Another Liquor Privatization Plan Mashed Together in Harrisburg

pwcover0113Remember 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.

PLCBadA 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.”

5 Responses to “ Another Liquor Privatization Plan Mashed Together in Harrisburg ”

  1. Jon Geeting says:

    This plan is wack! The actual relevant lesson here from the Soviet Union’s collapse is that partial privatizations are terrible. If you don’t fully privatize in the first round, you create a class of winners who then use their political influence to prevent further reforms. If you want a decent alcohol market, then all the incumbents need to be expropriated – state store unions, beer distributors, and tavern owners. Throw it all open to supermarkets right away, charge a flat fee to anyone who wants to sell alcohol, and let the chips fall where they may.

  2. Dick says:

    Start the break-up process with the beer distributors. Break up these cheftains monopolies first. Let the free market decide where and how many beer distributorships any and all locales are to have. The government should have no say. See what happens. Learn from the process. Then, maybe take the next step which is to let the boosters sell beer, wine and spirits at the Little League and football games.

  3. Allan Snyder says:

    Dick, you forgot to mention the possibility of liquor stores on every street corner.
    Sure, none of the doomsday scenarios have come to pass in any of the 47 or 48 states that have some type of real privatization of wine and/or liquor sales, but fearmongering is all the plcb and its union have got.

  4. sonya hawkes says:

    IT’S EASY FOR THOSE THAT DON’T HAVE A JOB THAT THEY’VE BEEN AT FOR 27 YEARS TO SAY “DISMANTLE THE PLCB” WHAT ABOUT US. LET SOMEONE COME IN AND GET RID OF YOUR JOB. HAVING A PRIVATE SYSTEM WILL NOT MAKE IT BETTER. A STORE ON EACH CORNER IS NOT A MAJOR CONCERN BUT THAT LIQUOR AT THE READY IS. I’VE BEEN IN A FEW OTHER STATES THAT ARE PRIVATE,I WAS SCARED TO ENTER THEM, (ALANTIC CITY) FOR ONE. THE PLCB IS NOT AS BAD AS PEOPLE WANT YOU TO BELIEVE. I WORK IN A GREAT STORE THAT OFFERS MANY COOL WINES AND SPIRITS AND MY CUSTOMERS LOVE IT!
    BEFORE YOU MAKE THE SYSTEM PRIVATE, THINK OF THE EMPLOYESS OF THIS SYSTEM. WE PAY TAXES TOO!

  5. [...] summarizes the sucky partial privatization plan that will apparently be getting a vote today:Last we checked in, the problem was putting together a General Assembly coalition of forces that’d get enough votes [...]

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