FEBRUARY 27, 2015 | by DAWN TOGUCHI
On Thursday, the Pennsylvania House of Representatives passed liquor privatization legislation sponsored by Speaker of the House Mike Turzai. You can see how your legislator voted in this interactive graphic from PennLive.com.
Back in 2013, the House passed the first liquor privatization bill since the end of Prohibition more than 80 years ago. With yesterday's vote, the House has recommitted to expanding choice and convenience for consumers by getting government out of the booze business.
We applaud the House for acting in the best interests of taxpayers and consumers and again recognizing that the vast majority of Pennsylvanians—no matter their political leanings—want government out of the liquor business.
Even with this victory, the liquor privatization debate is only just heating up. As talks continue, it's critical that these principles of liquor privatization undergird any changes to the legislation:
- Government should permanently and unequivocally get out of the business of selling alcohol and end the system in which state-run liquor stores, with all their advantages and taxpayer subsidies, compete against private mom & pop businesses.
- Only full privatization ends the conflict of interest inherent in having the Pennsylvania Liquor Control Board both regulate and promote wine and liquor sales with tax dollars. Modernization would allow the PLCB to continue to produce government-brand wine and fiascos such as the failed wine kiosk program, undermining Pennsylvania wineries, consumers, and taxpayers alike.
- Modernization or other measures that maintain the current state store system fail to move Pennsylvania into the 21st century and deliver the choice and convenience Pennsylvanians want. Modernization is like offering consumers a "touch-tone" phone—it's better than a rotary phone, but is a far cry from the smart phones consumers really want in 2015.
- To promote competition, lower prices, selection and convenience, lawmakers should allow the market to decide the number of outlets that can sell wine and spirits. At the least, the number of licenses should be set to the national average of retail outlets based on population, to keep Pennsylvania competitive with the rest of the nation.
- While beer distributors cannot expect to retain their protected oligopoly, proposals should treat them fairly in consideration of how much time and money they have invested in their business, including minimizing the cost of upgraded licenses and guaranteeing loan financing for new licenses.
Opponents of consumer choice will continue to employ the same scare tactics about privatization, but their arguments ring hollow (brush up on your facts and responses here). At the end of the day, government booze doesn't make us safer or economically stronger.
It's time to end Pennsylvania's Prohibition era once and for all.
DECEMBER 3, 2013 | by DAWN TOGUCHI
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.
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.
OCTOBER 28, 2013 | by DAWN TOGUCHI
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.
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.
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.