the total of the average salary and benefits. For those working for Uncle Sam it is a bit easier.  They do it for you on this site (I used the PLCB HQ in Harrisburg zip code). I've just gone ahead and done the math on the PLCB compensation for you, but you can check my work.

** Buy the T-Shirt here!

After 80+ Years...There are Some Things You Should Know

Looking at the PLCB's inventory sometimes gives the impression that they never learned to read the simple information on a liquor label. If you call them on it, they are usually pretty quick to blame the vendors, saying they are supposed to provide this information. But passing that buck just proves they don't really care if the information the public gets is correct or not.

Let's see how stupid they were this week.

I can't even begin to come up with any excuse why this isn't filled out correctly; maybe they can't read and type in the same day.

This one is a little trickier because, uh, you know, it's a long way from the 1st to 4th line.

This one is simple if you've been in the liquor business long enough to get your first paycheck: Scotch can only be made in Scotland. Period. The Scotch Whisky Association, the EU, and the US government all agree. In fact, there are a number of these types of spirit; I'll list the others as a service to the PLCB, in case they get confused again.*

• Bourbon can only be made in the U.S. - so that means it is all domestic.
  
• Cognac can only be made in the Cognac region of France - that means they are all imported.
• Armagnac and Calvados can only be made in France -  also all imported.
• Irish Whiskey can only be made in, yup, Ireland - again, imported.
• Brandy de Jerez can only be made in Spain -  so they'd be imported.
• Tennessee Whiskey can only be made in Tennessee - that means it is all domestic.

Now I know it will take some time to fix this (although a real business could probably do it in a week, or less). So I'll keep posting examples just so they don't forget or ignore it, like they have been for the last 20 or 30 years. You know..."in the public interest."

Went to see the chairman, strangest I could find,
Laid my proposition down, laid it on the line.
I won't slave for beggar's pay, likewise gold and jewels,
But I would slave to learn the way to sink your ship of fools.

We deserve better - PRIVATIZE NOW.


*If you have any questions about this you should have asked them decades ago but just in case - here is the U.S. Department of Commerce's Office of Trade Agreements Negotiations and Compliance letter on the subject.

Led, managed and staffed by incompetents

Pretty rough title isn't it? Sure, I'll admit it is...unless you can prove it.

Let's keep looking at the "improved product search feature of the Fine Wine & Good Spirits online store," as Chairman Holden called it 2 years ago!. To me, it is still so bad I can't think of anything they actually improved. Just reference the last blog post, where I talked about the PLCB not being able to get the product totals matching across the inventories available to the public; they couldn't even get them to agree on the same page.

The reason for that may be the thousands of dead listings for products no longer carried that the PLCB doesn't clean out of the system. I'm guessing it's because that would be THOUSANDS of products that they could no longer claim when they make their boasts to the public about how many thousands of products they carry. Do you really think that the 2011 Jack Daniel's Holiday Select is coming back?  It's been five fricking years since it was in stock, but it's still listed in the system. Maybe they're still waiting to get that picture before they delete it.

Am I cherry picking? Yep, and here is the 2012 cherry...

And the 2013 cherry too!

You do see the "Out of Stock" on each one, right?

How incompetent to you have to be to keep something on inventory for five years when it is NEVER EVER going to return? Maybe it's because they're using a search system that was probably designed during the punch card era. You want to see how bad the search engine is? Let's look for some Old Forester.

It's going to be hard for the PLCB to admit it, but there aren't 1074 matches to Old Forester, and I guarantee none are Ardbeg, Aberfeldy, or Glenfarclas single malt Scotch whisky. Pretty worthless, isn't it? To add even more intelligence-insulting idiocy, if you look at the "Brand" listing on the left you won't even find Old Forester listed. Should I be more specific in my search?  Go ahead and put in Old Forester Bourbon and see what that gets you. Narrowing it down takes the number of hits from 1074 to 1355, now that's an improvement. No, that isn't a typo: being more specific increases the number of wrong choices to pick from.

Think that's bad? How about the 5,044 choices — of which 5,036 are wrong — for Four Roses:

How do real businesses handle this? You know, the ones that depend on customer satisfaction (because they don't have a police-enforced monopoly)? Let's have a look. Of course none of these are as big as the PLCB or have as many employees, or a $66 million computer system.

Binny's IL

Hi Time Wine CA

France 44 MN

State Line Liquor MD  (you'll have to enter "Old Forester")

This isn't rocket science...unless you work in Harrisburg. Free states have liquor stores with a real inventory of real products you can actually search for and find, and go to the shelf and touch. Not every store, of course, but Wawa ain't Wegmans, either. The PLCB claims to be "world class," so their online inventory system should be world class. It isn't.

The PLCB doesn't really give a damn about you, the consumer. It is easier to put plants in the stores and aprons on the clerks than it is to fix the systemic and inherent flaws in the leadership, management, and operational systems.

Went to see the chairman, strangest I could find,
Laid my proposition down, laid it on the line.
I won't slave for beggar's pay, likewise gold and jewels,
But I would slave to learn the way to sink your ship of fools.

We deserve better - PRIVATIZE!

Tracking the Trackers

Real business knows that tracking inventory is important, but the PLCB doesn't.

The faster, better, easier Product Search Page online inventory was recently down for almost four days.

FOUR DAYS! 

What kind of business has their inventory unavailable for four days?  A poorly run and managed one. They could use the excuse that their "other" inventory page (the "Fine Wine and Good Spirits!" page) was available. But look here: if they can't even get the category numbers to jibe on the same page, why should you trust that inventory?

I was looking at Cognac on the Product Search Page when it went down, so I had to use the "Fine Wine and Good Spirits!" website instead, which led me to this page. You'll note that the full number of items at the top is shown as 214; but the total of the available items shown at the left...is 189. Huh?

In the real world of my business, the total items available should match the total in inventory. Listing products you don't have or can't get serves no real purpose except to inflate your numbers when you lie to the citizens (or the Legislature...again) about how many products are available. Something that both the UFCW and the PLCB are prone to do, and we've told you that for years.

Not being able to match numbers on a single page begs the question of where these inventory numbers came from, and why don't they match across online product searches. Take a look what happened when I tried the same search on the Product Search Page once it came back up:

This total, 174, doesn't match 189 or 214, so which is it, PLCB? What random number is closest to what you actually have? I'd bet that none of them are correct, given the history of incompetence at the agency. For over five years they haven't been able to get Jack Daniel's (spelled "Jack Daniel's", see the label to the left!) listed correctly. They have Jack listed in both Whiskey, Bourbon (Straight) and Whiskey (Blended) and use a few different spellings. If they can screw up their #1 seller that much imagine how badly they screw up the rest.You can find your own examples if you think I'm cherry picking. I mean, I am, but believe me, I could pick the whole damn tree for you.

While inventory numbers are important, so is knowing what you are selling. If you look at the above picture again, you'll see it says COGNAC (IMPORTED). Guess what, PLCB: it's all (IMPORTED), because Cognac can only be made in Cognac, France! There is no such thing as COGNAC (DOMESTIC). Ya dopes.

It's just another example of the poor quality customer service that inevitably comes from a monopoly, because they know they don't have to do anything better, since the consumer can't go anywhere else. A real business depends on current, correct and factual information being provided to the customer, because they know they wouldn't be in business if they ran things like the PLCB does.

End the fiasco of fake business and PLCB incompetence - PRIVATIZE.