Will the Shutdown Debacle Finally Spell the End of Pennsylvania’s Government-Owned Liquor Stores?

Liquor, wine, and beer aren’t necessary grocery items, but you’d never know that watching millions of Pennsylvanians rush the state’s liquor stores on the eve of Governor Wolf’s sudden coronavirus lockdown. Nobody wanted to be trapped in quarantine without a bottle of their favorite libation—and unlike most states, the state government holds the keys to the liquor cabinet.

Pennsylvania is one of just 17 unlucky states where the government has a monopoly on the sale and distribution of alcoholic beverages. The day before the shutdown, the state-owned Fine Wine and Good Spirits chain did nearly $30 million in sales—the highest single-day record in 12 years. But this run on booze shouldn’t come as any surprise. Pennsylvanians who want to consume alcohol are used to planning ahead and jumping through hoops for a cocktail.

Traveling across state lines to purchase alcohol—bootleg- ging, as some might call it—is illegal in Pennsylvania and yet extremely commonplace. A 2010 study showed that nearly a quarter—23.6%—of Pennsylvanians’ wine purchases were made out-of-state. And a 2011 survey found that 45% of residents in Philadelphia and the surrounding area sought out better liquor prices beyond state borders. The estimated sales and tax revenue lost from this border bleed in south- eastern Pennsylvania alone amounts to $220 million.

Unsurprisingly, the bootlegging problem got worse once the governor closed all liquor stores. Pennsylvanians traveled in droves to neighboring states like West Virginia, Delaware, and Ohio, all places where residents could still purchase alcohol. No one knows how much these states made off the out-of-towners before they started screening out Pennsylvania customers as a way to discourage nonessential travel during the global pandemic.

Loath to sacrifice state revenue, the Pennsylvania Liquor Control Board (PLCB) has attempted to offer online sales and curbside pickup at select locations to lure back some customers, but the incompetence of these attempts has been a comedy of errors. The PLCB website crashed numerous times and was eventually forced to use a lottery to allocate access to purchases. The upshot? Unless you’re willing to hack your browser and virtually cut in line, you’re likely to get a “We’re Sorry…” error message.

Again, nobody is arguing that booze is necessary to sur- vival, but making sure taxpayers get their money’s worthis necessary to public trust in our state government. The lack of adequate service is outrageous, given the fact that the PLCB exists as a form of taxation—raking in nearly $3 billion in yearly revenue thanks to its monopoly. Despite its privileged market position, however, the PLCB remains $1 billion in the red.

The pandemic has provided us with proof—Pennsylvania’s liquor market is in dire need of privatization and has been for decades. Along with streamlined service, privatization will increase sales tax revenue and eliminate the administrative cost of the PLCB.

Luckily, privatization could be just around the corner. New, post-coronavirus polling shows that 70% of Pennsylvania voters are demanding privately-owned stores, and a new legislative reform has been proposed by Rep. Timothy O’Neal (R-Washington). House Bill 2547 will privatize all liquor stores in Pennsylvania and end the PLCB, as was proposed in the 2015 plan that was vetoed by Wolf. The compromise following that legislation legalized beer and wine sales in grocery stores—now Rep. O’Neal’s bill will finish the job and end Pennsylvania’s outdated regulations on liquor.

Other states have achieved phenomenal results by similar means. When Washington introduced competition into its adult beverage market in 2012, for example, the results were favorable for consumers. Store access improved, and consumers were more satisfied with service and prices. Residents of the Keystone State deserve those same benefits.

The PLCB is a dinosaur compared to the private sector— and the coronavirus shutdown hit it like a meteor. The crisis showed America that no state should suffer under Prohibition-era liquor policies. Lawmakers should pass House Bill 2547 and rehabilitate Pennsylvania’s reputation by shattering the state’s monopoly and letting entrepreneurs thrive.