Another Liquor Privatization Plan Mashed Together in Harrisburg
Remember liquor privatization? It was this thing in the Pennsylvania State House that was supposed to get the government out of the liquor business. But instead, when all was said and done, it looked more like a blueprint to complicate the system a bit more, if that were possible.
But complication is complicated. And creating a coalition in the House and Senate to get enough votes to make anything happen on this front is proving a bit difficult. The fight is being fought from all sides—the UFCW (the union of state liquor store employees), the Harrisburg-based conservative think tank the Commonwealth Foundation (which wants a complete privatization plan), the Republicans, the Democrats, the liquor stores, out-of-PA businesses wanting a share of the market and the governor–who announced toward the end of his campaign in 2010 that he wanted a private liquor industry, which governors before him have tried and failed to accomplish since the Liquor Control Board was created by Pennsylvania Governor Gifford Pinchot in 1933, to “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.”
Because of all these groups, putting together an Assembly-based coalition that’d make up a majority has been deemed by some, like Philadelphia State Rep. John Taylor, as sort of figuring out a “Rubix cube.”
“As soon as you twist one color, another color gets out of joint,” he told the Morning Call.
There’s essentially a mix up of pro-union Democrats and pro-family (or something) Republicans who outnumber the pro-complete privatization wing of the Legislature and don’t want the government out of the liquor business. So improvisation has become essential.
A reconfigured plan would not leave the whole thing up to the free market’s invisible, Gin-soaked hand. It would instead issue 1,600 wine and spirits licenses, giving beer distributors the first crack at licenses to sell wine and liquor, while auctioning the rest off. Restaurants, bars and supermarkets would be barred from selling wine and spirits for 10 years.
In the first five years, wine and spirits (state) stores would begin to wind down. In remote parts of the state, they’d be able to stay open longer. It’s estimated the initial sell-off of the retail licenses would generate $750 million, not the $2 billion originally promised by advocates of the sale, although this plan on the state stores front is arguably more “private” than the original plan.
The PLCB ended 2011 with negative $31 million in net assets and the butt of both jokes and outrage; their ultimate losing strategy to sell wine through kiosks ended and advertisements which depicted a woman having gotten too drunk then raped became a national issue.
Pennsylvania is currently one of two states—the other being Utah—where the government controls wholesale and retail sale of wine. Last we talked to Commonwealth Foundation spokesman Jay Ostrich about this, he noted, “That process is not unlike the Soviet-style systems that existed in the USSR, except the PLCB has outlived the USSR by 22 years.”