May 01, 2013

Private liquor sales in Pennsylvania to spell "Doom"

So say some folks in this article. Ironically, the two major political parties have sort of "switched" when it comes to this issue -- at least socially/culturally. The GOP has always been the one spearheading the privatization efforts in the state, whereas the Democrats have traditionally shot the idea down. Those against privatization list a litany of social ills that will befall the state should liquor stores become private -- more underage drinking, child abuse, higher divorce rates, out of wedlock births, etc.

Here's what I say: *YAWN* Grow up, people. Pennsylvania is only one of TWO states in the whole freakin' Union to so regulate the sale of alcohol. The other is ... Utah. That's right, Mormon-dominated Utah. Pennsylvania wants to be like that state. Or, so it has for decades now. And make no mistake -- Democrats do not oppose privatization because of all the supposed social ills that will overwhelm the state; they oppose it because they're in the pocket of the powerful union that has run state stores for like ever. And the GOP, which typically supposedly cares about such social ills, is too focused on the economics and free market aspect of privatization.

A few days ago, the Philly Inquirer -- surprise! -- featured an article highlighting why privatization is bad. Who'da thought, right? Unions, Democrats ... which side you think the Inky will come down on, eh? At any rate, said article points to a 2011 study by a group called the Community Preventive Services Task Force which concluded "privatization results in increased per-capita alcohol consumption." Yet, somehow, 48 other states have all said "no way" to state control. Why is that? Maybe it's because, as the article thankfully points out, what Antony Davies, an associate professor of economics at Duquesne University, says:

... the evidence is not strong enough to support the task force's conclusion. Pennsylvania, for example, has a high rate of binge drinking relative to other states.

Davies compared states that have government sales against those with privatized systems and found that state control does not correlate with lower rates of alcohol-related problems.

"The question we really want to ask is, 'Does state control lead to better outcomes?' " Davies said. "That research shows no significant relationship."

So, hopefully we'll soon say "Welcome to the 21st century, Pennsylvania" quite soon.

Posted by Hube at May 1, 2013 06:03 PM | TrackBack

Comments  (We reserve the right to edit and/or delete any comments. If your comment is blocked or won't post, e-mail us and we'll post it for you.)

I live in PA and one thing I do know is it all depends on how the state goes about the transition. Frankly, I don't trust them one iota. The corruption I forsee in the sales of the licences to own liquor stores will go to the well connected and the well heeled. I already see Wegman's Market positioning itself to buy up licenses. Where is the ability of "the little guy" to enter into a market that would potentialy require two to three million just to stock a store with product? I'll bet all the states polititcians will have their wives, nephews and cousins in the liquor business over night and the rest of us will, as usual, be screwed.

Posted by: Hoagie at May 2, 2013 10:45 AM

Maggie could be right except that there is no auction of licenses, they are being offered to beer distributors first (I think all of them are "little guys") and there is a limit of 5 licenses per entity in the state so Wegman's won't be positioning themselves to buy up all the licenses, probably because they read the bill.

You'll just have to believe me when I say it won't take anywhere near $2million to stock a store, that would be over 100,000 units or 2100 linear feet of cases stacked 5 high at the minimum.

Posted by: Albert Brooks at May 2, 2013 12:23 PM

Well Albert Brooks you may be correct but I don't think so. First I have two close friends who own beer distributorships in PA. One in Willow grove who has a small store and his beer inventory is clocked in at about 350K. The other guy is in Delco, larger store and he maintains about 750k in inventory. And that's just cheep beer, try stocking a case of Stoli or Johnny Blue.

Secondly I was told by the guy in Willow Grove the distributors are to be offered a wine sales license to go with their beer but NOT liquor. They will sell beer and wine only and liquor stores will sell liquor only.

As far as a limit of 5 licences per entity as a deep poceted businessman I could get around that in a heartbeat, couldn't you? Again I have 5, my wife has 5, my seven cousins each have 5...etc. Wegmans could set up 50 LLC's to handle licences at the push of a computer key, and would because there's billions to be made over time.

As far as I can tell the only truely fair way would be a lottery for the licences and eliminating their resale for a period of time. Since PA has been a monopoly in this for so long it can be quite tricky to "go capitalist".

I don't have the answers but I can't ignor the problems nor believe the stste could do anything like tis corruption-free. It's their nature like the scorpion.

Posted by: Hoagie at May 2, 2013 01:41 PM

I now find myself in the sad position of being wrong, Albert Brooks. Yesterday at my Club, the distributor from Willow Grove made a delivery and sat with me for an hour for a couple beers. He set me straight. What I thought he said is not what he said about new liquor laws.

First, I was wrong. The beer distributors (1,200 of them state wide ) will each get a liquor sales license, and wine sales also.

Second, companies like Wegmans will be able to sell beer ( except for kegs ) and wine, but no liquor.

Third, after the newley issued 1,200 licenses to the beer distributors, my friend does not know how many "new" licenses for liquor will be issued or how they will be issued.

The State of PA will still control liquor sales but on a wholesale level only, ie all liquor will be bought through the State at a 18-25% wholesale to retail discount. ( Which I must say is not a very attractive profit margine especially with so much retail competition).

I'm sorry for my earlier misstatements and I hope this helps. Guess that's what happens when one runs off at the mouth without fully understanding what he's talking about.

P.S. I was right about one thing. My friend estimates that to carry liquor he will need to triple his store space and need about $700,000 in additional inventory.

Posted by: Hoagie at May 4, 2013 09:31 AM

The Colossus of Rhodey: Private liquor sales in Pennsylvania to spell "Doom"

Posted by: mac 318 retractable lip brush for foundation eyeshadow eyeliner makeup brushes single wholesale at March 21, 2017 08:59 AM

Post a comment

Remember personal info?