Inconvenience stores: Since '33, LCB has made the purchase of alcohol tough, pricey

Posted: July 27, 2011

IT'S 7:05 P.M. SATURDAY. Poker night. And your liquor supply is running dangerously low.

You hop in the car and head for the state border.

Within seconds of leaving Pennsylvania, you pull up to Total Wine & More in Claymont, Del., where the vast selection and low prices are enough to bring a tear of joy to the serious drinker's discerning eye.

Eight thousand types of wine, 3,000 kinds of spirits and 2,500 beers in quantities ranging from kegs to a single 12-ounce bottle.

No time to browse the Bordeaux aisle, though. You grab three bottles - 1.75-liter Absolut Vodka, 750-milliliter Jameson Irish Whiskey and 1.75-liter Tanqueray Gin - and make your way to one of the 15 checkout aisles. Price: $80. You're home before your poker buddies show up.

Here's how the same scenario plays out in, say, the Frankford section of Philadelphia:

You arrive at the state-run liquor store at Frankford Avenue and Unity Street at 7:05 p.m. Tough luck. It closed five minutes ago. The sign on the glass says it's not even open tomorrow. Or Monday, for that matter.

Even if you'd gotten there earlier, the same three bottles of booze would have cost $112.

Ah, the wonders of a government monopoly.

"It's an anti-consumer system," Jonathan Newman, former chairman of the Pennsylvania Liquor Control Board, said of the wine-and-spirits system he once ran.

That's not an accident. It's by design.

The late Gov. Gifford Pinchot, who died in 1946, is laughing in his Pike County grave today, as the LCB - the post-Prohibition agency he created in 1933 to make it as "inconvenient and expensive as possible" to buy liquor in Pennsylvania - continues to serve its purpose in the 21st century.

"It's turning citizens into bootleggers," said Matthew Brouillette, president of the Harrisburg-based Commonwealth Foundation, a libertarian think tank.

With Republicans in control of the state House and Senate, free-market types might finally get their wish of ending Pinchot's much-maligned legacy.

State House Majority Leader Mike Turzai, an Allegheny County Republican, is leading the latest attempt to privatize the system, which includes 609 retail stores, plus wholesale dealers.

Turzai's bill would double the number of retail locations and replace the state's booze taxes with a new per-gallon tax.

Booze buyers in Pennsylvania now pay the LCB's 30 percent markup and the 18 percent Johnstown Flood Tax, which was passed in 1936 to provide "temporary" assistance to the city, but wasn't repealed after the city was rebuilt. Instead, the tax was (surprise!) raised twice. The flood-tax revenue now goes to the state.

'Like a time machine'

A Quinnipiac University poll last month showed that 69 percent of Pennsylvania voters support the sale of liquor stores. Only 25 percent are opposed. It's easy to see why.

Driving to New Jersey and Delaware to stock up on booze is an illegal, but widespread, practice for Philadelphia-area residents. "Border bleed," it's called, and the state loses money as a result.

Consumers make the short jaunt over the border for the wider selection, lower prices and usually more knowledgeable staff - and to circumvent the bizarre laws that prevent beer, wine and liquor from being sold under one roof in Pennsylvania.

At Total Wine, for instance, the Scotch aisle alone - everything from the $12.99 Old Crofter to the $125.99 Glenlivet 21 Year Archive - is the same length as the entire Wine & Spirits store at 49th Street and Baltimore Avenue in West Philadelphia.

Total Wine's massive wine selection, grouped by country and by regions in France, is a oenophile's dream, and the employees on the sales floor generally know their stuff better than LCB staffers.

The LCB has made significant improvements in recent years, including expanding store hours and opening premium-collection locations that have a decent selection and temperature-controlled wine rooms.

But the agency also has illustrated the absurdity of a government-run liquor monopoly by introducing supermarket wine kiosks that - when they're actually working - require consumers to pass a Breathalyzer test and peer into a creepy camera that transmits live video to a state employee in Harrisburg.

"I think it's insulting to Pennsylvanians. It's a socialist-type system," said Newman, who resigned in 2007 after a fallout with then-Gov. Ed Rendell.

"Like a time machine" is how Kevin Harley, spokesman for Gov. Corbett, describes the difference between buying booze in Pennsylvania and other states.

Corbett, a Republican, favors privatization, but that means taking on the powerful labor union that represents the bulk of the 5,000 workers in the LCB system, as well as conservative Republican lawmakers who oppose easier access to alcohol on moral grounds. And groups like Mothers Against Drunk Driving

Wendell Young IV, president of United Food and Commercial Workers Local 1776, which represents about 2,500 liquor-store employees, blasted Turzai as a "water boy for the alcohol and retail industry," saying his bill would cost thousands of jobs. There's no guarantee, he added, that private operators wouldn't mark up alcohol even higher than the state does.

"In the end, I think it's not going to get approved because it doesn't make sense on the numbers," Young said of Turzai's bill.

Young, like others opposed to privatization, doubts Turzai's calculation that auctioning the state's liquor licenses could net up to $2 billion and that the new tax structure would continue to generate about $500 million in annual tax revenue.

Summer smackdown

The House Liquor Control Committee, chaired by Republican state Rep. John Taylor, will hold four hearings over the summer on liquor-store privatization. The first is today in Harrisburg.

Taylor, of Northeast Philadelphia, said he "philosophically" supports getting the state out of the alcohol business. But he questioned how many House Republicans would risk voting for a bill like Turzai's with no assurance that Senate Republicans would do the same.

"I don't think many of them have seen the advocacy that's going to come at them," Taylor said of newer House members. "It's more of a political lift than people think."

Senate President Pro Tempore Joe Scarnati said last week that he'd like to keep the LCB around for now to build it up like a business.

Ethan Tripp, 32, a self-described "beer geek" from Olney, figures 78 years has probably been long enough.

Tripp, who was among the steady stream of Pennsylvania residents pulling up to liquor stores in New Jersey last week, said lawmakers should've fixed the system years ago - not only by busting the wine-and-spirits monopoly, but also by reforming the state's backward beer laws.

"In Philly, you're getting suckered every time you buy craft beer," Tripp said outside Canal's Discount Liquor Mart in Pennsauken. "We pull in all this world-class stuff, but the only people that can afford it are the people who want to throw down top coin. And that sucks."

Taylor said it's unlikely that rewriting the state's beer laws, which restrict where beer can be sold and in what quantities, will be tackled as part of Turzai's proposal.

"That's way more complicated," Taylor said of the political Rubik's cube preserving beer laws. "That's not going to happen in any of this."

Dick Thornburgh, one of three Pennsylvania governors who have tried unsuccessfully to privatize the liquor system since the 1970s, said the resistance to change "has always puzzled me."

"It seemed to me to be a self-evident proposition that the state shouldn't be in the business," said Thornburgh, who traveled the state with "For Sale" signs in 1986 in an attempt to sell the liquor stores.

Sometimes, though, it can take awhile for Harrisburg lawmakers to get the message. Like, a few decades.

"It was a failure," Thornburgh said of his privatization plan, "but I always took great comfort in a comment made by Woodrow Wilson, who said it's better to 'fail in a cause that will ultimately triumph than to triumph in a cause that will ultimately fail.'

"My hope springs eternal that this cause will triumph someday," Thornburgh said.

|
|
|
|
|