Bill sounds like private sector

Published: February 22, 2012

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To their credit, leaders of the Pennsylvania Liquor Control Board long have tried to drag the state government's retail liquor monopoly into the 21st century or, at least, the 20th.

Over the last several decades they have introduced greater selection and Sunday sales, for example.

The problem now, as those PLCB leaders face a Legislature and administration with the right political make-up to finally eject the state from the booze business, is that every improvement they suggest simply exposes the fundamental basic problem with the current enterprise. That, of course, is that the system is a government enterprise that cannot match the private sector in serving consumers.

Recently, for example, the PLCB asked the Legislature to revise state laws that govern not just taxation of alcoholic beverages, but actual pricing. That law effectively requires a uniform 30-percent mark-up on all alcoholic beverages that the PLCB sells at retail.

In the private sector, of course, retailers would price individual products in order to turn a profit, but keeping in mind that the objective also is to sell the product in the first place. That might result in a lower mark-up on a fundamentally expensive product and a slightly higher mark-up on a relatively inexpensive one.

But under the centralized control of the state government, the objective is to ensure that a bottle of wine or liquor must sell at the same price in Greene County as in Bradford County, even if that means it doesn't sell at all.

The PLCB flexibility request goes to several points in the impending effort in the Legislature to end state control of alcoholic beverage sales. The PLCB argued recently at a hearing that pricing flexibility would help increase sales - a de facto recognition that many Pennsylvanians chose to buy their wine and spirits in other states, and that a private Pennsylvania system with inherent price flexibility would increase sales. According to the PLCB, the flexibility and a few other changes would produce an additional $70 million a year in revenue for the state treasury.

Those changes in the "three Ps" - pricing, procurement and personnel - would make the system more like a private sector system, with the difference that in the private sector a price point doesn't require approval from the Legislature.

Lawmakers should stop trying to tweak the state system and give consumers the benefit of private sector alcoholic beverage sales.

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