The end of a monopoly?
Published: February 28, 2013
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It’s a move that’s been talked about for years in Pennsylvania, but Gov. Tom Corbett renewed his fight last month to privatize the state’s liquor stores.
The plan would put in private hands the entire state system, meaning the state would auction off 1,200 licenses to grocery stores, beer distributors and other businesses in an effort to expand and change the way liquor is sold in Pennsylvania. The money — in the tens of millions of dollars — would fund the education system. The sale of the licenses, called the “Passport for Learning” block grant, would provide an additional $1 billion investment in education.
“I think the question is, ‘Why haven’t we done it before?’” said Charlie Gerow, spokesman for the Coalition to End the Liquor Monopoly, a grassroots movement to end “state stores” in Pennsylvania. “It should have been done 50 years ago, but unfortunately Pennsylvania has lagged behind other states.”
Other than Pennsylvania, Utah is the only other state under a similar model.
There are 613 state-run liquor stores in Pennsylvania with more than 5,500 workers (full and part-time). In 2012, the overall impact of the state-run liquor business was more than $400 million, according to the state.
Gerow said his group is a completely volunteer effort that has yet to raise any money but is hoping to morph into a lobbying effort. He said he hopes to raise money, noting he has had more than 1,000 people who have signed on to help.
“The state controls both the wholesale and the retail liquor in Pennsylvania. It’s a weird combination of prohibition and socialism. It’s an absolutely archaic and antiquated system that has cried out for a long time for privatization.”
Gerow said it’s time for change.
“We’re going to support the concept of getting the state out of the liquor store business,” said Gerow. “We think it’s great for the economy and it brings Pennsylvania into the 21st Century.”
The top business group in Pennsylvania supports the plan.
“We’re supportive of the governor’s proposal and we’re supportive of increasing consumer choice of the sale of wine and spirits throughout the commonwealth,” Sam Denisco, vice president of government affairs, Pennsylvania Chamber of Business and Industry. “The more expansive it can get along with providing the requisite funds into the general fund is very worthwhile and it’s something that we really support.”
Denisco said the time is right.
“I think in addition to the governor, there’s been significant dialogue amongst the members of the General Assembly, specifically leadership for the proposal. Over the years, we’ve seen a slight expansion with over 150 grocery stores selling beer.”
He said competition makes everyone better, adding that surrounding states have an advantage.
“It’s been a clear goal of this governor to make Pennsylvania more competitive. I believe our legislative leaders think the same way and this is one way to become more competitive with our other states.”
Overall, Denisco said Pennsylvanians will notice a clear difference.
“It’s going to mean more choice for consumers and more convenience for consumers and it’s going to allow more businesses to compete,” he said. “What we’re doing is putting this product into the private marketplace. This is a capitalist society and we let the free market open up competition and it’s very healthy. It’s one of the core principles of business advocacy.”
“This is a very ambitious proposal that is very comprehensive, but I think it’s well worth the time and effort,” said Denisco.
The Keystone Research Center, a Harrisburg think-tank, said the proposal could cost the state revenue and based on their research would mean more people dying in traffic deaths due to alcohol.
“The proposal could cost the commonwealth revenue that won’t be invested in education, health services and a stronger economy,” said Stephen Herzenberg, Ph.D., an economist and executive director of KRC in a statement. “It will also radically increase alcohol accessibility and the resulting social costs.”
The KRC said in a statement that the governor is trying to “fix a system that isn’t broken.”
“Privatization of these assets is nothing but a giveaway for Gov. Corbett’s corporate friends,” said Wendell W. Young IV, chair of the United Food and Commercial Workers of Pa. Wine & Spirits Council in a statement. “Our state treasury is stronger because of our Wine & Spirits shops. Our communities are stronger, as well. We have an opportunity to work together to improve both of these assets, and it’s time for Gov. Corbett to put right-wing ideology aside and work with lawmakers for the benefit of all Pennsylvanians.”
A recent poll released by the Commonwealth Foundation, a Harrisburg conservative think-tank found 61 percent of Pennsylvanians favor privatizing the liquor stores. The study was done by a California research firm.