Privatization works.

Twenty years ago today Alberta Canada started the process to privatize the government run liquor stores much like Washington did last year and like Washington they did it fast and full bore. So what did they get for their efforts?

Increased selection. True in both places. Washington has over 30 superstores now (with more being built) where it had none before and Alberta went from 2,000 items available to tens of thousands.

Increased convenience. Washington went from 329 state stores to 1500 private stores.  Alberta went from 200 stores to 2,000 stores

Decreased Impaired death rate. Washington DUI and DUI crashes are both down over 9% since privatization. Alberta's DUI death rate at 1.1 per 100,000 it is lower than any state and half of what it was, 

Increased employment.  Washington had 931 state store workers. 3 warehousing firms alone hired 1,100 workers. Each of the over 30 superstores needed 25-40 workers and the 1,100 new stores needed some workers. While I was unable to find Alberta's liquor store employment from 20 years ago it is safe to say that going from 200 stores to 2,000 stores and the associated warehousing and transportation certainly resulted in more jobs.

Alberta is still working on wine in grocery stores 20 years later, much like we are still working on the same thing 80 years later. However, the system has been a boon to consumers and created a new entrepreneurial class in Alberta, both through retailers and licensed liquor agents.

As the linked article above points out "It seems ridiculous grown adults in this country should have to buy a legitimate consumer product directly from a government depot. While alcohol abuse is associated with social ills in some cases, that some people don’t mix well with booze is no reason for a government monopoly."

Privatization IS Modernization. Accept nothing less.

Hello and Goodbye

I'd like to thank Lew for this opportunity and hope that I can approach his standards.  I know he'll be watching so I'll try to do my best. 

Not being shy I'll jump in with both feet and start now with some "convenient" facts about PLCB convenience.


"Dale Horst, director of retail operations for the PLCB, said the board decided to extend hours at many of its stores as part of a broad effort to meet increased customer demand."

OH - 1 Sept - stores open 5:30AM to 1AM at discretion of the owner and / or local ordinance. 2 Sept - Stores open 5:30AM to 1AM at discretion of the owner and / or local ordinance.

NY - 1 Sept - stores open noon to 4AM at discretion of the owner and / or county ordinance. 2 Sept - Stores open 8AM to 4AM at discretion of the owner and / or county ordinance.

NJ - 1 Sept - stores open according to local code, most allow Sunday sales 9AM to 10PM. 2 Sept - Stores open according to local code, most will allow normal hours on Labor day 9AM to 10PM.

MD - 1 Sept -  stores open according to county codes, no state limits on hours, most open on Sunday. 2 Sept - Stores in all but 2 counties open.

DE - 1 Sept - stores open noon - 8PM (subject to local ordinances). 2 Sept - Stores open 9AM to 1AM at discretion of the owner.

WV - 1 Sept - stores open from 1PM to 2AM at discretion of the owner for beer and wine only. 2 Sept - Stores open from 7AM to 3AM for all sales at discretion of the owner.

PA - 1 Sept - 75% of stores closed, remaining open noon to 5PM. 2 Sept. - All stores closed.

True customer convenience comes from supplying a product or service that the customer wants in a manner that they want it.  All of the states have regulatory boards but only one severely limits the customer to what THEY want and not what the customer wants.  As you can see PA is still the most inconvenient place to shop of all the surrounding states and a few extra hours does not change the system that is in place. We need to demand better. We need privatization.

Goodbye, and Hello

As I mentioned in my last post, there is going to be a major change in this blog.

I'm going to stop writing it.

I have accepted a full-time position as managing editor of Whisky Advocate magazine, which starts today. Part of the terms of employment were that my writing is to be exclusive to the magazine, so I agreed to stop writing further on this blog.

However...the blog will go on. "Albert Brooks," an active proponent of privatization who has supplied ideas for posts to me in the past (and a tireless researcher of the PLCB's financials), and Joe Richards, who writes the 1WineDude blog, have agreed to post here on an occasional basis to keep things moving along. I welcome them, and thank them, and hope you'll enjoy what they have to say.

This means a lot to me. I've wanted "Albert" (yes, it's a pseudonym, and I understand and support his reasons) to have a broader forum for some time. Joe will add a new dimension to the blog. I've always wanted to have more about wine here, because it's a vitally important reason for privatization, and I simply don't know that much about it.

So this is going to work well. I'll still be reading, of course, and I'll still be moderating the comments; same rules apply, so only make personal assaults on Albert and Joe if you want to be the only person who reads them! Stay on topic, and we'll be fine.

I'll also encourage you to read what Jon Geeting has to say about State Store privatization at the Keystone Politics blog; I do, and I've quoted him frequently here and on Twitter. Jon and I don't agree 100% on how privatization should be done -- I don't think any two Pennsylvanians do! -- but he eloquently makes the case for liquor privatization from a Progressive standpoint, showing how this is not your usual "privatization" issue.

I truly hope that the major reason for the blog staying open will go away after the September session of the Legislature...but that's not the way to bet. We'll see. Good luck to everyone involved in the fight for privatization. Remember:

PRIVATIZATION IS MODERNIZATION!

Accept no substitutes!

Do Philly's Democratic legislators love the UFCW more than poor children?

Short posting, for two reasons. I'm busy as hell right now writing a book; and Jon Geeting pretty much says everything that needs to be said in his new Keystone Politics blog post:

Why Didn’t the Philadelphia Delegation Offer to Trade Alcohol Reform Votes for School Money?

He's spinning it off a Philadelphia Inquirer editorial today by Patrick Kerkstra: Ineffective Philly Leaders.

You should read both. Here is the Inquirer link; read it first. Then read the Keystone Politics link, here.

The point? Philly's almost entirely Democratic legislative delegation voted in lockstep against liquor privatization to satisfy organized labor, and missed a chance to compromise with Governor Corbett and Republicans to get desperately needed State money for Philadelphia's schools. As Geeting put it,

The only reason the Democrats aren’t offering Tom Corbett this trade is that they are putting coalition management concerns – placating the United Food and Commercial Workers union – ahead of adequate school funding for kids. Which makes sense in a perverse way – UFCW members donate money and this is a voting issue for them, while poor kids in Philly aren’t legally allowed to vote and can’t donate money to Democrats because their families are poor. The coalition management calculation is obvious, but the moral calculation is even more obvious. Consumers and city school districts could get a badly-needed win if Democrats would simply vote their districts rather than subsidizing rural Republicans’ drinking habits.

This is a voting issue. If your legislator screwed up on this vote, tell them, NOW, that if they screw up again in September, they've lost your vote.

Gotta go. I'll be back shortly with some news about where this blog is headed; major changes coming because of major changes in my career.

The Circle Game

The Tribune-Review ran this piece today with this stunning headline (be prepared for a shocker):

Reform at Liquor Control Board awash in politics 

Say it ain't so!


"A lot of people like that reform. Maybe we should get us some."

Thanx for the bux, suckers!

And where there's liquor, and politics, and a notable need for reform...there must be Joe "Da ex-CEO" Conti. In this case, it's his job: CEO of the PLCB. Given that the PLCB doesn't even have the required three members on the board (another ethics-challenged blast from the past: it's PJ "Call Me PJ" Stapleton's empty slot that hasn't been filled), and it doesn't look like they're going to be filled anytime soon (since the dysfunctional Senate is now ignoring the Governor's second nominee for the position), really? Why the hell do we need to start paying another political hack $156,700 a year? 

Without it, supporters say, the agency loses a level of professional management and efficiency only possible with a full-time chief executive.

It is to weep. Joe Conti, the embodiment of "professional management and efficiency." Well, look, if I have to remind you...just read the Litany of Conti here. Wow, just can't wait to get someone else in there to get things popping again!

Eventually, the piece comes around to privatization. "A proposal by Senate Majority Leader Dominic Pileggi, R-Delaware County, to phase out state stores and expand where beer, wine and liquor could be sold would recast the chief executive position as an “executive director."" I must have missed this proposal, but that doesn't surprise me; there was a lot going on behind the scenes.

Hey, Norm! What's up with that?

So is this proposal still in play for the September session? It must be, since Senator Jim "Sheetz-Damning" Ferlo is still bad-mouthing it.

“I think the Pileggi model was to micromanage,” Ferlo said. “There's a way for the... Legislature to have oversight, and that's through our appropriations.”

Yeah, except you don't make appropriations for the PLCB, Senator; they have their own sources of revenue (and their own cops, and their own courts, and their own grievance system (it's on page 8)). They don't need you, which is why they ignore you and all of us...until we want privatization. And then they prostrate themselves and suddenly service and selection gets better...until the threat of privatization goes away.

Mark my words: if privatization fails in this legislative session, the State Stores will slowly slide back to Suckville. And then in 10 or 15 years, we'll go through this whole charade again, and someone will call for privatization, and service and selection at the State Stores will remarkably improve...till the proposal fails, and around it goes again. How long do you want to keep playing this stupid game?

PRIVATIZATION IS MODERNIZATION. Accept no substitutes.

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.

RECORD PROFITS FOR THE PLCB!!!!

The PLCB announced the results of the 2012-13 fiscal year this week, and they were clearly happy with them. They had net income of $128.4 million (what they used to call "profit", but apparently we've trained them out of that), an increase of $24.9 million over the previous year, and "transferred" $512 million to the state's General Fund in taxes and fees, like the Johnstown Flood Emergency Tax and sales tax. The PLCB credits "robust sales and cost controls" for the increase, and a 6% increase in wine sales.

Happy control freaks immediately rejoiced, and one dropped a comment here this morning:

$128 million is hard to overlook.

Here's my response. 

What's that? The amount that was wasted on the wine kiosks? The cost overruns on the new POS system? Oh, the so-called profits for 2012! Well, hell, it's against the law to buy booze anywhere else, they ought to be making SOMETHING.

Seriously, glad you brought this up. The PLCB is doing some bizarre sack dance right now about the "record" amount of money they siphoned out of the pockets of Pennsylvanians the past year...and all it took was millions in advertising, national growth in wine and spirits sales, and a police-enforced monopoly. Wow, pretty impressive.

Except when you look at the gross sales vs. profits over the past few years. Five years ago, the PLCB's gross sales were $1.778 billion; this past year they were a record $2.171 billion, an increase of 22.9%.

Five years ago, the "profits" were $112.2 million; this past year, they were $128.4 million. That's an increase of 14.4%.

Profits not keeping up with sales? Well, their costs must have gone up, right? Actually, they closed about 30 stores in that time; I have to assume stores that were losing money (why close them otherwise?). So what the hell, PLCB? Where'd all the money go? Fatter salaries for bureaucrats? Courtesy contracts? De luxe wine tasting rooms? Or just failed programs, like the wine kiosks?

I know what some of your "cost controls" were that put profits up 24% this past year: not filling positions. Board member Robert Marcus admitted that earlier this year in legislative hearings, saying roughly 250 positions, many of which he described as essential, remain unfilled. Marcus tried to blame the Governor, saying he would not permit the jobs to be filled, but that's malarkey coming from an agency that has its own source of revenue and is all too independent. Corbett spokesman Kevin Harley noted (in this story in the Inquirer) that the LCB is an independent agency that controls its own finances and hiring, and said he was not aware of any open positions that the administration had refused to fill.

Meanwhile, up in New Hampshire, where they KNOW how to run a State Store System, they made $145.6 million in profits on less than a third of the gross sales the PLCB did. Oh, and they did it while charging a bit less than the PLCB. Kind of looks like the PLCB is -- as I've been saying -- grossly mismanaged and inefficient. Are these the people we want to trust to come up with "modernization" ideas?

I have one modernization idea: PRIVATIZE.