Booze News

 

Not in the Holiday Spirit(s)

DECEMBER 3, 2013 | by DAWN MELING

If you like a good deal, nothing beats shopping during the holidays. Retailers will do whatever it takes—sales, coupons, early bird specials—to get an edge over their competition, all to shoppers’ delight. But what if you have no competition? What if, say, you’re a government-run liquor monopoly?

In that case, like the PLCB, you simply pretend to satisfy consumer needs. The PLCB's half-hearted efforts were obvious yesterday, on Cyber Monday, when the PLCB offered free shipping for online purchases. Not free shipping to your home—but to the government store of your choice. How customer friendly! After you select the wine or spirits the government has decided you can buy as a Pennsylvania resident, you are then afforded the luxury of driving to a store to pick it up at their convenience, not yours. Imagine if your Amazon order was only available for pickup during business hours at a government agency.

Meanwhile, in Washington state, which privatized spirit sales over a year ago, stores are competing and consumers are winning. The Columbian reports, “Local spirits sellers are pulling out all the stops to compete for those sales. It's a contest that has some retailers expanding store liquor departments, others carrying holiday gift packs and some offering extra services such as online sales and abundant, well-trained sales associates on the selling floor.”

If that doesn’t put you in the holiday shopping spirit, perhaps the PLCB's Holiday Gift Guide will. In it, the government recommends what alcohol you should purchase for the “trendsetter” or “business associate” in your life. And don’t forget, the same agency that’s promoting the purchase and consumption of holiday-related booze is also the same agency tasked with educating and enforcing responsible consumption. Conflict of interest, anyone?

No matter how they try to mask it, the PLCB can’t serve consumer needs like the private sector can. But until we end the government booze monopoly, happy holidays from the PLCB—your only choice for seasonal spirits in Pennsylvania.

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A Band-Aid for Broken PLCB

NOVEMBER 12, 2013 | by BOB DICK

A change has come to Pennsylvania's state-controlled liquor monopoly that will improve the customer experience, according to the PLCB. Are we finally going to get liquor privatization after eight decades? No. According to the Times-Tribune:

Companies that sell liquor and wine to the LCB like Diageo, a British-based liquor supplier, now retain ownership of that liquor while it's stored at the warehouse. The LCB takes ownership of the inventory when it ships from the warehouse, a departure from past practice where the agency owned the liquor while in the warehouse.

The new arrangement is said to improve costs and efficiencies because companies now have the ability to ensure high in-stock levels at state stores, which will lead to more sales. But this improvement is like putting a Band-Aid on a broken leg.

If you have been following our work on the PLCB, you'd be rightly skeptical of inventory system improvements. The PLCB has already had its fair share of inventory problems. Not long ago, they poured $66 million in taxpayer money—nearly two-and-a-half times the estimated cost—into a "state of the art" inventory system that failed to allocate adequate product levels, causing widespread shortages at retail outlets.

Regardless, a simple inventory improvement doesn’t change the fact that the current system still cannot adequately serve the business community or consumers. The PLCB doesn't deliver to restaurants, bars and taverns. And it contracts with private companies for warehousing and even delivery to their own state stores. One of those companies is Kane Warehouse, Inc., owned by the husband of Attorney General Kathleen Kane, which received more than $12 million in payments from the PLCB last year. And the PLCB's economies of scale, which are greatly exaggerated, have not been effective at holding down prices, as compared to other states.

PLCB officials announced, “The goal of the distribution system is to get the right product to the right store at the right time so customer needs are satisfied.” If that is truly the goal of the PLCB, then privatization is the real solution. Entrepreneurs—not a mismanaged government agency—can better serve consumers in their communities.

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Liquor Privatization Saves Lives? Part II

OCTOBER 28, 2013 | by DAWN MELING

Public safety improved in Washington state after liquor store privatization, we told you back in July. As further data comes in, the results continue to impress: Most state alcohol-related arrests continue to decline. DUI collisions and charges for “minor in possession” both improved following privatization.

But what about preventing sales to minors? Pennsylvanians have heard the UFCW claim they can do it better than the private sector, though state police don't peform sting operations in PLCB stores. Here's how they've fared in Washington

Judging from the first year of data, the private sector has stepped up to this challenge. According to the WSLCB’s “Compliance Rates for Retailers Since 2012,” those private sector stores with at least 10,000 square feet (as required by Initiative 1183) or former state contract stores have averaged just over a 92 percent compliance rate. The most recent check for August 2013 showed a compliance rate of nearly 94 percent. These numbers do not show a significant drop in compliance rates with private liquor sales.

Using data from the Washington State Patrol, the Washington Policy Center has found that the improving trends of alcohol-related arrests in their state were not reversed, to the consternation of privatization opponents who claimed otherwise.

State control wasn’t keeping Washington residents safer. And now residents are enjoying improved public safety reports, in addition to increased sales and tax revenue, thanks to ending their government alcohol monopoly.

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Podcast: House Offers Compromise Language on Liquor Bill

OCTOBER 8, 2013 | by JOHN BOUDER

Public support for liquor privatization is as strong as ever, as our recent survey makes clear. So what’s happening with legislation that hit a snag in the Senate this spring?

Marcia Lampman, Executive Director of the House Liquor Control Committee, joins us again to discuss compromise language that could put privatization back on track for success. Click here to listen.

Marcia explains new licensing and permitting changes, revised store closure language, and a fast-tracked valuation of the state’s wholesale system that feature prominently in the new proposal outlined below.

In case you missed it: Marcia joined us back in June to explain in detail why the wholesale side of liquor privatization is so crucial.

Liquor Committee Amendment to Senate

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Getting Rich off the Government Liquor Monopoly

OCTOBER 3, 2013 | by NATHAN BENEFIELD

Joe Conti, who once cosponsored legislation to privatize the state liquor store system, keeps finding a way to profit off of the state's monopoly on wine and spirit sales.

After retiring from the state Senate following the pay raise debacle, then-Governor Ed Rendell appointed him to a six-figure job as Executive Director of the Pennsylvania Liquor Control Board.  Who did he replace?  No one. The position was created just for him.

This year, Conti resigned under the cloud of an ethics investigation into allegations that he took gifts from PLCB contractors.  Where did he go next?  He took a job as an "emergency consultant" for, bizarrely, the PLCB.  The only emergency was that Joe Conti needed a job.  As it turns out, he earned $67,000 in six months as a consultant—while collecting a state pension—but such double-dipping is limited.

Now Conti has a new gig—lobbying for the union representing state liquor store workers, otherwise known as the UFCW.  The UFCW recently put a million dollars into anti-privatization ads, paid for with taxpayer-collected union dues, so it's no shocker they would hire another high-priced lobbyist.  Of course, Conti won't be doing anything different from his previous job on the state payroll—see his "Alternatives to Privatization" memo as an example on how he violated the PLCB's supposed neutrality on legislation.

Ladies and gentlemen of Pennsylvania, this is our government liquor monopoly.

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Guest Post: Opening Up Alcohol Market Competition is the Correct Liberal Position

OCTOBER 1, 2013 | by JON GEETING

Today, Jon Geeting of Keystone Politics joined CF's Matt Brouillette to unveil a new survey showing strong bipartisan support for liquor store privatization. The following are Jon's comments from the press conference which are posted on Keystone Politics.

First I want to stress that nothing Matt just said is at odds with progressive political views. In almost every other state, the Democratic Party’s position is that allowing people to buy beer, wine, and liquor at the grocery store is perfectly compatible with liberal economic policy views. This is a no-brainer, and it’s why 54% of Pennsylvania’s Democratic voters and 70% of independents support our position.

We’ve all visited other states at some point in our lives and we’ve all seen that grocery and convenience store sales are more convenient. Many of us have been to Wegmans in Pennsylvania, and have already seen how regular grocery store beer sales work. People simply are not buying that their towns will turn into lawless hellscapes just because people are allowed to buy a six-pack at the gas station.

Democratic voters aren’t buying that, and privately, I’m sure Democratic lawmakers don’t buy it either. My House representative Brian Sims and my state Senator Larry Farnese must know that our neighborhood in Philadelphia would get excellent specialty wine and liquor stores. They must know that entrepreneurial folks in our area, the kinds of people who have been investing in new restaurants and bars, would love the opportunity to open some nicer stores that host wine tastings and all the rest. It’s simply undeniable that lowering barriers to entry for these small business people would be great for our district, and so many others in our big population centers.

And that is really the problem with this debate. If everyone simply voted their district interests, retail alcohol reform would have passed a long time ago. A coalition of urban Democrats and suburban Republicans have every reason to get this done if they’re putting their district interests first.

Unfortunately our friends in the Pennsylvania Democratic Party are choosing to play a very cynical game rather than negotiating a win for consumers in their districts. They are ignoring the wishes of their voters in favor of coalition maintenance concerns. Party-aligned special interest groups like the UFCW are asking Democrats to support an unpopular position which protects their narrow interests, and Democratic lawmakers are unanimously standing with this small group of rent-seekers over the broad interests of consumers and most Democratic voters.

But in case any of our friends have convinced themselves that their voters and the special interest groups all want the same thing, these survey results should make it clear that is not the case. Registered Democrats were 50% of our survey respondents, and 65% of those respondents want to buy beer, wine, and liquor in grocery stores along with various other private stores. Only 33% support giving the beer distributors exclusive rights to wine and liquor sales, or some of these other half-measures that have been floated by Senator Jim Ferlo and others.

Democratic voters are not impressed with any of these “modernization” plans because they are rightly suspicious of arbitrary economic power. This is core to progressive politics. If we were talking about a natural gas monopoly, every Democrat would immediately recognize the problem with letting a single company sell and regulate the same product. In any other instance, Democrats would be the first to tell you that a big business can’t be trusted to self-regulate. It may be that the unified front among Democratic elected officials and unions, or the fact that the LCB a public monopoly and not a private one, has confused some people about what is happening.

Because the reality is that we cannot trust a public monopoly to be a virtuous self-regulator any more than we can trust a private monopoly. Monopolies with unaccountable power always breed corruption. There is nothing remotely surprising about the ethics complaints we routinely see about PLCB officials accepting personal gifts and favors from alcohol vendors. If the Department of Environmental Protection officials were caught accepting gifts and favors from the natural gas companies they are supposed to be regulating, progressives would be flipping out. This thing stinks, and nothing short of separating the retail business from the regulatory role is going to change that.

This is a very important point, and it’s one of the main reasons why retail alcohol reform deserves Democratic support. The evidence that Pennsylvania is getting any kind of public health and safety benefits from these anti-competitive regulations is extremely weak. Pennsylvania ranks near the top of the list for drunk driving fatalities, binge drinking, and underage drinking. All this inconvenience, and not only do we have nothing to show for it in terms of improved public health outcomes, but we’re actually doing really bad on some of these metrics.

Our regulators are basically out to lunch on the most commonly-abused drug, and there’s even some evidence that they’re actually making things worse on the underage drinking front with their marketing campaigns. Ideally the LCB’s focus would be on cracking down on things like alcohol marketing, not doing it themselves. But until we stop distracting the PLCB with non-governmental duties like centralling planning a statewide retail sector, we’re going to have inadequate regulation of liquor sales and pathetic compliance with our alcohol laws.

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