Brian Goldman | Put an end to 'Prohiboozetion'
The Gold Standard | The state-run monopoly on alcohol in our state must end
· January 23, 2012, 1:20 am

On Saturday night, my roommate and I took a drive around campus, looking to purchase some supplies for the night ahead. But besides the staples (cheap beer, cups and ice), we decided to step outside our comfort zone and add one more to the list: a bottle of wine.
But we soon encountered a problem, a big one. We were in fact on a fool’s errand. These days, life within the Penn bubble means no wine or liquor anywhere closer than 49th and Baltimore Avenue, whether you’re of the Carla Rossi jug variety or the Château Lafite chichi type.
It wasn’t for lack of trying. We went to Fresh Grocer, where we learned that the wine machine (technically, wine “kiosk”) had shut down. We even took a visit to Evan’s Pizza on 43rd and Locust streets, an attempt that failed miserably too. We were resigned to a wine-less night.
With the recent closing of Fine Wine & Good Spirits on 41st and Market streets, our campus suddenly has nearly reverted to its Prohibition-era existence, with no access to liquor or wine, just beer.
So who’s the culprit behind the confounding policy that has rendered our campus a pseudo-dry desert? It’s surprisingly straightforward: The Pennsylvania Liquor Control Board.
The PLCB was founded in 1933, four days before Prohibition repeal went into effect. Then-governor Gifford Pinchot’s remarks about the agency’s inception are awfully telling. He said the PLCB would “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.”
Seventy-nine long years later, I can finally say, Mr. Governor: Mission accomplished!
The PLCB controls everything (and I mean everything) related to alcohol in this state. It’s akin to Big Brother from George Orwell’s 1984. Want to sell liquor in your restaurant? Great. First you’ve got to get a license from the PLCB. Then make sure you only purchase alcohol from PLCB itself. Also, make sure you don’t serve or sell any alcoholic companies not on the official PLCB brand registration list.
Thank god for BYOBs.
You’d have to travel all the way out to Utah to find the only other state where there exists such stringent state control over alcohol.
Let’s not beat around the bush: the PLCB represents a state-run monopoly that controls a very vibrant and profitable sector of the economy.
You don’t have to be a Randian capitalist to recognize the obvious inefficiencies that abound from Pennsylvania’s draconian alcohol laws.
First, the money: The PLCB, by most estimates, brings in approximately $466 million annually through revenue and taxes. The most recent attempt to privatize the wine and liquor retail business — State Representative Mike Turzai’s bill, introduced last year — would, on average, bring in about $500 million annually for the state.
It’s not a huge difference, but it debunks the idea that the revenue that the PLCB generates is unattainable in the private market. But the most fallacious argument that the PLCB advocates advance is the societal one.
The Chief Executive of the PLCB, Joe Conti, attempted this line of argument last year in an interview with The New York Times. He claimed that state-run liquor stores (“Soviet-styled”, as The Times so aptly described them) “aren’t incentivized to sell” to already-drunk customers and minors.
It’s a misleading argument. A recent study by Duquesne University economics professor Antony Davies looked at the social impact of privatizing government-run liquor stores. Davies found that maintain complete control over liquor licenses, like Pennsylvania and Utah, actually have a higher DUI fatality rate than states that don’t.
Representative Turzai’s bill is still making its way through Harrisburg. It’s opposition is comprised of an interesting alliance of state liquor store employee labor unions and conservative religious figures that cling to the by-gone relics of Prohibition.
Unfortunately, the bill has already been watered down to the point where the PLCB would stay intact, yet it is still struggling to pass our state congress. Unbelievable.
We go to the only Ivy League school in the state of Pennsylvania and work pretty hard throughout the year. Evidently, if we want a glass of wine after returning from the library, we’ll have to work even harder to find a bottle to purchase.
Let’s uncork the free market for alcohol and see what happens. It can’t be any worse than this.
Brian Goldman is a College senior from Queens, N.Y. His email address is briangol@sas.upenn.edu. The Gold Standard appears every Monday.




Comments (4)
MS
January 23, 2012, 6:47 pm
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Great article, thanks!
David Harris
January 23, 2012, 6:56 pm
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I could not agree any more! I went to school from ’79- ’83 and it was then just like it is now. I could not believe my eyes when I was a Freshman from North Jersey and could not get any alcohol (beer excluded) without going to a state store…I had thought that was what we were fighting the cold war for?! If I want state controlled alcohol, I’ll move to Cuba! Anyhow, Kudos to Mr Goldman for bringing this farce to light!!!
Adam Maguire
January 23, 2012, 7:53 pm
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I am glad to see other college students paying attention to this issue. I am currently a senior at Temple and I have been following this issue for what feels like a long time, initially out of excitement until I read HB 11 Rep. Turzai’s proposal.
This legislation changes the current tax structure of wine & spirits to a gallonage system. The consumer under the bill would pay a flat tax of $8.25 per gallon for most wines and $11.50 for most liquors in addition to maximum markup of 25%. (P.73 HB 11) Franzia Box Wine will go from $12.49 to 25.38 (p.14 testimony) Say bye-bye boxed wine parties at those prices.
HB 11 instead of abolishing a monopoly the state has on liquor and wine, doubles the amount of liquor stores in the state and reserves 750 of the 1250 licenses for retailers. There are anti monopoly provisions in HB 11 that limit 5% of the market a retailer can control.(p61) The wholesalers total market control can not exceed 50% (HB p39). Now, 5% maximum to 50% maximum market control is vastly different. HB 11 essentially turns a monopoly into a smaller monopoly for wholesalers. A somewhat analogous example is AT&T, Verizon, T-Mobile, and Sprint and these companies. When AT&T mobile tried to merge with T-Mobile consumers were concerned about anti-trust issues.Earlier this year, I personally asked Representative Turzai at a talk-back session in Lancaster County why there was not a definite number of licenses for wholesalers when HB11 designates the amount of retail licenses. He did not give a reason or a numerical response to the language in his bill. He also did not believe that 50% of the market constituted a monopoly (technically accurate) but nothing good can come from any industry controlling 50% of a market.
The combination of dismantling the PLCB, auctioning 1250 new retail licenses, auctioning new wholesale licenses, terminating 3500 employees, transitioning to a flat gallonage tax, and not increasing law enforcement is a recipe for disaster.
The HB 11 is not a free market approach. A free market approach would not limit the amount of market retailers and wholesalers could control. The free market would not let the government designate the amount of licenses to sell with minimum bidding requirements to maximize a lump sum turnover. To put it simply I supposed the problem is controlling “a controlled substance” in a free market.
One last item, from college student to college student. I could be wrong but according to google maps it says there is a Wine &Spirits at 2429 South Street. It says it is just over a half a mile (12 minute walk) from Franklin Field but I don’t know if the South Street Bridge is still under construction. Anyway, good luck on your future booz runs.
House Bill 11 (Without Taylor Amendment) – http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=HTM&sessYr=2011&sessInd=0&billBody=H&billTyp=B&billNbr=0011&pn=2343
House Liquor Control Hearing Aug. 11 – http://pasenategop.com/committees/law/2011/081111/Conti- LCB.pdf
Me calling in for House Bill 11 Discussion on WHP 580
http://www.youtube.com/watch?v=h4MTHQ8P3jw
My Blog Posting from May 2011 Pre-HB11
http://web.me.com/thegoodfightpa/Site/PA_Exculsives/Entries/2011/5/6_Dan_gets_schooled.html
Fan of TGS
January 25, 2012, 3:51 pm
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great piece! No other writer brings the amount of style/attitude like Goldman does in his columns. keep it coming.
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