Alcohol

Opponents of Private Liquor Sales Claim State Monopolies Serve Customers Better

Pennsylvania's governor and his allies say privatization would raise prices and reduce selection.

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Office of the Governor

Last week Pennsylvania's  governor vetoed a bill that would have abolished the Keystone State's liquor monopoly, saying privatization would raise prices and reduce selection. In my latest Forbes column, I examine his twisted logic:

Growing up in Pennsylvania, I became accustomed to a system for distributing alcoholic beverages that struck people from most other states as bizarre. Beer could be purchased only from bars, restaurants, or, if you were willing to buy a case at a time, state-approved distributors. Wine and distilled spirits were available only from drab state-run outlets with inconvenient hours, limited options, indifferent service, and prices higher than those charged by private liquor stores in neighboring states. I was therefore surprised to read Pennsylvania Gov. Tom Wolf's explanation of his decision to veto a bill that would have privatized the liquor business in his state. According to Wolf, the current system is better for consumers.

Read the whole thing.

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  1. Best. Friday Funnies. Ever.

    Wolf represents Air Force One buzzing NYC for publicity shots, and the flag behind him represents Mitt Romney’s 47% gaffe. The bookcase is Cash 4 Clunkers.

    1. Um, what?

      1. You’re right. I guess it’s more of a fireplace mantel and it denotes Obama firing Shirley Sherrod.

    2. It’s less realistically drawn than usual

      1. It’s actually the dictionary illustration for Backpfeifengesicht.

    3. NEEDZ MOAR CRYING STATUE OF LIBERTEEZ!!!!!

  2. If this works so well why not a state store for meat,veggies,fish,and ,wait for it,toliet paper.

    1. A State store for toilet paper? Yes, you would be waiting for it!

      1. You have to pay in crude oil though.

    2. If we only had an example of this type of system to demonstrate how well it would work.

      Well, there’s Venezuela, but they just don’t have the right Top Men.

      /derp.

      1. There’s Alpha Complex.

        Remember, happiness is mandatory, citizen.

        /Friend Computer

        1. CMT!

          /fires happily

  3. But Wolf’s explanation of his decision was audaciously counterintuitive. “During consideration of this legislation,” he said, “it became abundantly clear that this plan would result in higher prices for consumers. In the most recent case of another state that pursued the outright privatization of liquor sales, consumers saw higher prices and less selection.”

    Wolf knows this is completely false, but he’s banking (rightly so) that most journalists won’t call him on it. It’s the unions to which he’s beholden that’s behind the veto. It’s not much of a secret that he will every time back them over the interests of the commonwealth. He’s definitely going to cost the average Pennsylvanian more while driving businesses away. Why people voted him in is beyond me.

    1. Your thrid! Paying union wages to stock shelves and ring a register and retire early is so fair Do you hate idiots?

    2. It is this bit about the journalists that I find so fascinating. Since the 91 Clinton campaign they have increasingly abdicated their fourth estate role. In the post-Watergate era the greatest achievement a writer could have was bringing down a corrupt politician.

      Now they are mostly team players who won’t even ask the most glaringly obvious questions.

      1. The overwhelming majority of the media has been pro big government liberal socialist for at least a century.

        If Nixon had been a democrat, they would have tried to cover up Watergate the same exact way they initially tried to cover up Monica Lewinsky and failed thanks to Matt Drudge.

        The only real change is that they understand that they’re not fooling anyone anymore, and so they’ve dropped all their remaining pretenses of honesty, balance, and fairness.

      2. “In the post-Watergate era the greatest achievement a writer could have was bringing down a corrupt politician.”

        A corrupt REPUBLICAN.

    3. Plus there’s the fact that if private sales ARE allowed, the state will STILL be beholden to the unions and will likely jack up liquor taxes and possibly liquor industry labor regulation, thus raising prices.

      1. that’s exactly what happened in Washington state, when we privatize liquor sales a few years ago.

    4. Wolf knows this is completely false

      Actually, it’s probably true, just not for economic reasons.

      The state isn’t going to give up the profits from liquor sales, so they are likely going to jack up licensing fees and taxes so that they break even. Add that on top of the profit the private business wants to make, and liquor gets more expensive.

  4. Deja Vu all over again.

    Didn’t we have this story before?

    1. We did and last time I posted this story as a real world counter to it:

      http://www.startribune.com/tot…..tfeature=S

      Consumers are the beneficiaries. Ian Madison, of Eden Prairie, still shops his city’s municipal store for convenience, but he said local consumers have overpaid for alcohol for too long. “I pay $55 for a bottle of Veuve Clicquot [champagne] at most stores, but Total has it for $37,” he said of the Bloomington store.

  5. Deja Vu all over again.

    Didn’t we have this story before?

    1. What was transacted by your persona, I viewed it…

    2. Stop being uncivil, else you will be whipped.

  6. They know what’s best for us. Comply with their edict !!

    1. Which Edict? Nantes? Fontainebleau? Nikaea?

      1. Anthony Weiner’s e-dick?

  7. I believe the logic is that the Commonwealth’s monopsony power enables it to strike favorable deals on liquor.

    If that’s true, then it should also have the effect of dissuading distributors from bothering with Pennsylvania.

    It ends up not mattering if it’s true since that’s just a bullshit excuse for keeping the gravy train rolling to the public sector employees.

  8. Wish they’d stop using that picture. Makes me think I forgot to wipe my ass.

    1. Did you recently visit Venezuela?

      1. Yeah, why? *carefully rinses wife’s toothbrush*

  9. Didn’t reason publish basically this same article 2-3 days ago?

    Clearly this is further proof that private institutions reduce customer choice.

    1. Yes, they did. But I take it this article is an update. I think the governor took some flak and/or ridicule (rightly so) for his statement that competition leads to higher prices. Instead of backing away from his earlier claim, he’s now doubling down on stupid.

      I think politicians are increasingly banking on the assumption that nearly all of the public and even most of the journalists have almost zero understanding of basic economic principles. It’s getting to the point where someone will say something like, “Inflation means falling prices and consumers saving money,” and NO ONE will question it.

  10. Going to the Forbes article and seeing that their daily quote, “Nearly all men can stand adversity, but if you want to test a man’s character, give him power” was by Abraham Freakin Lincoln just blew my mind.

    1. Saw that and thought, “Abe, you failed that test big time”. I need words of wisdom from Lincoln like I need a hole in my head…

      1. Too soon!

      2. Other than that…

  11. I have a simple solution that will make everybody happy (I should be in politics): let the great state of PA keep it’s government stores with it’s union employees selling a great variety of booze at low prices to its customers — no problem. BUT, ALSO allow the private sector to do anything it wants, i.e. sell booze on Sunday, sell gin at CVS, sell beer by the bottle or case or keg in the same retail outlets.

    After 5 yrs of this — surely the governor would enjoy pointing at the crowded gov’t stores and comparing them to all the private ones where there are no customers and the proprietors are going broke.

  12. Koch Brothers are funded by the liquor industry. Monsanto, too.

    1. +1 How The Kennedy’s Got Their Start

  13. Pennsylvania’s governor and his allies say privatization would raise prices and reduce selection.

    Fuck this guy. Is Total Wine not in PA? They have the largest selection of wine AND beer that I have ever seen. (and a decent cigar selection). Private enterprise thrives on providing what customers want, government enterprise thrives on force. It’s only 8:30, but I could use a drink.

    1. You just think people know what they want. It’s “false consciousness”. Even in sarcasm, that is hard to say. Yet this idiocy has lasted for generations.

    2. Total Wine is not in PA. They do have a store just over the DE border, which is very popular with Pennsylvanians in the neighboring counties, especially for large events.

    3. Total Wine in MN has the shitiest beer selection around. I’ve found that independent neighborhood shops seem to have the widest selection. Total Wine is better than the municipal stores though. I don’t know how those stores stay in business.

  14. It’s a moral issue. Privatization will result in profits going to rich people, and that’s immoral. That’s why everything should be run by government. It doesn’t waste money on profits to rich people. Duh. Everyone knows this.

  15. Let’s not forget that the previous governor, Republican Tom Corbett, tried to get liquor privatized and failed to do so, even with Republican control of both House and Senate. Both parties in Penna. are beholden to strong union pressure, witness the failure to reign in out of control pension plans. Penna. perfectly represents the GOP failure to walk the talk of limited government and lower spending.

    1. perfectly represents the GOP failure to walk the talk of limited government and lower spending.

      Aw, come on! Republicans are the party of limited government and lower spending, as long as limiting government and lowering spending doesn’t result in someone losing their job or their entitlement check!

    2. Corbett and the legislature did not get along. The state senate sued him for line item vetoes Corbett said were necessary to balance the budget.

  16. NEEDZ MOAR FRIDAY FUNNEEZZ

    Happy fucking Friday, Reasonoids.

    Fuck you, Reason, for not having the FF up before I have to go to the startup mtg.

    Fuck the rest of you for no particular and every reason. Speaking of which, for a magazine called “REASON”….

    Gabby Giffords’ health was better when Virginia Postrel ran things…..YEAH, I SAID IT.

    1. Fuck you too, Almanian! And have a wonderful day.

    2. No FF today, no Judge Nap yesterday. What the duck is going on around here?

      1. Fuck auto correct.

  17. PS, in case Moaring Lynx never appear:

    *SLAP!*

    1. *slap!*

  18. NH has state liquor stores that actually have quite decent prices (lower than any surrounding states) and selection. There have been a few private stores for a while too. And their prices and selection are even better.

    1. Due to my travels since retirement, I’m slowly learning how booze is done in different places. 1.75L of Sapphire gin here in FL is about $33 but I paid $45 for it in NY. Ouch. On my last trip, I paid $60 for 1.75L of Makers Mark, plus tax! That was in Kentucky, in a recently dry county. As far as easy access, Louisiana knows how to sell liquor.

  19. Hey, the people of Pennsylvania should consider themselves lucky – here in Virginia, not only does the state control liquor sales, the ABC also has a half-assed police force that goes around beating up college students.

  20. “Opponents of Private Liquor Sales Claim State Monopolies Serve Customers Better”

    Great than you should have no problem opening yourself up to private competition since you do a better job anyway. Right? Right?

  21. If liquor is sold my a state monopoly, that means the employees who work for the monopoly are government employees, right?

    And they’re probably unionized?

    Yeah, the legitimate purpose of government is to protect our right to make choices for ourselves.

    The real purpose of government is to protect government employees from the American people.

  22. “Approximately 98% of the positions filled in the PLCB [Pennsylvania Liquor Control Board] are Civil Service which means a Civil Service examination must be passed in order to be employed by our agency. Pennsylvania residency is required for most jobs in the PLCB.”

    http://www.lcb.state.pa.us/PLC…../index.htm

    There is no way a politician in Pennsylvania is going to let thousands government employee union liquor store jobs disappear.

    Those are thousands of liquor store clerks who are getting outrageous salaries and full government benefits–with pensions, etc.

    Everyone imagines that the unions are overseen by and work for our elected politicians, but that is complete bullcrap. The politicians work for the unions, and the taxpayers do, too.

    1. The legislator passed it, so there were quite a few politicians willing to let those jobs disappear.

    2. I worked there briefly about twenty years ago, when I needed a nights and weekend job while my kids were young. The civil service test was a joke. The manager at the store where I was assigned said he had never seen such a high score. I just laughed. He also used to get peeved that my cash drawer was never off. I finally got so bored I found another job.
      The people who had worked there for years were making $16.00/hour for working about 1-2 hours a day and standing around reading the paper for the rest of the time, waiting for a stray customer to wander in. The LCB offered wine classes so they could be more informed to help the customers, but they were voluntary, and the only people who took them were the managers. At one store near me, the lighting is horrible, and the staff only slightly less so. They are disinterested and sometimes outright rude. But they ARE protecting me from myself, so I guess I should be thankful.
      Don’t get me started on the Johnstown Flood Tax.

  23. It’s is almost as bad here in Michigan, but the cronyism is better hidden — there are no state liquor stores, but all liquor sales are controlled by the liquor control commission which sets minimum prices. Prices that look to be generally a bit *higher* than in PA:

    http://www.athensnews.com/news…..9c7ab.html

    They’re really quite the bunch of f**kheads:

    https://www.mackinac.org/20927

    1. I stopped off to rest and gas up in a town in Michigan on a recent trip. While I sat and looked around a sign right in front of me warned of people who buy cigarettes for minors can go to prison.

      I almost choked on my water reading that.

  24. Well, the same arguments here in favor of privatization based upon facts apply to defense and security.

    Socialism isn’t magically efficient, nor is central planning and “top men” more effective when it applies to certain areas folks are afraid to be free in.

  25. Only a Democrat would argue that competition will raise prices. In spite of the vast documentation of the past 239 years as to the benefits of a true free market system, Democrats cling to their dream of government control of everything. In Texas all liquor is sold in private stores. The state only oversees the taxation, how and where it is sold. Individual cities and counties are permitted to allow or not allow the sale of beer, wine and liquor. The prices are very low in comparison to the prices I have seen when visiting other states. Just a big government Dem wanting to maintain his big government.

    1. They are lower. The Fraser Institute in Canada did a study comparing private vs. commie prices and the latter offered better both prices and selection. Duh.

      One straightforward reason why is most liquor commissions are unionized. Right there the argument that they offer better prices is blown to bits. Here in Quebec a SAQ workers can make up to $25/hr.

      $25! For telling me if something is good with chicken.

      Last, the argument that they can offer better choice and selection is ridiculous by simple observation. Yes, as Zeb pointed above, the NH liquor store offers a nice selection just like the SAQ here (how to determine that anyway? To an occasional drinker it may be satisfactory, to a serious drinker maybe not). It’s probably the most efficient government agency in terms of getting as close to market tastes as possible.

      But, a series of entrepreneurs opening their own shops bring in their own private collection that the boards may overlook. You literally can go into one shop and see one set of say, California wines, and walk into another across the street and see a whole different set. The decision to bring in certain brands is determined by a combination of what the the seller may like and what the market demands.That’s the market and that’s something liquor boards will never master as an art.

      1. Did you mean the former in your second sentence?

        1. Yes former. Thanks!

    2. He is not just a Democrat, but also a businessman. I think his company makes cabinets or blinds or something. Part of his claim to the governor’s throne was that he would bring “business sense” to PA.

  26. My friend owns a beer distributor in PA. I was trying to convince him that this was a great thing for him. Existing distributors would have gotten a year where they would be the only ones that could get a license to sell liquor. He could have one year in which to completely corner the market on more specialized beer, wine, and liquor. There would have been pretty much zero competition in his area. Yeah, he isn’t going to compete with Walmart on the mass-produced stuff, but there is definitely a market for small batch liquor, good wine, and craft beer, and it could have basically been his. But apparently he just didn’t want the extra work.

  27. When the Democrat Wolf says consumers, he means consumers of other people’s money–politicians, jackbooted minions with guns and their patronage parasites. You have to understand the language these people use then they try to frame thoughts.

  28. Another example that Peak Derp is a myth.

  29. Democrats lining their pockets with the peoples moeny… I hope the push to get rid of the State Stores in North Carolina wins out…

  30. I am glad that I no longer live in that backward state, of course I now live in the backward state of Orefon, sigh!

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