Facts Contradict Claims of Liquor Monopoly Supporters

MAY 16, 2013 | by NATHAN BENEFIELD, BOB DICK

I've received some email responses critical of my recent commentary on liquor privatization. These responses, unfortunately, echo many of faulty claims served up by supporters of the government liquor monopoly.

To ensure others are not misled, here are some facts and myths about liquor sales, prices, and PLCB operations.

Myth: Prices are lower in state stores.

Reality: Prices are not lower in Pennsylvania. You can see our prices analysis here. The PLCB also performed a price comparison showing higher prices for wine in Pennsylvania. And a recent study in Addiction finds that prices in license states are consistently lower than in control states.

Myth: Shoppers are flocking to Pennsylvania to use our state liquor stores.

Reality: Quite the opposite is true. The PLCB's own analysis finds that 45 percent of residents in the Philadelphia area cross state lines to buy wine and liquor, costing Pennsylvania hundreds of millions each year in sales and tax revenue due to border bleed. Studies by the Wine and Spirits Wholesalers, Distilled Spirits Council, and Pennsylvania Food Merchants Association also show Pennsylvania a loser as residents are buying wine and spirits in other states.

Myth: State liquor stores are great, and everyone loves them.

Reality: Support for privatization is actually highest among those who regularly visit the state stores. An astonishing 77 percent of weekly shoppers support privatization.

Myth: Because of its wholesale monopoly, the PLCB is the largest buyer of liquor and can drive prices down through tough negotiations.

Reality: The PLCB is not among the largest buyers of liquor. It is a fraction of the size of the largest wholesalers in the U.S. Under wholesale privatization, the wholesaler that secures the license for a particular brand is the wholesaler of that brand for the entire state. The myth that the PLCB's wholesale monopoly gives it greater buying power to reduce prices is simply erroneous.



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