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Radio Smart Talk: Corbett plan to privatize liquor stores

Written by Scott LaMar, Smart Talk Host/Executive Producer | Jan 30, 2013 2:58 PM

Radio Smart Talk for Thursday, January 31:

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The Commonwealth of Pennsylvania has maintained state control of the sale and distribution of most alcoholic beverages since Prohibition ended in the 1930s.  Today, Pennsylvania is one of just a few states nationally that do. 

Former governors Dick Thornburgh and Tom Ridge unsuccessfully campaigned to privatize liquor and wine sales in the 1980s and '90s. 

Polls consistently show the public supports privatization but there also have been pockets of strong opposition – especially in the legislature.  Opponents often counter that private sales of liquor would lead to more drinking and drunk driving and less tax money for the state. 

On Wednesday, Gov. Tom Corbett made the latest proposal to privatize and it may be the boldest, most sweeping one yet.   

The governor wants to sell the state's 600 Wine and Spirit stores and auction off wholesale licenses.  Under the plan, there would be up to 1200 liquor stores. 

Corbett is also proposing allowing beer distributors to sell liquor and wine as well as cases and six-packs of beer.  Beer also would be available at grocery and convenience stores.

Perhaps the biggest bombshell in the governor's plan is the $1 billion he estimates the state would generate from all the moves would be applied toward public education.

Thursday's Radio Smart Talk will focus on the governor's liquor privatization plan and we'll hear from those who support it and those that don't.  Appearing on the program will be Rep. Mike Sturla (D-Lancaster) and Katrina Currie, Sr. Policy Analyst and Dir. of Governmental Affairs for the Commonwealth Foundation.

What are your thoughts on Gov. Corbett's proposal?

Listen to the program:

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Rep. Mike Sturla (D-Lancaster) and Katrina Currie, Sr. Policy Analyst and Dir. of Governmental Affairs for the Commonwealth Foundation.

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Comments: 23

  • Robert Colgan img 2013-01-30 18:30

    I really dislike Corbett's ideas about privatization-----because they take the common wealth of the Commonwealth from the common ("the shared property of all PA citizens")and give a portion of it to a few.
    Often the few then begin to dictate how much of a portion they should get.

    It is the same theft by appropriation that has resulted in the greatest disparity of wealth we have seen in this country in which a small number are very rich and the vast majority are not.

    It is for this reason that I oppose privatization plans when they are proposed.

    But

    the State Stores may be a completely different case.

    It can be argued that the State should never have gone past its legal mandates of licensing, code enforcement, and tax collection in its control of alcoholic beverages. . . that the State exceeded its legal bounds in creating a taxpayer owned system of liquor and wine sale and marketing.

    If this is true, then the State should immediately recuse itself from that ownership and restore to its legally chartered position of overseer and tax collector.

    It may be that this administration or any administration facing the same revenue shortfall as the long-punted-down-the-road pension funding comes due has to do something quickly profitable.
    Somehow, somewhere, money has to be found in a hurry to help avoid financial crisis.

    So, while I abhor the inequity of giving away commonly held wealth to privateers, the State Liquor Stores are an exception and should, I think, be privatized------as long as the State get the very BEST financial deal possible in the process.

    Selling a Golden Goose is not an easy decision....

  • Alison img 2013-01-31 09:15

    Rep Sturla's "concerns" are disingenuous. GIve me a break! "Selection" in PA stores is terribly narrow nad very expensive. And fearmongering about crime and teen drinking and high prices in Washington state is just so much smoke. We know better. I'm from California where beer and wine are widely, freely available in all kinds of grocery and specialty stores and prices are MUCH LOWER, where alcohol-related crime doesn't even register, and most importantly, where the government trusts adults to be adults and control their own drinking choices.

    The idea that the government needs to hold our hand every time we want to purchase a bottle of wine is paternalistic and a clear money grab. Let's get over it, whether it's Corbett's plan or some other approach. It's time to grow up.

  • Radio Smart Talk img 2013-01-31 09:22

    Email from Thomas,lancaster co. manheim twp.:

    to me, i do not want to see the most abused drug promoted, but it seems to me that the LCB has lost its way, it is now in the promotion business like the private label wines, renaming stores. etc.

    if the LCB really is in the business of control its seems like it has lost its way, now it is just a total state owned monopoly, selling as much as it can, to increase the state profits. no different then a shareowner owned business generating profits for its shareholders, i really do not know how the lcb can justify its self.

  • Radio Smart Talk img 2013-01-31 09:24

    Email from Sarah, Harrisburg:

    The government does not need to be in the business of controlling the sale of alcohol in Pennsylvania. I am embarrassed at how backward the state is about this. There are many, many other things the state government should be focused upon - education, roads, etc. etc.

    This is a waste of time, not to mention a terrible set up for the buyer because there is no competition for the consumer to choose where to buy! I am jealous of our neighboring states who have a more ADULT set up for their citizens. Government control of alcohol makes me feel like we are treated like children.

  • Radio Smart Talk img 2013-01-31 09:26

    Email from Loretta, Duncannon:

    Privatizing liquor stores will ruin wine selection. Have shopped in Indiana, Maryland, Ohio, and if you like Sutter Home or Gallo wines this is what you'll see.

    Our wine stores' Chairman's Selections give us great wine selection, plus the knowledge of the staff, at a low price. Corbett is selling all of our assets, what if I sold my house and car, how does that help me long term?

  • Radio Smart Talk img 2013-01-31 09:28

    Email from Linda:

    Is there a way under current law to liberalize the sale of liquor and/or wine and beer while still retaining the current system? I.e. sell in grocery stores?

  • Radio Smart Talk img 2013-01-31 09:30

    Email from Jo:

    I agree with his statistics and point -- I a a law and order Republican who can't figure out why a Republican governor is pushing this idea. I feel so safe in our State stores. There is an abundance of lighting and staff. Plus, who would be silly enough to try to knock off a State store? The PA State Police would be on that crime so fast.

    On his point of selection, we (PA) buy in such large quantities, the prices could not be better anywhere else. I have bought wine and liquor in other states (NC, VA, NY and IL) and our prices are often better and at least competitive when not actually cheaper. Costco is said to be the largest purchaser of wholesale liquor in the US. Well, I've been in the liquor section of a Costco in Illinois recently. Boxes of the same wine, but only about 15 different varieties of wine. Same with the liquor. Not nearly the selection of labels that we have here. I see no way privatization of liquor and wine sales can be an improvement over our current system.

    If selling wine and beer in groceries would make our life more convenient, sell licenses to grocery stores to do that. But I think it would be a sad day when convenience overrules the fabulous system we have today. I think people have not considered the alternative adequately. They think we will have the large stores, the same selection and the great prices we have today, but that is not true in the private stores I've been in, in other states.

  • steven first img 2013-01-31 09:32

    So if I am part owner why have I never been asked to vote for or against this? If it really is such a "no-brain-er" then why has it never come up for a vote when it is obviously such a hot topic?

    Give me a good answer on that one will you please.

  • John Orris img 2013-01-31 09:41

    The Commonwealth Foundation is one of those foundations that if they back an idea you're better off going the opposite way.

    But, lets privatize the stores and tax it like cigarettes.

  • Radio Smart Talk img 2013-01-31 09:56

    Email from Jay Waynesboro PA:

    We live within sight of the Mason-Dixon Line. We have a state store in our community. There is so much traffic back and forth between Franklin County and Washington County, Maryland, it’s ridiculous.

    Sadly, Gov. Corbett has “sweetened the pot” by trying to bribe the state’s residents by offering the profits to school districts (with lots of strings attached, by the way).

    The founder of the Salvation Army was quoted in the 19th century as saying, “The trouble with tainted money, is there t’aint enough.”

  • Radio Smart Talk img 2013-01-31 09:56

    email from Michael:
    Your male guest needs to sell his horse and buy a car so as to visit other States. Those in Harrisburg supporting State ownership do so for one reason, patronage!

    Scott- keep your guest on point. Nice show by the way.

  • Radio Smart Talk img 2013-01-31 09:57

    Email from Kelly:

    I disagree with the young lady - I have not found wine and spirits
    cheaper in the border states. It has been my experience that the
    produce in Pa is much cheaper. I am from Ohio originally and was
    surprise at the $$ and variety that is found in Pa. It is the beer
    store that is a mess. Why 24 bottles at a time, that is stupid!!?? I went looking for a wine i like in Ohio, when their in Dec. and the wine was $4.00 more then I could have found it in Ohio.
    I also bought a bottle of Scotch in Pa. to give to a family member as a present because it was cheaper to do that in Pa. instead of Ohio.
    Since Ohio has gone non-state store prices have gone up and variety has gone down. As far as selling Pa. wine, I for one would never buy it - just not good.

    The best buy is in Florida, or the Virgin Islands.

  • Radio Smart Talk img 2013-01-31 09:58

    Email from Nick, Mount Joy:

    Would it be possible to have beer and wine available in grocery stores AND still keep the “state stores?”

    That way the marketplace would determine the future of Wine and Spirits stores in PA.

  • Radio Smart Talk img 2013-01-31 10:06

    Email from Kevin;

    How many supermarkets closed during hurricane Sandy? How many beer distributors?

    Versus all liquor stores closed for two days.

  • Radio Smart Talk img 2013-01-31 10:07

    Email from Lee, York:

    I'm tired of hearing that the State should not be in the liquor business. That is an ideological stance, not a pragmatic stance. We HAVE a state system, so let's look at the best way of taking care of Pennsylvania's interests. Let's look at the way we want the system run; the convenience; pricing; and all the other factors. Then look at how that might be accomplished with the existing system and how it would work privatized -- THEN pick the best way to go.

    Secondly, if you sell a liquor store system and put the money in Educational operating expenses, you are burning the furniture to heat the house. If you sell a capital asset, put the proceeds into capital expenditures, not operating expenses.

  • Radio Smart Talk img 2013-01-31 10:08

    Email from Patty in Carlisle:

    I don't want to buy any of my goods from government owned stores.
    By the way, I buy beer at Wegmans; I have to show picture/ birthdate ID. I buy beer at the beer store, I have to show my picture/birthdate ID. I buy at the government liquor store, I am never asked for picture/birthdate ID.

  • Radio Smart Talk img 2013-01-31 10:08

    Email from Amy, Harrisburg:

    1. Are the licenses that the Governor proposes to auction unlimited in number? Because if they are limited, it seems that would not be true competition.

    2. Can these licenses be used wherever the owner wants to open a store, or are they geographically restricted? If they are restricted, that also seems to be not true competition. Who would rather open a store in Elk County than downtown Philadelphia?


  • Radio Smart Talk img 2013-01-31 10:09

    Email from Amy, Harrisburg:

    1. Are the licenses that the Governor proposes to auction unlimited in number? Because if they are limited, it seems that would not be true competition.

    2. Can these licenses be used wherever the owner wants to open a store, or are they geographically restricted? If they are restricted, that also seems to be not true competition. Who would rather open a store in Elk County than downtown Philadelphia?


  • Radio Smart Talk img 2013-01-31 10:12

    Email from E:

    Will PA grocery stores be doing what I have also seen on vacation in other states-- wine and appetizer tasting hours? While it was a little disconcerting to see the parents with kids in the cart make their way through the stations, it made for for a decent free lunch.

    Could state stores do the same or do this as frequently? I doubt it. They aren't paying 8.50 or so an hour to the people handing out the drinks and canapes.

  • Radio Smart Talk img 2013-01-31 10:13

    Email from Gordon:
    Your speaker is completely wrong about choice. All one needs to do is drive across any boarder of our state to see the change of choices. I do it all the time.

  • Radio Smart Talk img 2013-01-31 10:19

    Email from Ben, Hummelstown:

    The CDC recommends against privatization of liquor by states in their Community Guide.

    How does the governor's proposal take into account their recommendation?

    http://www.thecommunityguide.org/alcohol/privatization.html

    Summary of Task Force Recommendations & Findings
    Based on its charge to identify effective disease and injury prevention measures, the Community Preventive Services Task Force recommends against the further privatization of alcohol sales in settings with current government control of retail sales. This finding is based on strong evidence that privatization results in increased per capita alcohol consumption, a well-established proxy for excessive consumption.

    The Task Force recommendation against privatization of retail alcohol sales is based solely on evidence related to public health consequences, which may be one of several factors to consider when making decisions on whether to privatize retail alcohol sales.

  • Brett img 2013-01-31 10:59

    During the broadcast, the question of how will privatization result in higher prices when increased competition should lower it.

    I would like to cite a real life example (garbage service)that illustrates such a scenario. I grew up in Delaware County, in a small town in which the garbage collection was done by the township. A nominal tax was charged for the service, and the township employed full time workers who earned full benefits. We knew all the employees, who held their jobs for decades. And get this, they came up the driveways to collect the garbage.

    Ten years ago I moved to Adams County. The garbage collection was privatized, but only collected by 1 private company, and that company had to bid to win the contract. It employed part time workers with little or no benefits. The cost of trash collection was significantly higher than my previous experience.

    Two years ago I moved to Franklin County with a completely "free market" approach to garbage collection. The best price I could find was still higher than that of Adams County where we did not get a choice of provider. There are at least 4 different trash companies servicing my neighborhood, which means 4 days a week we wake up to the sounds of garbage trucks hauling through the neighborhood, which not only diminishes the "quality of life" albeit minimally, but also uses 4 times the fuel and resources that should be necessary to do the job.

    There is no doubt that the governor is a pawn of Corporate America, and before he's finished we will all end up funding his masters with our blood, sweat and cash.

  • Todd Clay img 2013-02-01 13:15

    Unlimited licenses for grocery stores and mini-markets. Well there's the price setter. No one will be able to compete with these retailers. These retailers already have the money behind them to crumble one store and build another that incorporates a store double in size in a new green field some where.

    But the one thing that won't happen is undercutting prices. Businesses learned a long time ago to not start price wars so they agree to collude and we all lose.

    What we do lose is yet more jobs that can sustain a family. We setup a situation where the business community will be lobbying to reduce the taxes that we collect on alcohol requiring more taxes out of citizen's pockets.

    Limited wine and liquor licenses mean that I have no chance of opening my own store because the costs while be prohibitive and yet grocery stores, gas stations and mini-markets will be able to get all they want. No mom & pop operations at all. They won't be able to afford the licenses. So once again only those at the top get to participate.

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