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tag:blogger.com,1999:blog-5918812132650913462016-06-28T23:29:56.188-04:00Why The PLCB Should Be AbolishedReasons why the Pennsylvania Liquor Control Board should be abolished, and The Almighty Liquor Code completely overhauled and rewritten, to reflect over 80 years of change since Repeal.Lew Brysonhttp://email@example.com:blogger.com,1999:blog-591881213265091346.post-18826969423152421672016-06-28T22:24:00.002-04:002016-06-28T22:24:09.923-04:00The Most Important Letters at the PLCB Are Not "U" or "I"The most important letters at the PLCB are C...Y...A. That's right; the agency runs on Cover Your Ass. Have a look.

In the Winter/Spring issue of the PLCB propaganda magazine "Taste," they had, on the cover, featured a drink called the Aviation, which requires creme de violette. It is a crucial ingredient in the cocktail, a necessity. But the PLCB didn't sell creme de violette at the time, except as a "special liquor order" (the aptly-named SLO) with a minimum order of six bottles. It sure seemed like they were telling anybody who wanted to make the drink featured on the cover of their own magazine -- who didn't want to spend $100 on a six-bottle SLO -- to go out of state to buy the proper ingredients. Of course, after having that pointed out, the PLCB approved creme de violette 2 months later. I'm not sure if it is really on the shelf yet, and how long will it be before they decide it isn't meeting their Five Year Plan of Sales and de-list it...again?

This isn't the first time the PLCB has put drinks in their rag that you can't make if you're stuck shopping at the State Stores, and I'm sure it won't be the last, either. ..again.

Get it while you can...or go out of state...again

Of course the most famous incident of CYA in the PLCB was when they tried to hide the whole wine kiosk fiasco as documented here. Nothing like trying to destroy evidence to inspire confidence in a public organization. Then there was the whole TableLeaf (and others) house brand disaster, and again, somehow all the paperwork on who instituted the idea, who initially approved it and why - all of that has disappeared.

We can go back to the big Oracle upgrade that went more than 200% over budget ($25.8M to $66.6M) because the PLCB couldn't read and understand the contract they signed. The Auditor General had a great time with that one, stating, "This raises questions about the PLCB's ability to adequately contract for information technology solutions." And that wasn't even the first time that was brought up by the AG. That earlier report is no longer on line at the AG website but I have a copy if you want to read it.

In fact, just reading all of the AG audit reports show a history of CYA. Remember the smile training that the husband of a senior PLCB official "won"? While the AG did say it was legal -- barely -- that didn't stop the PLCB from authorizing a second year as if to rub it in. Strangely enough, customer complaints increased.

We're happy to get you anything you want (if that has been authorized by people who know nothing about the liquor industry)!

"Each board member evaluates each license application on its own merits, thoughtfully deliberating over each decision and voting as he deems appropriate," says Elizabeth Brassel, Mistress Of Propaganda PLCB. Except when the Democratic Governor asks the Democratic Chairman to change his vote, like just happened when the Board "Freed The Six-Pack"....in a whole nine stores. That's about 1,416,667 people per "freed" store. I hope they hired extra cashiers.

Lining up for them freed six-packs; thanks, Wolfman!

.

Albert Brookshttps://firstname.lastname@example.com:blogger.com,1999:blog-591881213265091346.post-42898842342818410972016-06-21T20:01:00.003-04:002016-06-21T20:02:26.253-04:00Success and Failure

Quiz time boys and girls! We are going to look at how to do things, and how to do things right. A tale of two (or more) control states. Record your answers and see how you did (some questions have more than one correct answer, but here's a tip: Pennsylvania is never the winning choice).

1.) This control state never had the FBI investigate their senior management in the last 20 years.
Pennsylvania did, and the investigation is ongoing.

2.) This state didn't have have senior management plead guilty to graft
Pennsylvania did.

3.) Pennsylvania spent $4 million (with an out-of-state marketing firm) to rename the State Stores. (Again!)
This state didn't.

4.) This state has people specifically travel to it for great booze prices.
Pennsylvania has people specifically leave it for great booze prices.

5.) This state " aggressively pursues a strategy that provides you with the best possible value."
Pennsylvania? Too lazy to try (and proud of it!).

6.) This state sells a 1.75L bottle of Jack Daniel's regularly for the same price Pennsylvania advertises as a "sale price." (And their sale price is $12 less than Pennsylvania's regular price!)

7.) Pennsylvania has the most liquor border bleed per capita in the U.S.
This state has the most reverse booze border bleed per capita in the U.S.

8.) This state won an award for being innovative in liquor and wine ordering (in control states).
Pennsylvania came in third...over a year later.

9.) Pennsylvania has one liquor store for every 21,000 residents.
This state has 20% more stores per capita.

10.) This state has 2 stores over 20,000 square feet in retail space, and a third that is over 33,000 square feet is being built.
Pennsylvania has one store in the entire state over 15,000 square feet. (And is a much, much larger state, with just under ten times the population of the other state.)

11.) The full time employees of this state generate 3 times the sales of the full time employees of Pennsylvania's State Store System.
The PLCB ended the last fiscal year almost $240 million in the hole.

Did you write down your answers? Let's see how you did!

1.) You could pick any other control state except North Carolina.
2.) Yup, any other control state except North Carolina.
3.) Any other control state.
4.) New Hampshire is famously New England's liquor store of choice.
5.) New Hampshire again.
6.) New Hampshire (as of 6/20/2016 PA regular price is $46.95, sale price $42.95. New Hampshire regular price is $42.99 and their sale price is $34.99. If you buy six, it's almost worth the trip!)
7.) Pennsylvania loses a huge amount of revenue to border bleed, while New Hampshire, with a population of about 12% of the Commonwealth, sells over 250% as much wine and spirits per capita (it ain't consumption, either: they have a slightly lower DUI rate). Over half of New Hampshire Liquor and Wine Outlet customers are from out of state.
8.) New Hampshire: innovative, Pennsylvania: wine kiosks and cost overruns.
9.) New Hampshire (1,350,000 residents / 79 stores) v. Pennsylvania (12.750,000 residents / 605 stores): not even close, New Hampshire wins again!
10.) New Hampshire: getting the picture?
11.) New Hampshire wins again: $647,000,000 in sales with only 305 full time employees = $2,131,000 per employee (right, over 2 million per employee). Pennsylvania? With $2,340,000,000 in sales and a bloated 3,100 full time employees, that's only $755,000 per employee. Sad.

Which state is a success and which is a failure? See, it's not even about Pennsylvania being a control state, it's about Pennsylvania being a lousy control state! If the Pennsylvania State Stores ran as well as the New Hampshire Liquor and Wine Outlets (er...and the taxes were similarly reasonable), this blog would never have started.

When you can't even do wrong right...time to give up. Privatize, because you will never "modernize" to the same level as New Hampshire. (Mostly because by the time the PLCB got there, New Hampshire would be 30 years ahead again.)

Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-76887659437977980322016-06-13T10:04:00.001-04:002016-06-13T10:04:28.487-04:00What happens when you "Free the Market" ?When you don't have a police enforced state monopoly that needs to be "loosened up" for the Democratic convention you have this:

While not a real ad from Total Wine it is the reality of the difference between PA and the freedoms enjoyed by most states. The PLCB is why we can't have this. The PLCB is why we don't have the selection other places enjoy. The PLCB is why we will never have the convenience wanted by the majority of the citizens. Do you really think that being able to buy 4 bottles from a bar (since 95% of the licensed prerequisite places are bars) is the same as having 2400 real liquor stores? And the PLCB is why we will never have the service found in stores that specialize where the owners livelihood depends on the customer coming back not because they have nowhere else they can go but because they want too.

In real stores the customer is king, not the clerks. Privatize.Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-21783182665620533412016-06-07T15:02:00.000-04:002016-06-07T15:02:47.777-04:00The Dam's Breaking!Hot news out of Harrisburg: a bill loosening rules on wine sales has passed both houses of the General Assembly (passed by the Senate back in December; the House Rules Committee brought it up, passed it, and sent it to the floor all this morning, and the House passed it early this afternoon) and is on its way to the Governor's desk. The bill -- a creation of Senator McIlhinney's -- does not eliminate the State Stores or the wholesale monopoly, but it does allow licensees to sell up to four bottles of wine for takeaway, including of course the licensees that are supermarkets and gas stations. The bill passed with bipartisan support in both the committee and the full House (two Democratic Senators voted for it in December).

Stealth bill, zooming under the UFCW radar!

Governor Wolf released a statement on the bill's prognosis:

"Today the House concurred with the Senate on historic liquor modernization legislation that provides greater customer convenience to the people of Pennsylvania. As I have always said, my goal is to modernize the sale of liquor and beer in Pennsylvania to ensure convenience and satisfaction for customers. Once the bill reaches my desk, I will conduct a final review of the legislation to ensure it meets my goals of enhancing the customer experience, increasing much-needed revenue to help balance our budget, and bringing our wine and spirits system into the 21st century."
So...maybe, maybe not, but it's going to be hard for him to veto a bill that passed with significant Democratic support that doesn't actually privatize the State Stores or the wholesale system. What it does do is potentially take a LOT of sales away from the State Stores, and UFCW Local 1776's Wendell W. "President For Life" Young IV knows it. "This is the first step to killing the Pennsylvania Liquor Control Board and the Republicans know it," Young said.

It's a wobbly step, a baby step, and a head-shakingly stupid step that recapitulates the useless mistake of the case law...but it is a step. The State Stores will be in deep crap from competition, and things will get worse, especially as people want more convenience. They're going to be irked that they still have to go to the stinky old State Store to buy liquor; they're going to be irked by the stupid four-bottle rule; and they're going to be angry and confused that they can't buy booze at every supermarket and gas station. And that's what's going to break the dam. Finally. The end may be in sight.

Privatize, don't modernize.

Lew Brysonhttp://email@example.com:blogger.com,1999:blog-591881213265091346.post-60294829639922320752016-06-06T08:30:00.001-04:002016-06-06T14:24:53.835-04:00There are lies, damn lies, and...Governor Wolf
We're still seeing a lot of talk about how Governor Wolf is behind "freeing the six-pack," when honestly, all he did was send a politically opportune letter. Here's how the Governor spun "supporting" what was going to happen anyway into propaganda for the masses, taken directly from the Governor's blog: a closer look at the claims.
I'm hearing a lot about how Pennsylvania "Freed the Six-Pack." What does that mean?
"Last week, following Governor's Wolf's request, the Pennsylvania Liquor Control Board approved nine licenses allowing gas stations to sell beer. These approvals freed the six-pack for certain gas stations with appropriate accommodations that can now to sell six-packs of beer."

Reality - The Board had already approved licenses for places that also sold fuel, which is what let to the current case in front of the State Supreme Court. There was no reason to think the Board wouldn't approve other licenses that met their requirements. In fact, if they didn't, they would likely be taken to court just like when they tried to stop grocery stores from selling beer in "cafes" in 2010.

Why is this such a big deal?
"'Freeing the six-pack' will make the commonwealth more inviting for consumers and businesses by improving customer service and convenience for Pennsylvanians. Here's what Governor Wolf has to say about it."

Reality - With the quota system in place (one R license per 3,000 people per county), those licenses had to come from somewhere. Robbing Peter to pay Paul doesn't change the total access or number of places to buy. While you may be able to buy beer at a couple of gas stations, there are fewer places to have a beer with your meal (unless you really want to have lunch at a gas station "cafe," you poor thing), and any new places that open will be more expensive.

Stop right there! There will be no wine or liquor convenience while I'm Governor!

What exactly happened at the May 25 PLCB public meeting when these licenses were approved?
"At the regularly scheduled May 25 Board meeting, nine license applications from businesses that also sell gasoline were considered, eight of which had been held at prior meetings because they did not achieve the required two votes for either approval or denial. Now that the Board is at its full complement of three members, a number of licensing applications that have been awaiting Board action for months may be considered again.
"After careful consideration of various factors – including Commonwealth Court precedent upholding the granting of liquor licenses to convenience stores and grocery stores with alcohol sales locations separate from fuel sales operations – the Board unanimously voted to approve these nine license applications."

Reality - The PLCB first decided to allow beer sales at a convenience store location that also sells fuel on July 14, 2014, This decision was upheld by the Commonwealth Court on July 31, 2015. By that time, the PLCB had approved more licenses for grocery and convenience stores that also sold fuel on the property.
It was Board Chairman Tim Holden (appointed as chairman by Wolf) who was voting against approval of further licensees when the board was down to just two members (after Joseph E. "Skip" Brion left on Nov, 19, 2015), supposedly because he wanted to see what the State Supreme Court would do with case of the appealed Commonwealth Court decision. However, the Supreme Court didn't agree to take up the case until Feb 18, 2016. That left a three month period between Brion leaving and the Supreme Court agreeing to take up the case where Holden voted against further licenses. Think about it: the 'no' votes could not have been for the reason he stated. Since it only takes two votes by the board for approval, and he had approved other licenses previously for properties that sold fuel — what changed?
May 25th 2016 was the first time the Board had three members since November the previous year. The Governor had sent his letter to the board asking them to "free the six-pack" (which really meant just chaining it up somewhere else), and suddenly Chairman Holden decides he can't wait for the Supreme Court decision, because it may take too long!

Will there be more licenses like this approved?
"Governor Wolf has requested that the PLCB approve similar subsequent applications that otherwise meet PLCB standards. The PLCB Board members have indicated that while each license application is reviewed and evaluated on its own merits, they, too are supportive of additional consumer convenience and growing Pennsylvania commerce."

Reality - "Licenses like this" are the only licenses available; there is nothing special or different about them. Having a gas station buy an "R" or "E" license takes that license away from a bar or restaurant. It doesn't change convenience at all since the number of locations hasn't changed, and it is questionable if it grows employment, since a restaurant usually has more employees than a gas station.

How soon can these businesses start selling beer?
"As soon as each license is administratively finished up and issued to the licensee, that business can start selling beer. This could happen in as little as a day or two following Board approval."

Reality - Or it can take months, like the seven months it took to make the decision on some of these licenses, even after all the administrative work was finished and waiting.

How do additional gas stations get approval for selling beer to go?
"A number of different PLCB license types allow for sales of beer, including restaurant, eating place and distributor licenses. Each license type has different qualifications and grants different license privileges."

Reality - Because of the current system, every license that gets approved for this use is taken out of the pool of licenses that could be available for bars, restaurants, distributors that can effect a downtown revitalization and community growth. I don't hear too much about a convenience store or gas station doing that. This makes it more expensive for small businesses to get a license and thus leads to higher prices needed to pay off the license which means higher prices for you the consumer and possibly a need to sell more alcohol to make up the increased cost. Also, there just aren't that many licenses available right now, and until there are...no more gas station beer.

Conclusion - The Governor didn't free the six-pack, as there was and is no increase in availability. He also didn't do anything to make the system better, as pointed out by Lew Bryson in his excellent piece. He did use this to deflect privatization because people do tend to think of beer, wine, and spirits together, even though that hasn't been the case in this state for over 80 years. The six-pack is not freed, it is just now allowed to be chained to a different owner, still a slave to the absurdity of the PLCB and their "interpretations" and regulations. If the Governor wanted to really free the six-pack, he would be proposing legislation and not interpretation. Do you see that happening? No, and you don't see the Legislature doing anything either.

Abolish the PLCB; rewrite the code!Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-75801273569861298572016-06-01T10:25:00.001-04:002016-06-01T10:25:50.422-04:00How the PLCB Sells the High End: Badly

All throughout the Pennsylvania State Store System there are pockets of unwanted, unsold products that costs thousands of dollars. They aren't sold because some cube rat in Harrisburg estimated the market wrong, they were sent to some place that doesn't have the demographics to support luxury or niche products (or the sales savvy to match them to the appropriate buyers), or most likely the PLCB didn't have a clue on pricing and thought that since they were the only seller that people would pay three times as much to get these collector level bottles.

Case in point: The case of Chateau Ausone 2003 sitting at Store #3625 in Lancaster County, located midway between the sprawling metropolis of Columbia and Lancaster itself. Just across the street from the Sunoco and walking distance from the Dutch Apple Dinner Theater (I'm not making this up). Average housing price is $210,000, about 10% more than the U.S. average. Not the place you would expect to find a $36,000 case of wine. That's right: $3,000 per bottle, plus 6% sales tax. The Amish must be living large.

HEY NOW! LET'S DELIVER THAT WINE TO JAKE NOW ONCE!

While Store #3625 is a "Premium Collection" store, one has to wonder why these bottles aren't in Center City Philadelphia, or someplace in Chester County, or even on-line (where the PLCB usually puts booze it doesn't understand), or at least someplace that they could be stored properly. But they're sitting out in the land of scrapple and shoo-fly pies, getting older.

You might be saying to yourself, "Well, it's expensive, sure, but maybe they got a good deal on that case." Nope, not even close. You can go east across the border and save $1,005 PER BOTTLE! Hell, you could pay someone $500 to go get it for you, and still save money! Or drive into New York and get it yourself: you'll pay even more in taxes, but you'll still save a hefty $1,775 PER BOTTLE. As I reported back in February, the PLCB doesn't even attempt to get the best prices; they sure blew it in this case.

People who buy $3,000 bottles of wine don't generally get to the point where they can buy $3,000 bottles of wine by wasting money at the PLCB. Think about it: for the cost of a nice dinner and a night in the city, you could spend a few hundred extra and get TWO bottles in New York. Or you could visit the Dutch Apple and cap off your day by spending far too much at the State Store for one bottle. The PLCB counts on us being stupid. Stupid enough to keep putting up with this. (Stupid enough to not leave the state and break the law, but that's another story.)

Then there are the eleven bottles of Chateau la Mission Haut Brion Rouge 2010 ($1,197 a pop), sitting at one and one store only in Sewickley. It does look like they managed to sell one, so maybe it is a long term thing...except the PLCB doesn't do long term things. If it doesn't sell, it will go on sale and then go on clearance. Even then it won't be as good a price as the under-$600 per bottle (delivered!) you can find in other states. The PLCB probably won't make a dime on those bottles, but that's okay: they don't have to. Being a state-owned monopoly means never having to make a profit.

So on what do we blame things like this? Overly ambitions (or easily swayed) wine buyers? Untrained sellers? Overpriced products? Why not just wrap it all up and say: the State Store System.

Privatization is the only real Modernization. We deserve it.Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-64610439782928283422016-05-26T16:05:00.000-04:002016-05-26T18:30:16.018-04:00BEER IN GAS STATIONS!!! No, it's not, and Wolf had nothing to do with itEveryone's losing their minds because Pennsylvania gas stations can now sell beer, and Governor Wolf made it happen. We saw headlines like this (exclamations added..):

Pennsylvania Liquor Control Board Approves 6-Pack Sales At Gas Stations!
Pa. Liquor Control Board allows gas stations to sell 6-packs!
Gas and brews: Pennsylvania Liquor Control Board approves beer sales at gas stations!
Pennsylvania Finally Catches Up With The Rest Of America, Legalizes Selling Six-Packs Of Beer At Gas Stations!

No, no, and no. Gas stations near you probably still won't be selling beer (without jumping through ridiculous hoops first) and Governor Wolf had nothing to do with it. It's just one more chunk of pathetic bullshit from Harrisburg, designed to dazzle and placate you and keep your mind off how crappy the booze sales system in this state is. Allow me to explain.

First? This is about nine gas stations in the entire state which bought existing licenses (of various types; that's explained quite well here if you're interested) -- like the supermarkets that are "allowed" to sell beer 12 bottles at a time -- and just wanted to have those licenses approved...because, of course, the Almighty Liquor Code actually "prohibits the sale of liquid fuels or oil by licensees."

Just add beer...sorry, not allowed in Pennsylvania!

So that means that the Board is once again ignoring the law ("The board shall refuse any application for a new license, the transfer of any license to a new location or the extension of any license to cover an additional area where the sale of liquid fuels or oil is conducted"), just like it did last year when it said a 12-pack is a case. ("No distributor or importing distributor shall sell any malt or brewed beverages in quantities of less than a case or original containers containing one hundred twenty-eight ounces or more").

Now, I'm all in favor of ignoring the Almighty Liquor Code myself; I do it all the time by running to NJ for booze. But it's one thing when I do it; it's completely something else when the state regulatory agency in charge of enforcing and interpreting The Almighty Liquor Code is doing it. This kind of arbitrary decision leads to madness and badness.

What kind of badness? Realize this: every time one of these gas stations buys a license, that's a bar license (R license, "deli" license, or a straight-up D distributor license; they're buying whatever they can get their hands on) that's out of circulation for years, not being used as intended. Ordinarily, I'd say, who cares? But this is Pennsylvania, where the number of bar licenses is limited by population: 1 license per 3,000 people per county. Then realize that bar and deli licenses, unlike every other kind of license, can be bought and sold on the open market for whatever the market will bear, and you see that every gas station and supermarket that buys a license makes the price of other licenses higher. And that means fewer start-up bars, more chain restaurants, and more high-end expensive bars...and more bars that are likely to try to sell as much booze as possible to make that monthly payment on the license. Not good. I wrote about that here. What else? Well, how about...the Board can easily play favorites, because they can decide the next batch of applications don't get approved, and they don't have to give any reason, nor are they bound by precedent...because that's how the PLCB works. Every ruling stands on its own. Period.

It would be much better to have a new license for retail beer sales, without the stupid 12-pack restrictions and separate register foolishness, than to continue to do this workaround. But that would require the Legislature to do something, and that would upset the tavern owners AND the beer distributors...even more than this is.

To my pleased surprise, the decision also was not well-received by the Brewers of Pennsylvania, who responded -- correctly!-- that "To truly "free the six-pack" as Governor Wolf requested from the PLCB, then the future call to action must be to allow six-packs to be sold in many more businesses than just gas stations... To truly achieve consumer convenience as well as provide for a variety of purchasing options for consumers, the BOP highly recommends allowing six-pack sales in all channels of trade. Doing so would immediately benefit all small craft beer producers in Pennsylvania..." BOP president Bill Covaleski (of Victory Brewing) told me "the consumer is at the forefront of our thinking. We are headed in the direction of the consumer, we need them to tell us where that is." He noted that "where that is" clearly seemed to be in every grocery store and convenience store. It's refreshing to see that the brewers get what the Legislature doesn't: the consumers should be considered first, not the special interest groups.

Second? Once again, this is about nine gas stations in the entire state. It does NOT mean "gas stations can sell sixpacks." You won't be seeing beer at every Wawa anytime soon, especially not in southeast Pennsylvania, because bar licenses are really freakin' expensive here; like around $400,000 in Montgomery County. So why is everyone so excited? Because Governor Wolf made a big deal about this.

Yay me! I wroted a letter!

Third? What does Governor Wolf have to do with it? Nothing but shameless self-promotion, that's what. Wolf heard that the PLCB was about to vote on these applications, and like everyone else in Harrisburg, he knew the PLCB was likely to say yes. So he sent them a letter asking them to do that as a favor to his friends, the people of Pennsylvania, and then made a big stinking deal out of it when they approved the applications. As a friend of mine said, tomorrow Wolf will send out a press release predicting the sun's gonna rise in the east, and he'll be two for two!

Did anyone know Wolf was a big supporter of "free the six pack"? No, you didn't, because "Free the six pack" was just something Wolf hitched his wagon to the day before the PLCB was going to approve these piddling nine applications. He's an opportunistic fraud.

To recap: not much has changed; Wolf had nothing to do with it; and this is still a terrible way to change things. As I've said for years, the arbitrary nature of the PLCB and the byzantine impenetrability of the Almighty Liquor Code make for an ever-worsening situation here.

So when you don't see beer at your local gas station...remember this, will ya? And tell your legislators to Rewrite The Code, with you in mind, not the unions and the beer distributors and the tavern owners and the convenience stores and Pat Deon. It's the only way we'll ever change this.Lew Brysonhttp://email@example.com:blogger.com,1999:blog-591881213265091346.post-48886443787036301232016-05-26T16:00:00.000-04:002016-05-27T16:40:40.458-04:00Meanwhile, in Saskatchewan...How long has booze privatization been debated and promised in Pennsylvania? Decades.
How much has been done about booze privatization in Pennsylvania? Nothing.

Meanwhile, in Saskatchewan, the Saskatchewan Party campaigned this spring on a platform that included transitioning their provincial monopoly liquor stores to privately-owned stores. They were put in power by the electorate, and now, less than two months later,, they've announced that they will convert 40 of the 75 government liquor outlets to private stores, and create twelve new private stores.

Dear Pennsylvania General Assembly:

Lew Brysonhttp://email@example.com:blogger.com,1999:blog-591881213265091346.post-10978578448866747492016-05-23T08:36:00.000-04:002016-05-23T08:36:10.428-04:00Chuck McIlhinney gives it to us again

Senator Chuck McIlhinney, the current Chairman of the Senate Law and Justice Committee (the Senate committee responsible for liquor laws, among others), again proves that there isn't a law he won't muck up. As far as any "Justice" for the citizens goes, the very idea eludes him.

He has not only sent the "National Event License" bill (HB 1196) out of his committee to the full Senate (which then immediately approved it by a shameful 50-0 vote), he braggingly explained it to reporters like this: "Bring your booze, have it at your party, enjoy yourself responsibly, and then go home." (This ignores the fact that ordinary Pennsylvanians have not been allowed to do that for well over 50 years.) Having proven time after time that he doesn't have the stones to admit that the Pennsylvania liquor monopoly is a joke nationwide, he instead tries to hide the abomination we all have to live and deal with by doing special favors, bending the rules for political reasons.

I live by these words....you should too.

When you start treating those who govern differently than those they govern, there is a problem. It's called entitlement. And it's not so much that he thinks he and his fellow politicians are entitled but that the almost 13 million citizens of the Commonwealth aren't. That we don't deserve to be freed from the idiocy of the PLCB and their little fiefdom of incompetence, but that those who in some way, some how, can or may give him an imaginary pat on the back or "contribution," shouldn't have their party spoiled by the state monopoly's crap booze selection and non-existent licensee service.

Or in his words "....we're not going to put it in our liquor stores for four days and then sell it to them and then have to be stuck with it" Except that if it isn't in the stores now it has to be ordered by SLO, which means that it is at least half paid for already! The PLCB won't be "stuck" with anything since they have half the money already and still can sell the product.  What kind of idiot in charge of PLCB legislation doesn't know how the PLCB works?

If screwing the public out of private liquor and wine sales with his propaganda show-trial "public hearings"* wasn't bad enough, he now thinks that flaunting his incredibly bad decision-making is something the public wants to see and hear about. Is Chuck a tool of anti-privatization? A tool of the beer distributors? A secret tool of the Democrats? Or maybe...just a tool.

We need less unfair Law and a lot more Justice from you and your committee, Senator.

*Which strangely enough, didn't have any members of the actual public involved. No citizens that didn't have interest groups or businesses behind them were invited, and only a token few of those that were in favor of privatization, even though we comprise a majority of the people.

Albert Brookshttps://firstname.lastname@example.com:blogger.com,1999:blog-591881213265091346.post-1581025494028926542016-05-20T12:00:00.000-04:002016-05-20T15:03:31.681-04:00Quick, Clean Up Those Liquor Laws: The Neighbors Are Visiting!5-20-2016: This piece has been updated after a full reading of the bill as released by Sen. McIlhinney's committee and subsequently swiftly approved 50-0 by the Senate. Updates are italicized; deleted words are struck out.

This headline in Tuesday's Inquirer caught my eye this morning:

Pa. May Ease Liquor Rules For Democratic Convention

Here's the piece, describing likely temporary changes in The Almighty Liquor Code for the duration of the Democratic National Convention in Philadelphia later this summer.

Short version: the Legislature feels politicians' pain, but not yours.

"C" is for "Cheat"

Less-short-but-still-short version: Bars can stay open past 2 AM while the convention's in session — four whole days — if they are granted a special license, which costs $5,000, and is only available for events directly related to the convention (What's odd: it's not clear if the event license applies to individual licensees, or the event premises, or wherever the "national event" decides to serve booze). Even more galling: for that time period only, these special licensees will be able to buy receive booze directly from out of state for those four days, unlike you...ever! This is so state delegations can get their favorite hometown booze (Washington State wines, Maine craft spirits), recognizing that (as our old pal, Senator Chuck McIlhinney, who passed the House bill out of committee, put it) "we're not going to put it in our liquor stores for four days and then sell it to them and then have to be stuck with it." Well...probably sounded good to him at the time. What Chuck probably meant to say was that it would be unreasonable to expect the clerks to have to deal with a bunch of interesting new products, so let's arbitrarily bend the law instead. Right, Chuck? That's what you do over in the Law & Justice Committee, after all.

Our version: Someone in the Legislature got a rush of blood to the brain and realized that conventions run on booze -- they do, even the Democrats, and don't even start on the whole weed thing -- and that our booze laws suck so bad that it could hurt future convention business...no, wait, if that was it, they'd make these changes permanent for Philadelphia and Pittsburgh, because that's true for every convention, not just political ones.

No, this is, as usual, about different rules for the ruling class, and charging you to pay for them. Because if you think that the bars who get those special licenses are going to pay for them in four days, or even try to pay them off in four days, you're dreaming. You'll be paying for them. Lucky you. (Okay, what's likely to happen is that some deal will be struck that the licenses are paid for as part of the venue payment, or covered by the donations of free booze.) And if the licensees are smart, they're going to stock up like mad during those four days, get Total Wine to ship in truckloads of booze to beat the PLCB like a gong. There is no limit on how much booze can be brought in, either. In the words of the bill as it stands, the licensees may "ACCEPT, IMPORT, POSSESS OR RESELL
DONATED ALCOHOL ACQUIRED FROM LICENSED AND UNLICENSED ENTITIES SO LONG AS IT RECEIVES BOARD APPROVAL PRIOR TO DOING SO. THE DONATED ALCOHOL DOES NOT NEED TO COME TO REST AT A PENNSYLVANIA LIQUOR STORE PRIOR TO ITS USE BY THE PERMIT HOLDER, UNLESS THE BOARD SO DIRECTS. MALT OR BREWED BEVERAGES DONATED UNDER THIS SECTION SHALL NOT NEED TO COME TO REST AT A LICENSED IMPORTING DISTRIBUTOR PRIOR TO THEIR USE BY THE PERMIT HOLDER, SO LONG AS
THE DONATED BRANDS ARE REGISTERED WITH THE BOARD AND THE BOARD APPROVES THE ARRANGEMENT." Note that this kind of arrangement would be exactly the kind of thing that could normally cause a licensee to be fined, possibly even lose their license.

Is that even how the law would work? Who knows, because McIlhinney had his fingers all over it, so it's likely to be something completely novel that no one asked for or wanted. Would you pay $5,000 for the "right" to be open from 2 AM to 4 AM for four days? For a bunch of drunken strangers? (On the other hand, would you pay $5,000 for the "right" to buy booze from regular wholesalers, rather than the PLCB? Just for the novelty of someone delivering the booze to you for a change? Hey, maybe!)

Leave out the longer hours, which is window-dressing: all they'd have to do to achieve this is to tell the BLCE to stay away from Philadelphia and give the bars the high sign. This is nothing more or less than an admission that the PLCB can't deliver what wholesalers and retailers in other states do routinely: put new products on the shelves (not in some airy-fairy "online store" that no one can search properly) in a timely manner by delivering them directly to bars. An admission that the state's booze monopoly is a failed, broken system that can't do what business needs.

If it needs to be fixed for four days...it needs to be fixed for good. And we know the way to fix it. The Inquirer knows, too. They ran this editorial on May 20: have a look. The House GOP caucus should belatedly redeem themselves by refusing to pass this deeply cynical bill. Failing that, the Governor should veto this unabashed deal-making. And if they don't, we the people should raise hell.

Privatize it. The time is now. Lew Brysonhttp://email@example.com:blogger.com,1999:blog-591881213265091346.post-89325327105046389532016-05-10T08:43:00.001-04:002016-05-10T08:43:39.368-04:00The Madness Just Won't StopSome random thoughts.

A little bit of turmoil at the top of the PLCB financial empire? First August Hehemann was let go on November 10, 2014 after saying the PLCB needed to raise prices to offset the continued growth of expenses...in other words, for telling the truth. His replacement, Oren Bachman, barely makes 15 months and now they are looking for his replacement. Of course, the fiscal year ends in about 50 days, so you have to wonder how long it will take to spin the financials this year with a new guy (or not) there. It took 125 days last year.

One of the better comments about privatizing the PLCB in the past few months: "How seriously can we take the argument that unnecessary government jobs should not be eliminated...because then there will be fewer unnecessary government jobs?"

The PLCB, moving at a speed unheard of in real business, only took 5 years and 10 days to approve a new store in Renovo. Of course, it isn't open yet, and might take who knows how long to actually open, but it made the list. The new store at 167 Seventh St. is a whopping 327 feet from where the old store was at 536 Erie Ave. This beats the old record of taking over a year to move the Mountain Top Store 50 feet. I wonder if the blogs of last year and this year helped move them along, and if it did how many more years would it have taken otherwise? "Convenience is our middle name. PLCB convenience that is, we don't give a crap about the consumer" could be the motto of the state stores.

Crap! I'll never finish modernizing like this!

Canada is again showing how much more progressive they are in some things. A recent court case tossed out provincial restrictions on the purchase and transfer of beer, wine, and liquor from one province to another. It could potentially change the entire Canadian system of trade between the provinces. This is something that Pennsylvania (and U.S. constitutional courts) should look closely at.

Why was it good to have a restaurant or bar license for every 1,000 people in your Grandfather's day, one for every 2,000 people in your Father's day, but not now when it is one for every 3,000 people? What has changed? The PLCB of course, not the citizens' desire to have a drink with their food or to go out. Why is it up to them and not local government to decide what is best for their local citizens?

The PLCB serves no useful purpose in retail, it does not provide better selection, it does not provide better service, and it does not provide the convenience the citizens want. It cannot even be proved definitively that it provides more revenue to the Commonwealth than a competitive private system would. It only provides jobs to the PLCB.

While I wait (and I've been waiting a very long time) for someone to come up with a quote about why a government monopoly on a retail good is something worthwhile, I'll leave you with this:

"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience." - C.S. Lewis

PRIVATIZE.Albert Brookshttps://firstname.lastname@example.com:blogger.com,1999:blog-591881213265091346.post-9171797689473087762016-05-03T12:31:00.001-04:002016-05-03T13:29:07.808-04:00The Past is Prologue: don't forget the wine kiosks"Those who do not learn history are doomed to repeat it."

 We laugh at the idea of the wine kiosks now. That was in the past, and it was crazy, but, we tell ourselves, it's over now, and even the PLCB gets it. That was just that crazy Joe "Da CEO" Conti and his effort to make the PLCB "modern" (and maybe pay off some political cronies).

Except many of the people responsible for the wine kiosks, the bureaucrats, are still in place. Conti's gone, and PJ "PJ" Stapleton is gone, and James "Fall Guy" Short is gone (though still not sentenced...), but the faceless minions at 910 Capital Street are largely still there, still making some great decisions.

Remember those? Going $33+ million over budget for the new computer system, basically because they couldn't read a contract. Storing wine in un-air conditioned trailers in the summer. The keen plan to undercut PA wine producers with out of state house brands. And paying an out of state company about $4 million to come up with the incredibly generic "Fine Wine And Good Spirits." (Considering they were called "Wine and Spirits Shoppes" before, that comes out to about $2 million a word for adding "Fine" and "Good." Great spend, guys.)

Wine Kiosks Redux

Still, the wine kiosks were such a disaster, one that made Pennsylvania a national laughingstock, that it's worth having a full look at just how stupid it all was, and exactly how it happened. First, a summation from House Speaker Mike Turzai, from when the kiosks fell apart, back in September 2011.

Wine Kiosks A Big Mistake From The Beginning
9/20/2011 – Majority Leader Mike Turzai (R-Allegheny) released the following statement regarding the Pennsylvania Liquor Control Board's (PLCB) decision to end the wine kiosk program:
"I don't think it comes as a shock to anyone outside the PLCB's top echelon that the wine kiosk program was a complete failure. The kiosk program was a joke from the very beginning and the PLCB knew it. The agency's own internal evaluation committee recommended against the kiosk idea. Yet the board went through with the cockamamie program anyway.
"This is just another example of why a government agency should not be attempting to mimic private industry. The wine kiosk program resulted in machines that sometimes worked, and sometimes didn't; and it forced consumers to actually blow into a cumbersome machine – no one wants to buy wine that way. Real customer convenience will only come once the sale of wine and spirits is moved to the private sector."

How did it actually happen? How did we wind up with the Incredible Robot Wine Army? We've got it all, right here.

PLCB Wine Kiosk Timeline: (be sure to check the links!)

March 28, 2008 – Public Notice of Wine Kiosk RFP on PLCB and DGS websites; proposals due May 8, 2008. Simple Brands (Simple) is the only applicant.

July 9, 2008 – PLCB RFP Evaluation Committee submits report to PLCB Chief Counsel's Office for inclusion in that day's board meeting. Report advises against contracting with Simple, not a well-founded business plan; failure to get advisory opinion from TTB (federal government) on permissibility of Kiosk program; awards Simple a score of 305 out of 1,000 points for its proposal.

July 9, 2008 – RFP Evaluation Committee advised that the board would not be reviewing the committee's report; committee members told to destroy all copies/documentation relating to the report; and that CEO Joe Conti would meet with them on July 10.

July 9, 2008 – LCB members met and voted to approve Simple Brands proposal.

July 10, 2008 – Conti met with Evaluation Committee members, told them not to speak of the evaluation; to destroy all copies; and their concerns would "be taken care of." (Copies of cover-up RFP and emails)

January 29, 2009 – Effective date for Contract 20080318 between LCB and Simple for 100 wine kiosk vending machines.

June 30, 2009 – Relationship between Simple investors and former Governor Ed Rendell discovered: Investor Herbert Vederman gave Mr. Rendell $346,276, including a $100,000 lump sum in 2002, campaign finance records show. Mr. Vederman also served as the governor's campaign finance chairman. His business partner, Ira Lubert, meanwhile, gave Mr. Rendell $140,980 in that time period.

June 23, 2010 – LCB places two kiosks in Harrisburg area grocery stores: Giant Foods in Dauphin County and Wegman's in Cumberland County.

June 30, 2010 – End of FY 09-10, Profit and Loss statement. Kiosk program showed a net loss of $255,077.

July 9, 2010 – LCB conditionally accepts delivery of two kiosk machines subject to Simple remedying operational problems with the machines (doors failing to open or close, credit card machine failures and general failures with particular transactions).

September 1, 2010 – Second letter sent to Simple giving conditional acceptance of two kiosks provided they remedy operational problems within 60 days of notice.

September 8, 2010 – Contract with Simple amended to include a $1 per transaction fee (collected from the consumer and paid to Simple) and a 50-cent per bottle "advertising fee." The amount to be paid to Simple for advertising was capped at $1.5 million per year. PLCB also warned Simple that it would not accept delivery of additional kiosks (only two were in operation at the time) unless the various problems previously identified by the board were remedied.

October 15, 2010 – LCB announces roll-out of more kiosks throughout the state. According to LCB press release: "We've been testing the Pronto Wine Kiosks at two supermarkets in the Harrisburg area for the past three months," said Board Chairman Patrick J. "PJ" Stapleton. "The kiosks have proven to be safe and reliable and we are looking forward to giving consumers across Pennsylvania the opportunity to do one-stop shopping."

December 21, 2010 – PLCB takes all 29 wine kiosks out of service due to systemic problems. (Note the date: right in the midst of the busiest booze sales of the year.)  LCB Press release: "While customer satisfaction with the six-month old kiosk program remains high, recent problems -- such as product not dispensing -- require us to take immediate action while we wait for the manufacturer to correct all of the identified issues," said Pennsylvania Liquor Control Board Chairman Patrick J. "PJ" Stapleton. "We apologize for any inconvenience this may cause our customers and supermarket partners, but felt this temporary closure was critical to the future success of the program."

December 22, 2010 – Board notifies Simple that the  Kiosks were taken out of service because Simple failed to remedy the various problems with the Kiosks. According to the Board: "While most of the several hundred specific instances were eventually resolved, the recurring nature of the problems confirms that the problems are systemic, rather than isolated." Simple was advised to deliver fully functioning wine kiosks, and a certification that the systemic problems had been rectified by March 14, 2011

December 30, 2010 – PA Auditor General notifies the board of its Wine Kiosk performance audit and advises LCB to preserve and maintain any and all documents and materials (including e-mails) relating to the kiosk project.

February 22, 2011 – Simple hopes to expand to smaller kiosks at convenience stores like Wawa and Sheetz – per letter to the Board.

June 2010 – Wegman's notifies LCB it will terminate its "kiosk" relationship.

June 25, 2011 – Right-To-Know-Law request submitted to LCB by House Majority Leader Turzai requesting a copy of the TTB advisory required by the RFP; all costs associated with Kiosk program and all invoices to, and payments from, Simple pursuant to the contract

June 30, 2011 – End of FY 10-11, Profit and Loss statement. Kiosk program showed a net loss of $843,369 for FY-10-11; Additional losses (not accounted for on prior FY P&L statement) of $24,877. Total net loss for project: $1,123,323.

August 4, 2011 – Response from LCB indicates Simple failed to obtain TTB advice and that no billing had been done up to that point, but LCB was in the process of sending the Profit and Loss statement to Simple for payment.

August 5, 2011 – Board demands payment from Simple.

August 15, 2011 – Walmart advises PLCB it will not participate in the Kiosk program (23 machines were planned for Walmart stores).

August 17, 2011 – PLCB chief Joe Conti indicates the agency will continue the wine kiosks once its litigation is resolved. "This was not a faulty fiscal decision," Conti said.

September 1, 2011 – PA Auditor General issues audit detailing the failed program.

September 16, 2011 – PA Independent reporter Eric Boehm reports, contrary to public comments and direct testimony, PLCB failed to conduct any market research in relation to the kiosk program.

September 20, 2011 – PLCB announces the end of the failed kiosk program; it pulls the plug on remaining machines in several supermarkets.

January 25, 2015 – PLCB legal costs for the "free" kiosks have exceeded $300,000 pushing total losses to $1.5 million, not counting PLCB resources and personnel costs, which have never been accounted for.

So here it is, five years later, and the PLCB insiders and their supporters have made sure that NOBODY has been held responsible, even though there are absolute violations of the PLCB Code of Conduct in that: "No member or employee of the Board shall: use for personal gain or for the gain of others any information obtained as a result of service or employment with the Board, and not available to the public at large."

Having reports destroyed does not make things available to the public at large. Plain and simple.

While the Board may have changed, the entire Directorship are people who were brought up in this system, ingrained with this way of doing things and tacitly approved the entire fiasco by not doing or saying anything. These are the people who are going to "modernize" the PLCB. Do we really need them to do that? Do we need them at all?

Privatize.Albert Brookshttps://firstname.lastname@example.com:blogger.com,1999:blog-591881213265091346.post-21088456592474918172016-04-26T08:30:00.000-04:002016-04-26T08:30:27.019-04:00Vox PopuliNewspapers are the voice of the people, even now, in the age of the Internet. There are left-leaning ones, right-leaning ones, moderate ones, and some that seem to just wander about the center. But in Pennsylvania, right or left, they all seem to be in favor of liquor privatization.

The State Store clerks and their union bosses will tell you that it is because of the advertising dollars that newspapers will get from liquor ads; it's all about the money. But if you look at the Sunday New York Times, in the largest media market in the country, how much liquor advertising do you actually see? Usually under a quarter of a page. How much do they think The Somerset Daily American is going to get in advertising column inches? Makes for good sound bites, though, and helps you forget that for the clerks and the union bosses...it's all about the money.

I wonder how the "liberal media" is somehow controlled by the right on just this one subject, don't you? They know and have known that the people overall want a private liquor system. There has never been a scientific poll showing otherwise, including all the polls the newspapers have done themselves. The first complaints published about the PLCB were shortly after it started, saying there was a lack of selection and convenience. 82 years later, nothing has changed.

So here's the challenge. What newspaper is actually in favor of keeping the state stores? Are there any, besides the Raging Chicken Press? (I'm not making that up and it isn't a print newspaper either.) Perhaps a few union and progressive blogs, but even some of them are in favor.

Here are just some of the newspapers that have come out editorially, some numerous times, for privatization. Where is the list of newspapers against?

Bucks County Courier Times-Intelligencer
Butler Eagle
Express Times (Bethlehem)
Lebanon Daily News
Philadelphia Inquirer
Pittsburgh Post Gazette
Pittsburgh Tribune-Review
Scranton Times Tribune
Somerset Daily American
The Altoona Mirror
The Citizens Voice (Wilkes-Barre)
The Courier Express (DuBois)
The Delaware Daily Times
The Observer Reporter (Washington/Greene Counties)
The Patriot News (Harrisburg)
The Pocono Record
The Pottstown Mercury
The Reading Eagle
The Times Leader (Wilkes-Barre)
The Tribune-Democrat (Johnstown)
Williamsport Sun-Gazette
York Daily Record

All parts of the state, all sizes of towns and cities, all in favor of what the people want. 3,000 clerks should not control the wants of a state of 12.7 million.

Privatize. Make this the year it happens.Albert Brookshttps://firstname.lastname@example.com:blogger.com,1999:blog-591881213265091346.post-19202700027627134462016-04-19T11:53:00.000-04:002016-04-19T11:53:36.028-04:00Numbers, numbers, numbersNumbers you won't see in the PLCB Annual Report

A look at some State Store numbers that are always missing in the PLCB's annual report.

1.) The average amount of non-tax revenue returned to the state per unit (single bottle or box) of wine or liquor - 73 cents

2.) Not counting the actual cost of the item, what PA spends to put one item on the shelf - $3.06

3.) What PA spends to put an item on the shelf, including the average cost of the item - $11.40

4.) What it costs with taxes to put one average item on the shelf - $15.21

5.) Average rental cost per store (2015) - $1432 a week

6.) Industry average profit margin 8.1%; PLCB 2015 profit margin 6%

7.) PLCB Effective markup, not counting any taxes - 45.36%

8.) U.S. state and federal government workers average benefits as percentage of salary - 36.4%.
PLCB benefits as percentage of salary - 85-104% (as stated by Board members during the Appropriations hearings in the Senate).

9.) Percent of sales actually checked for proof of age - under 2%

10.) Retail Wine Specialists as a percentage of workers: 1.7%

11.) Retail Wine Specialist as a percentage of TotalWine employees - ~20%

The Proof

1. - $80M returned to General Fund plus $25M for BLCE plus $5M alcohol Awareness plus $1.7M for Drug & Alcohol programs divided by 153.5 million unit sales We are told "Modernization" will increase profits by $180M At 73 cents a bottle...well, you do the math. (Keep in mind that the $80 million is a very flexible number, mostly representing what the Legislature requires from the PLCB, whether it's actually "profit" or not.)
2. - Operating Expenses (minus the cost of wine and spirits) of $470M, divided by units sold. The lower this number, the more efficient the organization is. It has never gone down for the PLCB.
3. - Operating Expenses $1.751B divided by units sold 153.5M. Since the PLCB doesn't negotiate prices on the majority of items, this cost is higher than it should be too.
4, - Gross sales ($2,335B) divided by total units sold. $3.81 for every bottle or box sold is the average sales and Johnstown Flood Tax; more expensive bottles can be much more.
5. - Rental expense for all operating leases $44.9M divided by 603 stores. Of course, this cost will increase as the PLCB tries to move into higher traffic areas.
6. - IBISWorld, May 2013, Operating Income divided by Sales Net of Taxes. With increased pension costs, workers comp, salary, and benefits increasing, this won't improve any time soon.
7. - COGS divided by gross profit. The 30% markup you hear about is only one of the many fees and adjustments made to the price. This fat markup of 45.36% still wasn't going to be enough to cover increasing operating costs, according to August Hehemann, the PLCB's Director of Finance, who last year advised the Board to raise it 5% more. The Board, for once in tune to the politics of privatization, decided against that.
8. - US Dept Of Labor - Bureau of Labor Statistics, 2016 PA Senate Appropriations hearing. Nice gig if you can get it, but does it provide any benefit to the consumer?
9. - 1.3M cardings divided by 65.5M transactions You have slightly better than 98% chance of not being carded (that's a 0.0% chance at private stores like Wegmans), and since the State Stores are never checked by police for underage compliance...how effective are they?
10. - 4654 (3/15/2016) divided by 81 (www.pennwatch) There appears to be no Spirits Specialists in the PLCB.
11. - 5000 employees and 800 Wine Specialists (Total Wine wiki ). Look at it this way: the PLCB has ONE retail wine specialist for every 7.4 stores, Total has SIX at each store.Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-24343928978009800412016-04-13T08:30:00.000-04:002016-04-13T08:30:03.543-04:00The PLCB Hiding Failure Once Again - UPDATED!Back in October of 2015 the PLCB came out with a new magazine called "Savor." It was supposed to be a quarterly guide to premium Wine & Spirits. You can see a copy of it here. See anything odd about that front cover? Neither did the PLCB, and that may have come back to bite them. They apparently didn't do any due diligence or research to see if the name was taken or if it would infringe on a current publication.

While it's mostly speculation on my part, I suspect the people at Saveur Magazine did take notice that Savor, while spelled differently, was pronounced largely the same, also covered wine and food, and would therefore infringe on their trademark. Normally in business there would be some kind of damages for use of improper use of a trademark, but I can't find anything that shows any were paid. There may have just been a curt cease-and-desist letter, and the PLCB may have taken the smart option for once and pulled the plug, but... These things take forever to work out so there may be nothing to find yet.

However, the telling fact is that I can no longer find ANY mention of Savor anywhere official, and I've always thought my Google-Fu was pretty good. Nothing on the FWAGS website, any search for "Savor Magazine" takes you to the PLCB Taste magazine listings. Savor has disappeared except for the actual link I posted above. Maybe one of you readers can find more than I did.

Nobody will notice - go with it!

So, here it is the beginning of April and of course, a quarterly magazine would be out by now since the first quarter of the year ends on March 31st. No Savor to be found anywhere. What happened to it will probably never be known -- the PLCB tries to bury its failures when it can; the wine kiosks being a rare exception that they seemed oddly proud of -- but what is known is that it is another case of PLCB failure added to the long list of poor business decisions they have made since inception.

By the way...there's more amusement to be had. Check the masthead of that issue of Savor: the PLCB got Philadelphia's MetroCorp to do Savor. They're better known as the publishers of Philadelphia magazine, and that's no surprise: the PLCB and PhillyMag do booze events together, which maybe explains why PhillyMag is a lot less pro-privatization than ... well, almost any other Pennsylvania publication, except maybe Taste. So are we back at audit time? How much did the PLCB blow on this contracted disaster? I'm going to try and find out but maybe like with TableLeaf, nobody in the PLCB will remember and there won't be any paperwork left to check.

UPDATE:

Unlike the 40 days it took the PLCB to answer my questions about negotiations the PLCB was much quicker with this inquiry. Their answer to what happened to Savor Magazine is that; "Savor magazine was renamed Premium Collection. The Spring/Summer edition is anticipated to be available around the middle of June." Great, that doesn't tell me what happened just what is going to happen. So the next question is if Savor was renamed because of the trademark infringement I speculated about above.

They wouldn't outright admit to that but came up with this answer; "The PLCB has determined that a new name for its quarterly publication focusing on premium products – "Premium Collection" – would both align the publication more closely with our Fine Wine & Good Spirits Premium Collection luxury brand and avoid any confusion with another business." They couldn't determine that there would be confusion BEFORE they published? This is pretty much double speak for "Hey we got a Cease And Desist order from another publication and since there wasn't a chance in hell we would win we decided to change the name and it took us too long to come up with "Premium Collection" so the publication date had to be pushed back." Is there any doubt? As Paul Harvey used to say, Now you know the rest of the story.

Privatize.Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-25372399045493791422016-04-08T08:37:00.001-04:002016-04-08T09:28:16.735-04:00The lettersI'm not going to post much commentary on these letters between myself and the PLCB; I'll let the letters speak for themselves.

February 26th, 2016 Letter to PLCB Chief Counsel Rod Diaz

Dear Mr. Diaz,
On Feburary 25th the House held an Appropriations Committee meeting with the PLCB. In that meeting the Chairman of the PLCB Tim Holden said that they do not negotiate with suppliers because, and this is an exact quote: "People somehow believe that we have the ability to negotiate with the vendors. We have to do it proportionately so we have to have a markup that's consistent." Later Board Member Michael Negra reiterated with "The manufacturer sets the MSRP, the manufacturer's suggested retail price, and through the system it's backed down to determine what we pay for that product."

Now looking at Title 47 Ch. 1. Art 2 Section 2-207 (b) General Powers of the Board, I can find nowhere that says prices can't be negotiated nor that they have to use the MSRP. In fact, the wording of the stated section, "Prices shall be proportional with prices paid by the board to its suppliers and shall reflect any advantage obtained through volume purchases by the board.". would seem to indicate that they should be negotiating to gain an advantage through volume purchases.

Given the language of the law, I'd like to know what the Board's reasoning (legal reasons, decisions, laws, opinions or whatever else pertains) is used to justify not negotiating and simply using the MSRP to determine pricing.

Sincerely,
Albert Brooks

April 6th, 2016 -- The reply came not from Chief Counsel Diaz but from Elizabeth Brassell the Director of Communications for the PLCB. It turns out there is no legal reason after all. (The emphasis in bold is added.)

Mr. Brooks:
I apologize for the delay in getting back to you, but on behalf of the PLCB and Chief Counsel Rod Diaz, I'm happy to address your February 26 email regarding the PLCB's ability to negotiate prices with suppliers of wines and spirits under the proportional pricing mandate of the Liquor Code.

You are correct that the Liquor Code does not indicate that prices can't be negotiated or that the PLCB has any obligation to use manufacturers' suggested retail prices. In fact, as you suggest, the PLCB's buying power, as well as its discretion to list and delist products, allows for some price negotiation with vendors. However, any advantages obtained through volume purchases are directly reflected in the shelf price.

Because of the proportionality requirement, the mark-up applied to wine and spirits must generally be uniform across the state and across various product classes and brands. Suppliers know that, and when they present products and prices for PLCB regular listing consideration, they often start at or above the retail price at which they want their product offered on our shelves, then reverse engineer the tax and mark-up formula to get to the price at which they'll sell to the PLCB.

It is this general listing process that Board Chairman Tim Holden and Member Mike Negra were referring to in discussing price negotiation in recent appropriations hearings before the legislature.

While the proportional pricing requirement was intended to promote flexibility when it was enacted in 2007, in reality it simply limits the PLCB's ability to consider any factors in setting a shelf price other than what we pay vendors. Suppliers are aware of these constraints and use it to their business advantage.

We do, however, actively negotiate lower prices on one-time buys, which is how we procure products for our Chairman's Selection and Chairman's Advantage programs, as well as many luxury products. We believe price negotiations are a key reason one-time buys are the fastest growing part of our business.

The PLCB is charged both with offering consumers quality products at reasonable pricesand maintaining and growing tax revenues and profitability for the General Fund.

In seeking a legislative amendment to Section 207 of the Liquor Code, we'd like to have a clear mandate to consider other factors in determining shelf prices, such as product class, the sales history of the product, surrounding sates' competitive prices, national market pricing and the marketing support suppliers put behind their products. This would allow us to lower some prices and increase other prices as the market allows, thereby applying the benefit of flexible pricing as increased PLCB contributions to the General Fund.

Thank you for your questions and the opportunity to respond. Having read your blog posts and social media commentary over the years, we'd also like to invite you to visit PLCB headquarters and meet with leadership staff here. We're always striving to improve our operations, and we welcome a productive dialogue that could help us advance. Let me know if you're interested.

Elizabeth Brassell | Director of CommunicationsPennsylvania Liquor Control Board 604 Northwest Office Building | Harrisburg, PA 17124

Who do you believe?

April 7th, 2016 -- My reply, pretty much saying that if you wanted to do better...you could.

Dear Ms. Brassell,
Thank you for the reply. I really do understand that negotiation is a give and take between two parties, each with their own idea of the value of what is being bought or sold. That said, I have serious doubts that the PLCB has ever done any analysis to see if the sales increase from lower pricing would more than offset the amount collected at the current higher price thus collecting more for the state. Since increasing sales IS one of the primary goals of the PLCB, this option should be taken far more seriously than it is.

As in my example with Oregon for a 750ml of Jack Daniel's, there certainly is room in the pricing structure, since Oregon also works on a set markup, and yet the math says they have to be paying a lower price even though Pennsylvania buys more than 5 times as much. 2,422,647 units for PA Vs. 433,506 * units for Oregon.

While I realize negotiation is not possible across all the items that the PLCB stocks, certainly the top 100 sellers should be scrutinized using Sales Price Variance Analysis to decide what cost is most beneficial to the state and consumer, it isn't that difficult to do.

I appreciate your offer of a meeting but my goal is not to make the PLCB better, they have had 82 years to work on that themselves, my goal is to eliminate the state store system and have it replaced with what most of the country considers normal. A free market system that is regulated by the state. Since our goals are non-congruent with each other a meeting will not further my wants and won't shed any more light on your problems than the reading of the blog which you say you already do.

Sincerely,
Albert Brooks
So there you have it. Why they say they can't or won't try to get better prices for the consumer and why I say they aren't trying. The question now is...who do you believe?Albert Brookshttps://firstname.lastname@example.com:blogger.com,1999:blog-591881213265091346.post-18013683666098978012016-04-04T13:51:00.000-04:002016-04-06T00:26:55.977-04:00More PLCB convenienceOn April 16th, 2011 the PLCB increased convenience, affecting the 4,200 residents of Renovo and the immediate surrounding area, by closing the State Store in town. They decided it was much more convenient — for the PLCB, apparently — to have the residents drive a minimum of 55 miles round trip to the State Store in Loch Haven: the only State Store in all 900 square miles of Clinton County, the only State Store for all 40,000+ residents of that county.

Of course, the PLCB has said they are "actively looking" for a replacement spot in Renovo. I'm pretty sure that after five years some lard-assed PLCB real estate drone could have walked to every building in Renovo and the surrounding area. So I have to question on how "actively" they are "looking," or if they are just "actively" running their mouth trying to obfuscate the fact they aren't really doing anything. Last year I suggested the empty store at 112 St. Clair Street and Third St. in Renovo, which has parking and a loading dock, but no one "actively" did anything, and now it isn't available.

So how fair is this? Let's look at it the PLCB Way. The Almighty Liquor Code favors quotas: so many bar and restaurant licenses for so many residents, so many beer distributors and importing distributors per so many citizens...that sort of thing. Once it was one "R" license (a 'bar license,' roughly) for every 1,000 citizens, now it is 1 for every 3000. Apparently we don't need as many restaurants with beer and wine anymore; when did that change? What about State Stores? 45 years ago, there was one store for every 15,608 citizens. As of today, there is one store for every 21,225 citizens. Population went up, number of stores went down a lot, almost 25% down. That makes it more convenient for the PLCB and their ever-increasing operating costs, but what about you?

Based on that current ratio, Clinton County should have two State Stores, but they don't, and after five years they still don't (and of course, they're still screwing around with where they're going to have that one store!). I have to give the citizens credit for being so patient. Looking at the U.S. average, Clinton County should have seven liquor/wine stores, and they probably would under privatization, despite what the PLCB and its lockstep lackeys in the Legislature keep saying about a vast booze desert in upstate if privatization takes place.

It's a simple proposition. Renovo has two area grocery stores, one area beer distributor, and three area drug stores. Do you think any of those would have liquor and wine if allowed? You bet they would, because they know how to run a business already. Would the selection be better than the State Store? I guarantee it, in writing, and I'll eat my computer if I'm wrong! I'm not worried, it's an easy bet. Any selection is better than what the PLCB is providing now in Renovo: zilch, squat, zero, nada, nothing.

As long as we have the police-enforced monopoly State Store System, there will be less service in rural areas, because only the with the featherbedding incompetence of an institutionally corrupt and directionless agency like the PLCB can a state-backed complete monopoly not break even with the only liquor store in town. Privatization will at least allow somebody to provide what the PLCB won't, or can't. Privatization will bring small stores, large stores, specialty stores, and CONVENIENT stores. Will they carry everything? Of course not, but they will carry more than a closed store or a store that currently doesn't exist. A win for Clinton County!

You have to wonder why Clinton County's representative in the House, Michael "Mike" K. Hanna, consistently votes against privatization. Is it because of the tiny handful of votes represented by the employees of the State Store in Lock Haven and their families? (Er...in Lock Haven for now, that is.) Or is it because he doesn't think his constituents can handle more than one liquor store? Or is it because he likes inconveniencing the thousands of tourists, hunters, and fishers that visit Clinton County every year, the hundreds of people who are working in the gas fields in Clinton, and the students (of legal age) and faculty at Lock Haven University? Because he does vote consistently against privatization (of course he does, he's the Democratic whip). If you live in Clinton County, why don't you ask him why he keeps voting against your convenience?

The PLCB vs. Real Business

Retail exists for the benefit of the consumer. The PLCB exists for the benefit of the people working at the PLCB. The consumer doesn't even enter into it, as admitted by the PLCB when they said they don't try to get the best pricing, they just pay whatever the producers ask. Now they say they want to "negotiate" as part of "modernization"; they aim to keep the difference between what they now pay and the lower price to maintain their bloated structure, not to lower prices for you and me. As if!

We deserve better. The State Store System had 82 years to prove their case, and the court of the public has said they failed. Just ask the people of Clinton County how well they are doing their job.

END IT, DON'T MEND IT.

Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-57065090694539046382016-03-28T08:26:00.000-04:002016-03-28T08:26:37.394-04:00Pennsylvania isn't even a good liquor control state Pt. 2

In the first part of this story, we showed that even the other control states didn't think much of the PLCB, pretty much shutting them out of the "best practices" awards at the NABCA convention (National Alcohol Beverage Control Association; yes, it's real). Maybe it's because Pennsylvania doesn't even pay attention to what other control states are doing.

Imagine you are a slow, lumbering dinosaur from the Prohibitioneaous Era, just doing your own thing, not really paying any attention to what the world around you is doing; why should you, you've got the world to yourself! About 40 years ago, you get this itch. It isn't so bad, so you just ignore it, but it gets a little worse each year. Finally you decide to see what it is, and you plod over to the dinosaur doctors at Stateways (where all the dinosaurs go!). They tell you that you need to paint yourself different colors, and maybe put some State Approved plants around where you hang out to hide your huge bulk and ungainliness. Maybe change your name from Huge Lizard to Fine Green Friendly Lizard so that people might forget how big dumb and slow you are. That should help, they say. and also you should pay some attention to what the other lizards are doing and not just wander off and do whatever you want to any more.

I'm a dinosaur too!

But you're the biggest dinosaur in the land, and nobody can tell you how to do things! You've been doing the same thing forever, and in your mind it has worked just fine. (Remember that dinosaurs have little tiny brains for their size). So while the other dinosaurs finally figure out what all those bothersome little ants want (the customers), you continue as you were, because you know best. And you never see the comet.

And so it goes with the PLCB. For example, the other control states (why can't we be more like New Hampshire?) finally figured out what the new hot brands of vodka are, ones that the people want to try, and put out a list. Now I can't imagine how long it takes a bunch of bureaucrats to figure out what is "hot" compared to the free market (maybe they chipped in and got a subscription to Market Watch), but they did and published it in the March 10th issue of the control state magazine (18 readers and dropping!).

You won't be surprised to learn that the PLCB has ONE of the five hot brands listed. Is it something new and unusual that their buyers discovered? Of course not. It is Elyx, a high-end variant of Absolut, and while it's admittedly excellent and quite different...it's garnered a ton of press, and is a variant of the largest selling imported vodka in the PLCB inventory. I bet that took some real effort on the part of the PLCB to pick it out.

The PLCB knows whats hot!

If you are curious, the "hot" vodkas picked out by the control states (except PA) are:
1. Goral Vodka Master.
2. Absolut Elyx Vodka
3. Bombora Vodka
4. Black Death Vodka
5. Danzka Vodka

Remember how the goal of the PLCB is to be better than Utah? Utah carries two of these. Want to guess how many are available in the private stores across the Delaware river?

When Macy's doesn't have the color you want: you go to another store.
When Boscov's doesn't have the style you want: you go to another store.
When Giant doesn't have the meat you want: you go to another store.
When Mattress King doesn't have the mattress you want at the price you want to pay: you go to another store.
When the PLCB doesn't have what you want...you have to (illegally) go to another state!

Private business, private retail, is how America shops for everything else. When will Pennsylvania see booze normality?Albert Brookshttps://firstname.lastname@example.com:blogger.com,1999:blog-591881213265091346.post-57041542469283075402016-03-23T14:50:00.000-04:002016-03-23T14:50:13.516-04:00Beer in Supermarkets: the Down SideGiant Market plans to sell beer at their Stone Mill Plaza store in Lancaster County!

Weis Market opens beer cafe in Mechanicsburg!

Yeah, really, beer in Da Grocery Store in Da Commonwealth!!!!

Is this great? Or is it pathetic?

I asked that question seven years ago, when I first bought a beer at a Pennsylvania supermarket. It's high time that the question was asked again, because things are accelerating. We're seeing more and more big supermarkets adding "beer cafes" and selling sixpacks, and there are going to be consequences; we need to look ahead at what may happen and consider action to head it off.

It's a simple problem. It's great that Pennsylvania supermarkets have figured out a way to sell beer, a workaround that involves sacrificing part of their building to create a "cafe" where people could have a beer if they really wanted to (but mostly don't, with a few cool exceptions where the idea's been embraced) and buying a tavern license, which can be wicked expensive (check by county; hello, Chester!). But clearly the big chain supermarkets -- Giant, Wegmans, Weis, Whole Foods, Giant Eagle -- have found that the profit is worth the cost, because it seems like a month doesn't go by without another opening.

Why is that a problem? A few things. First, Pennsylvania has a "quota system" for liquor licenses: one per 3,000 people in a county. It's essentially a broken system, as it's never really kept up with population shifts, and there are a ton of "grandfathered" licenses in counties that have lost population, and there are a number of exceptions (The Almighty Liquor Code has a silly number of kinds of licenses), but essentially, there are no new tavern licenses being issued. If you want a liquor license, you have to buy one on the open market, because the Legislature foolishly made them transferable and salable. I say "foolishly" because when a liquor license -- a piece of paper issued by the State with no intrinsic value except what the State-enforced "quota system" has given it -- is sold in Chester County, for instance, for $270,000, the State gets next to nothing. Even though the full value of that license only exists because of State law. Yeah, I call that foolish.

That's a problem, because every time a supermarket simply wants to sell beer, it buys up another of these limited licenses, which then become more scarce, and therefore more expensive if you want to buy one to open an actual bar, tavern, brewpub (you need a license to sell anything other than your own beer or Pennsylvania wines at a brewpub), or restaurant. As licenses get more expensive, you get more chain restaurants and fewer independent operators opening (because they don't have the deep pockets); you get more nuisance bars (because they have to sell more booze to make their loan payment), and you get more high-end places with expensive booze (which isn't bad in and of itself, but if the ratio is unbalanced, people have fewer choices).

Another part of the problem is that it creates two tiers of grocery stores: the ones with beer and the ones without. I recognize that some grocery stores don't want to sell beer; especially in rural Pennsylvania, where there are some family-owned places that simply don't hold with alcohol at all. Fine, no reason to force stores to sell beer, but there are stores that would like to and simply can't afford the ridiculous unnecessary expense of buying a tavern license and tying up a substantial amount of retail space and equipment in a "cafe" with separate beer cashiers.

This was brought up at the McIlhinney Hearings in 2013, by a representative from Redner's Warehouse Markets, and Senator McIlhinney's response was essentially 'that's nice, but that ain't gonna happen.' Since then, there have been attempts to come up with a separate license for grocery store sales (of course, another type of license is exactly what we need!), none of which went anywhere. Given the tenacious opposition of the beer distributors to any expansion of grocery store beer sales (and the likely opposition of the already-licensed groceries), I doubt this will fly, and...

That is going to mean we'll have this half-assed workaround forever. The stores that got a liquor license won't be happy with anything that devalues that major investment, so they'll be fighting it. And Pennsylvanians are pathetically grateful for anything that even looks like buying beer in grocery stores (and having a liquor license actually puts the stores one tiny step away from selling wine, as there's already been a push to allow taverns to sell "to-go" bottles of wine), so if we think we have it, we're not going to push for it; we're just going to go to the stores that sell beer. That means that more and more supermarkets are going to go after tavern licenses, which is going to accelerate the scarcity issue (more chains and more nuisance bars!), and put even more pressure on the family-owned supermarkets to sell or close.

Well, hello, unintended consequences!

More crappy nuisance bars. Friendly neighborhood bars will sell their licenses at top dollar while they can, and the families will retire. And we get further away from a REAL solution to the problem.

This is yet another fine mess the PLCB and the Legislature have gotten us into, with the help of the MBDA and the behind-the-scenes maneuvering of Bucks County beer mogul (and SEPTA Board and Turnpike Commission member; and did you know he also owns 4% of the Sands Casino?) Pat Deon. Please note that I do NOT blame the supermarkets; they're just playing the hand that was dealt to them, and playing it well.

The only solution to Pennsylvania's alcohol beverage sales quagmire is going to be an all-alcohol solution, some grand bargain that fixes everything. More on that to come.Lew Brysonhttp://firstname.lastname@example.com:blogger.com,1999:blog-591881213265091346.post-80003455961762730282016-03-22T08:33:00.002-04:002016-03-22T09:37:41.619-04:00Dangerous Things
We citizens of the Commonwealth are lied to every day by the PLCB, its associated unions, and seemingly every Democrat in the Legislature about how we need The State Stores to protect us from ourselves. That alcohol is the one drug that requires not only regulation by the state but state employees to sell it to us. Never mind that the alcohol in beer is exactly the same...but for some reason that can be sold by private businesses, or that the alcohol in a drink is exactly the same, and that can be sold by private businesses too (although they do want them to have their special PLCB training (which is of dubious value)).

What about all the different legal drugs? Why is it that pharmacies aren't run by the state and pharmacists state employees? Prescription drugs, by definition, need to regulated, but it seems that private business can handle that. There were almost a third more prescriptions filled in Pennsylvania in 2014 than all the bottles and boxes of wine and liquor of all sizes sold by the PLCB. Remember that these are drugs that the Federal government says are too unsafe to be sold without control, yet every state sells them through private businesses. Hard to explain why they aren't under state control, given the booze idiocy we put up with in Pennsylvania.

Drugs and alcohol are an apples to apples comparison. You can't explain why they are treated any differently on one side, because the other side is exactly the same. A logical fallacy has to exist: that fallacy is that we need State Stores and State Store employees to safely sell us wine and spirits. More proof is offered in that a strong majority of states have privately-owned retail alcohol sales, including every one of the states bordering the Commonwealth. Guess what: add them all up, and on a per capita basis, they do better in every alcohol harm statistic — DUI, underage DUI, binge drinking, underage binge drinking, and alcohol-related fatalities — than Pennsylvania. The "control" is not working.

How about guns? There is a saying that guns don't kill people; people kill people. Politics aside, it's at least partially true, since unless you beat somebody to death with your gun, you also need bullets. You can have all the guns you want, but without ammunition you probably aren't going to kill anything. However, while there are all sorts of regulations and controls on guns (though they are also sold by private businesses), there aren't many on ammunition. If you can buy cigarettes, you can buy bullets. Taking one drink won't kill anyone (despite what your D.A.R.E instructor may have said). One bullet can, yet you can go buy a whole box of bullets at Walmart. Is the state really looking out for our safety?

The myths just keep exploding

So if we aren't safer having State Stores...why keep them? State revenue? How much is less safety and the worthless and patronizing annoyance of the State Stores worth? The entire non-tax contribution of the PLCB is 3/10ths of 1% of the budget. Chump change, a rounding error. So maybe it's the political patronage and nepotism. We have to deal with a system that is less convenient, has less selection, keeps us less safe, but still costs more, so some political hacks can have a nice state job?

Or is it the entirety of the agency, a jobs program? If it's a jobs program, it's insignificant. The entire PLCB isn't even 1/10 of 1% of the state's full-time employment. You could fire every one of them, and the state unemployment rate wouldn't even quiver. If we're going to pay for a jobs program, how about we just add some jobs at PENNDOT? We can pay for them by eliminating the Turnpike Commission and folding those jobs into PENNDOT. At least that will get something useful done.

I'm going to bet that it's union influence and a continuing stream of campaign money given to certain legislators (and directly to the parties) that keeps us from being normal. The State Store System clearly isn't better than privately-run stores, or other states would be moving toward it, and that certainly isn't happening. People want freedom of choice, and a monopoly can never provide that.

Private business is normal.

Private sales are normal.

Regulated business is normal.

State-run retail is NOT normal.

Let's move toward normal.
Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-82592530777442178402016-03-18T08:22:00.002-04:002016-03-18T08:22:56.305-04:00Friday Night 7PMWhat serves you better?

This Pennsylvania state store?

Or this grocery store in Texas?

How about this grocery store in Wisconsin?

Perhaps this one in Iowa!

This grocery in Springfield, Mo. is kinda nice too, and like the others, it's open Friday evenings!.

And somehow they get along with no separate entrances, no separate checkouts, and no government employees. This is NORMAL to most people. To be fair, the PLCB does have some liquor stores inside grocery stores (staffed by them, run by them). After over 30 years of trying to get the program accepted, there are fewer than 20 in the whole state, and they call that a success. Grocery stores know that having liquor and wine and beer sales is good for the bottom line. They also know that having a state store inside, that doesn't pay them as much rent as they make selling other things in the same space, isn't.

Maybe ANY local liquor store that would be open in a private system would work. Remember, the PLCB goal is to be better than Utah, not the other 48 states.

The PLCB will always fail the consumer compared to private business.Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-19681180928042558152016-03-15T08:24:00.000-04:002016-03-15T08:24:37.408-04:00We need more state-paid cashiersHere's a radical suggestion: we need more state-paid cashiers...to sell gasoline.

Why? Just think about it.

Gasoline is dangerous, the root cause of 5,687,000 accidents. We need to have unionized state store clerks sell us this product.

Gasoline is flammable. The public shouldn't be trusted to handle such an item. Only state clerks with non-industry recognized training should be allowed to dispense it.

Admittedly, the sale of gasoline has no age limit, but only state clerks are able to determine if they should sell it to you.

Gasoline prices are higher in Pennsylvania than surrounding states and state clerks are well-versed in explaining that kind of difference.

Gasoline fits within the knowledge base of state retail clerks: there are only three types, plus diesel, to know about.

The service, knowledge, selection, and pricing
we've come to expect from state-run stores!

Once the Fine Fuels and Good Gas Stores are established, Pennsylvania consumers will experience a new type of automotive service, like no other place on earth!

All Fine Fuels and Good Gas  Stores will look the same and carry the same products: gasoline, and diesel fuel, along with a small number of car magazines and small accessories, like those pine tree air fresheners. If you need oil or transmission fluid, you will be able to buy them somewhere else. You may be allowed to buy a lottery ticket there...someday.

Specialty gasoline, like aviation gas or racing fuel, will only be sold where the state deems it necessary, which is not necessarily where it might be needed most.

Premium gasoline will be available in a limited number of Premium Selection Fine Fuels and Good Gas locations.

The Fine Fuels And Good Gas website will tell you where to go to get gas (but not how to get there or how far away it it is).

There will be approximately 600 Fine Fuel and Good Gas Stores, a huge savings over the current number of gas stations in Pennsylvania (approximately 630,000). Overall operating costs will remain about the same (due to the higher staffing numbers and higher pay and benefits than in any other gas station in the world), but supply and real estate costs will be much lower (and paid for by the Oil City Flood Tax).

Unlike so-called "convenience stores" in other states, you will not be allowed to buy any soda, water, chips or any other snack at Fine Fuels and Good Gas Stores, as the temptation to drive away eating and sipping will be too much, and too dangerous. You'll have to drive somewhere else to get those. Remember - The state knows best what is good for you.

Fine Fuels and Good Gas Stores will not be open before 9 a.m. or after 9 p.m. in most locations, nor on any holiday (except for the first day of deer season and Groundhog Day). Only one-quarter of the Fine Fuels and Good Gas Stores will be open on Sunday (no easily-consulted list will be available).

Some Fine Fuels and Good Gas Stores in rural areas will only be open three days a week, and some counties will only have one store, so all Pennsylvanians are urged to plan ahead for your purchases (and keep emergency supplies in your trunk).

You will not be allowed to buy gasoline in another state and bring it into Pennsylvania (non-refundable fuel-dumping sites will be built at all border crossings; once their tanks have been emptied, motorists may then pump the fuel back into their cars at Pennsylvania-approved prices).

Self-service fuel pumps are strictly forbidden. There is a limited pilot program of fuel kiosks, a promising technology where you insert your license and credit cards into a card reader, prove you are sober by blowing into a breathalyzer, pirouetting in front of a built-in video camera and then confirm that you will not use the fuel in an illegal manner. All fuel kiosk customers will be monitored for compliance for 90 days.

When fuel prices are lowered by the refineries, a full 10% of the savings will be passed on to consumers as lower pump prices within 120 days (at the discretion of the Pennsylvania Fuel Control Board)

To keep operating costs down, the Pennsylvania Fuel Control Board promises to keep employee benefit costs at no more than 104% of salaries (the same as the State Liquor Stores), although how long that may be is not guaranteed.

The Pennsylvania Fuel Control Board will run this huge state enterprise; three men (yes, men) who have no experience with retail sales, fuel, gasoline, diesel, automobiles, tires, garages, or roads, which insures their total impartiality. The state will spend millions of dollars every few years trying to hide the fact they own and run all the Fine Fuels and Good Gas Stores. Fine Fuels and Good Gas Service workers will point out that there is reverse border bleed (out-of-state residents buying gas in Pennsylvania, mostly at a dozen or so border stations where the prices will be kept artificially low), proving that our system is better.

The Fuel Control Board has promised not to try and get the best prices for the citizens in trade for taking care of them for the next 80 years because the state knows best what is good for you.

Does this make any more sense than a state monopoly on wine and spirits sales? Do we really need this? Is the state better off because of the State Store Monopoly? Are YOU better off?

Privatize and move to NORMAL!Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-16314997321560396562016-03-11T08:05:00.000-05:002016-03-14T13:33:49.599-04:00Did the PLCB lie in front of the House or the Senate?Liquor Control Board members recently spoke to the House and the Senate, and appear to have made contradictory statements in the two sessions. Did they lie when they told the House Appropriations Committee that they can't negotiate prices with suppliers, or when they told the Senate Appropriations Committee that they can? It had to be one of them.

Make up your own mind; you can hear exactly what they said.

In front of the House Appropriations Committee at about 2:43 in, PLCB Chairman Tim Holden says they can't negotiate. See that here.

Then in front of the Senate Appropriations Committee, at about 1:23:46 in, Executive Director John Metzger, with the Chairman sitting right there, says they can. See that here.

So if the Chairman is correct, that they can't, then the Board has been and is just the normal bunch of incompetents we have come to expect. If they can negotiate, then the Board doesn't care about the consumer and is too lazy to try and get a better price.

Are either of those choices what we want to keep, and why have they lasted 82 years?

Solve the problem - Privatize and let real business handle business.Albert Brookshttps://firstname.lastname@example.com:blogger.com,1999:blog-591881213265091346.post-4101529930965902332016-03-02T08:40:00.000-05:002016-03-02T11:28:14.604-05:00How PLCB buying power incompetence has cost you and me BillionsIn my last post, PLCB "Buying Power" A Myth, (which you really should read first), I told you how for the past eighty-plus years the PLCB's incompetence in not negotiating or even trying to negotiate the best prices for Pennsylvania liquor prisoners should damn them for all eternity to the lowest circle of Hell, the one Dante reserved for people who betray those whom they should serve.

As always, we are going to provide some numbers to show what they've cost you. I'm going to use the largest selling whiskey in the state as an example, the standard 750 ml Jack Daniel's Old Number 7. (I thought I would use that because when the PLCB reads this (and they do), it might reinforce how to spell Jack Daniel's correctly, since they seem to have a problem with that.)

We are going to compare Pennsylvania prices with the state that has the 2nd highest liquor taxes in the country — Oregon, also a control state with uniform prices — and see who at least attempts to take care of their customers: the PLCB or the OLCC.

From the PLCB we know that (non-negotiated) cost +30% markup (required by law) + handling fee (arbitrary) + 18% Johnstown Flood Tax (levied on the price) + rounding up (always up!) to nearest .49 or .99 (just because) = Retail Price. In this case, our bottle of JD has an initial cost of $14.46. so putting that into our formula we come up with $14.46 + 30% ($4.34) + Handling fee ($1.20) + Flood Tax ($3.60) + Roundup ($.39) = Retail Price of $23.99.

Oregon doesn't give us their unit price so we have to work backwards from the retail price to figure out approximately what their cost price is. Oregon works on cost + 79.8% markup + $1.40 Handling fee + $.50 per bottle surcharge + roundup (to nearest .05). Oregon's shelf price for a 750 ml bottle of Jack Daniel's Number 7 is $24.95 or about $1 more than PA. Taking that $24.95 and working the formula backwards we subtract the roundup (which we'll call zero, because the price is already at $X.95, and we don't really know, except that it's not much). Next we subtract the surcharge of $.50, which gives us $24.45. Then we take out the handling fee of $1.40 to leave us with $23.05. Taking out the 79.8% markup ($23.05/1.798) ends up with a cost price of $12.82 at most (it's unsure because of the unknown roundup, but it's less than a dime difference). Remember: PA is paying $14.46.

Hey, but Oregonians still pay more on the shelf, so Ha-ha! Only...how much is the PLCB's "non-negotiable" system of costing and pricing costing you, when you compare it to the unit price the OLCC is getting? Easy enough to find out. Put Oregon's cost into the PA formula. $12.82 +30% = $16.67; adding $1.20 gives you $17.87; drown it in the 18% Flood Tax, and that brings it to $21.08, then add the roundup…and you end up with $21.49, a $2.50 savings ON EACH BOTTLE, if only the PLCB did their job. PLCB incompetence in business cost PA consumers over $6.1 Million extra on Jack Daniel's alone last year.

You're getting screwed out of $2.50 every time you buy a bottle of Jack — remember, that's only one example — because the PLCB can't be bothered (or doesn't know how) to use their "massive volume leverage" to get the same price little Oregon does. Multiply that by how many millions of bottles they've sold since 1934, and that is how much they have cost the consumers of the state. An amount you have been paying extra for all these years because of PLCB ineptitude, laziness, and their "we don't give a shit, we're a monopoly" attitude. Far more than any so-called "profits" they have ever turned in.

Remember: this isn't a tax that's being levied on you that's going to benefit the Commonwealth, it's not a fee you're paying to the PLCB to pay for alcohol enforcement, it's not "profit" that gets sent to the general fund whether it's real or just hidden pension funds...it's money the PLCB doesn't know how to get from distillers, vintners, and importers. It's gone to line their pockets, exactly the people who the PLCB apologists rant and rave that privatization will somehow steal all your money to pay. Too late: they've already got it, had it for decades, thanks to the PLCB.

Is this the system you want to keep or do you want them to "modernize"? Because "modernization" and "flexible pricing" will just cost you more by statute instead of by PLCB incompetence; the only difference will be that the PLCB will waste the money on Increased Operating Costs to fuel the Boondoggle Machine. I say we privatize and let business people run businesses and end the PLCB screwing of the public.Albert Brookshttps://email@example.com:blogger.com,1999:blog-591881213265091346.post-48602405645842215802016-02-29T08:25:00.000-05:002016-02-29T09:04:22.588-05:00PLCB "buying power" a mythThis is the single most important piece of information I've written about.

The House appropriations committee had the PLCB in for their annual hearing on February 25th, and besides the normal tap-dancing that they do ("Well, sir, it's my personal feeling that we'll meet those goals, yes"), the Chairman of the PLCB let it slip out that the PLCB doesn't really have any buying power.

Ooops! In a response to a question put forth by the Appropriations Committee about where they might be able to find more income, LCB Chair Tim Holden said that because of the current 30% markup structure, the board can't negotiate for the best price. According to Mr. Holden, the manufacturer sets the price they want to sell their product for, and the the PLCB backs down from that through the 30% markup, 18% Johnstown Flood Tax, bottle fees, and whatever other charges they have that they've hidden from you, to come up with a buy price that they will pay. Unlike a real business that tries to get the best possible price and then adds on what it needs to make a profit and cover expenses.

This quote is taken from the Appropriations meeting; you can see it here, at about 2:43 in. Holden says, "People somehow believe that we have the ability to negotiate with the vendors. We have to do it proportionately so we have to have a markup that's consistent. And we believe that the money that can be made by negotiating a better price on different products is where the greatest amount of [increased] money can be achieved."

A little later, Board member Mike Negra backs him up, even more clearly: "The manufacturer sets the MSRP, the manufacturer's suggested retail price, and through the system it's backed down to determine what we pay for that product. Not necessarily your typical retail relationship between us and the manufacturer. We can't really leverage our ability of purchasing, our 'buying power' is not really leveraged in that manner. There are significant dollars, we believe -- it'll take a lot of time, it'll take a real learning experience for our vendors and for our buyers to change that." Remember: Negra is the first Board member in a while to have any actual retail experience!

Now I can understand why the lazy way is taken. It is less work for the PLCB if they don't negotiate every price. But I have yet to find any justification in the Liquor Code for the attitude that they can't negotiate for the lowest price, which is what the board members are saying here. That reasoning seems to go against the what the Code says the Board should be doing already. The Code says the price has to be "proportional," not that it has to be proportional from the MSRP or that it can't be negotiated.

Section 2-207 (b) of The Liquor Code under General powers of board says: "Prices shall be proportional with prices paid by the board to its suppliers and shall reflect any advantage obtained through volume purchases by the board." Isn't that the definition of 'buying power'? If they aren't negotiating prices, which the Chairman says they are not, just how are they leveraging their volume purchases beyond what the vendor says they will give? As Negra admits, they aren't.

I'm going to say this in really big letters so you can't miss it.

There is no volume discount on standard stocked items, because the goal is to sell them at MSRP.

If you are the 2nd or 3rd largest retail buyer of ANYTHING and don't try to get a better price, then the entire organization needs to be replaced, eliminated, done away with for sheer incompetence.

The board not only doesn't want to save you money, they want to take away what money they could save you by negotiating lower prices by using the nebulous "flexible pricing" they want as part of "modernization." Believe this: "flexible pricing" means negotiating a lower price and still charging you the higher "MSRP" they charge now, and keeping the difference. At the PLCB, they don't care about the consumer. All they care about is covering their ever-increasing expenses so they can keep the boondoggle machine running at full speed.

Do we really need this? Privatize and let real businesses try to save you money by being in competition with other businesses, because they're motivated to keep you as a returning customer...rather than knowing that you have to come to them because that's the law.

Honestly? Sometimes you have to wonder how stupid we all are for putting up with kind of crap for eighty years.Albert Brookshttps://email@example.com