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Monday, April 7, 2008

PA State Liquor Stores Must Go!

Vacationing in Florida, it seems fitting to rain Freindly Fire on the one of the most pressing issues of the day. This being the Sunshine State, that might be hanging chads, the never-ending debate about the Cuban embargo, or the disenfranchisement of the state's Democratic voters. But after surveying the scene, it is time to shed light on the issue that trumps them all.

Liquor.

Sometimes you have to walk out your door to realize that, in some cases, the grass is greener. For Pennsylvanians, it is far too easy to get lulled into complacency regarding how alcohol is purchased. A quick primer is in order for the uninitiated:

Pennsylvania is the largest purchaser of booze in the entire world. The state government, through the Liquor Control Board (LCB), controls the purchase, distribution and sale of all wine and liquor. You might think that with such immense purchasing clout, its citizens would have the best selection in the country, and enjoy the best pricing. But since it's Pennsylvania, keep dreaming.

Interestingly, the LCB is charged with two distinct, and inherently contradictory, roles.
It is responsible for raising revenue through the sale of wine and liquor while controlling its sale. By definition, if the LCB succeeds at one, it fails at the other.

Every bottle of liquor bought in the state comes with an added bonus: an 18% "temporary" tax, which is in addition to the 6% sales tax. So a $10 bottle jumps to $11.80 before the sales tax is calculated, culminating in a whopping $12.50. In all fairness, the 18% tax was well intentioned--- it was passed by the legislature to rebuild Johnstown after a devastating flood that destroyed the town.

In 1936.

What's nearly a century of rebuilding? Even Ben Franklin was known to complain about the perpetual construction of I-95.

It's really refreshing when shopping at a Florida grocery store. You remember that you need a bottle of wine for dinner, and simply walk two aisles over to the plethora of vino at your fingertips. Since most other states have the same buyer-friendly system, why can't the sixth largest state in the country do likewise?

It is infinitely more efficient when a private company, responsive to the needs of the free market (instead of bureaucrats), stocks its store with the items people actually want, at a fair market price. It's called the free market, a core principle on which this nation was founded.

Pennsylvania remains stuck in the Dark Ages, but what makes the sin mortal is that it chooses to remain there. It hasn't dawned on the geniuses in Harrisburg that they are losing untold revenue because of their Draconian system. Millions of residents living along the state's 1,000 mile border continually cross state lines to fill their liquor cabinets. (And anytime The People's Republic of New Jersey offers a better alternative, you know you have major problems). At one point, such "criminals" had their cars confiscated by the government if they were caught.

Today's LCB has made substantial progress in its operations and "customer service". Not too long ago, all of its locations were "counter" stores, meaning that customers had to know exactly what they wanted before placing their order with the clerk. Browsing was simply not allowed. The clerk would subsequently disappear into the bowels of the store, only to return five or ten minutes later, more often than not stating that they were "out of stock" and asking for your second choice. Now imagine this scene playing out at Christmas time, with twenty five people in line. It was commonplace.

But that's not all.

Nothing in the store was chilled. No ancillary items such as tonic water were sold. No employees were permitted to offer advice. And no LCB stores accepted credit cards.

And all this because former Governor Gifford Pinchot, who as a young man became violently sick while imbibing in Germany, became bound and determined to make alcohol as difficult as possible to obtain.

But all of the LCB's recent improvements miss the larger point altogether, and amount to being valedictorian of summer school. The whole system has to be scrapped in favor of privatization.

And the sale of beer in not much better. 99% of all beer sales are transacted through beer distributors, with a very small number of local delis selling six-packs. No beer is sold in supermarkets or convenience stores, thanks to the legislature selling out to the big breweries who only want consumers to buys cases. Nothing like sticking it to your customers.

It is the ultimate irony that the Keystone State, birthplace of American democracy and cradle of liberty, willfully continues down the path of state control and government regulation, to the detriment of its twelve million citizens. When will the people demand a change?

I think I need a drink.

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Chris Freind can be reached at CF@TheBulletin.us [1]


Source URL:
http://www.commonwealthfoundation.org/commentary/pa-state-liquor-stores-must-go