Last week, Canal's Discount Liquor Mart, a liquor store in New Jersey located near the Pennsylvania border, reopened after several days of self-enforced closure.
The store's owner had closed its doors because, like many New Jersey liquor stores along the state border, it had been flooded with customers in what Paul Santelle, executive director of the New Jersey Liquor Store Association, described to NJ.com as "a panic, a tsunami of business."
The crush of customers, which the store's owner said reached more than 120 percent of the store's usual weekend capacity, didn't come from inside the state. Instead, it came from Pennsylvania, which closed all of its liquor stores on March 16.
Pennsylvania, a "control state" in which every liquor store is operated by the state, has some of the most onerous rules governing alcohol sales in the nation.
The state's response during the COVID-19 pandemic provides both an unfortunate reminder of the folly of giving the state government a near-monopoly over liquor sales—and an object lesson in how the closure of businesses in the name of public health can backfire.
The shuttering of Pennsylvania's state-run stores meant that for weeks, it was nearly impossible to buy liquor legally within state borders. Only in-state distilleries licensed for direct consumer sales were able to sell spirits.
"By closing all the stores, what they are doing is forcing a lot of people to simply go out of state," says David Ozgo, the Senior Vice President of Economic & Strategic Analysis for DISCUS, the Distilled Spirits Council of the United States. Ozgo notes that while other states also own and operate liquor stores, Pennsylvania is "the only state in the country that has taken this extreme measure."
That didn't just make it harder for Pennsylvanians to buy liquor. It also made it unusually dangerous, as the experience of liquor retailers across the border in New Jersey shows. As Matt Dogali, the president and CEO of the American Distilled Spirits Alliance, told me, "It's counter to [COVID-19–related] containment measures to force people to travel long distances to crowded stores."
Social distancing guidelines encourage people to travel as little as possible and to keep their distance when in the presence of others. That's much harder to do when the only option for purchasing liquor involves crossing a border. At least one county in West Virginia now prohibits the sale of liquor to Pennsylvania residents in order to stem the tide of border-crossing customers.
Pennsylvania's closure of spirits stores sparked a similar effect inside the state, with customers reportedly rushing to state-run stores the day before they closed, resulting in record sales.
Perhaps unsurprisingly, the stores were not ready for the deluge. "We are depleted to a level we have never experienced before," a liquor board spokesperson told PennLive.com in March, "because we were unable to plan for this rush of business."
So the rushed state shutdown of liquor stores didn't just inconvenience residents—it repeatedly created situations of presumably unsafe crowding. It is reasonable to assume that the move negatively impacted public health in Pennsylvania, the opposite of the intended effect.
Last week, the state announced that it would allow some sales through its online portal. But the state-run website crashed almost immediately after opening, then stopped taking orders, citing "overwhelming demand."
The state's liquor control board subsequently announced a plan to reopen the online sales portal in a limited capacity, with a smaller selection of wines and spirits available and a limit of six bottles per transaction and one order per customer per day. However, as of Monday afternoon, the site was still displaying a message indicating that the store was "not available at this time."
There are other concerns as well: In the weeks after closure, liquor suppliers in the state were losing $10 million–$12 million per week, according to Ozgo. That likely translates into millions in lost revenue for the state. Reopening online sales may reduce the economic impact somewhat, but the effects are still likely to be significant.
Other control states haven't taken the same drastic measures as Pennsylvania. Alabama, for example, closed its liquor stores but is allowing curbside pickup—albeit with strict limits on purchase quantities. Virginia, on the other hand, recently announced a plan to bypass state-run stores and let distilleries ship directly to consumers, a practice that's normally prohibited in the state.
These measures are ostensibly designed to protect both customers and employees. But state control of liquor sales isn't necessary for such precautions to be implemented effectively.
Where I live in Washington, D.C., the many privately owned liquor stores have been able to continue operating after they were dubbed "essential businesses" by the city. These stores have taken elevated health risks seriously while continuing to serve customers.
In recent weeks, I've seen area liquor store employees wearing surgical gloves and medical masks to protect from infection. Drizly, an online alcohol delivery service that partners with local retailers, makes it possible to get bottles delivered directly to your home from many local liquor stores, without the multiple interactions that in-store transactions sometimes require. Unlike many states, Washington, D.C., also allows residents to purchase and ship liquor from out of state through online outlets such as Caskers.
And late last month, I received an email from Sherry's Wine & Spirits, one of the city's best liquor stores. The message asked that customers choose delivery or curbside pickup if at all possible, outlined a variety of enhanced sanitization procedures that were being implemented, and urged buyers to switch to contactless payment methods. The note raised the possibility of ending in-store sales but indicated that pickup and delivery options were expected to remain.
Stores like Sherry's, in other words, are figuring out ways to both stay open for business and stay safe. Pennsylvania, in contrast, by completely shutting down its state-owned liquor stores, has somehow managed to accomplish neither.