Supply And Da Man
Pennsylvania's governor, Tom Wolf, vetoed a bill allowing liquor privatization, claiming that the state monopoly...benefits consumers!
Welcome to the fantasy view of the nanny state and basic economics.
Jacob Sullum blogs at reason that the governor claimed that competition would raise prices!
He also worries that letting private businesses sell beer and wine would result in "less selection for consumers."According to the Pittsburgh Post-Gazette, Wolf and his fellow Democrats "warned that prices would rise as private businesses sought profit." In other words, private merchants will jack up prices because they want to make money--unlike the Pennsylvania Liquor Control Board (PLCB), which seeks only to raise revenue. If you think those two motives sound pretty similar, you are smarter than Pennsylvania's governor, who fails to recognize that the relevant difference between these two models for distributing booze, when it comes to how high prices can be raised, is the presence or absence of competition. Other things being equal, more competition leads to lower prices, so it is hard to see why Pennsylvanians would have to pay more for a bottle of whiskey if the state monopoly were replaced by profit-driven businesses competing against each other.
If you compare the prices charged by the PLCB to the prices charged by, say, Total Wine & More across the border in New Jersey, you'll find that customers generally pay more for liquor in Pennsylvania: for example, just picking three products I often buy, $30 vs. $25 for Bulleit rye whiskey, $52 vs. $44 for 10-year-old Ardbeg Scotch, and $44 vs. $37 for Herradura reposado tequila (all in 750-milliliter bottles). Total Wine also has a bigger selection: 354 varieties of Scotch, for instance, compared to fewer than 100 at the PLCB. Is there any reason to think Total Wine could not offer similar prices and variety to Pennsylvanians?








I will bet, sight unseen, that PLCB employees are unionized.
Here in MI, every single party store advertises that they sell liquor as "state minimum", the minimum price set by the LCC. But if you introduce competition, that would suddenly make everybody charge more? What a maroon.
Liquor is very-much like gasoline - a commodity product sold in fixed volumes to a known standard. A bottle of Jose is a bottle of Jose, wherever you buy it. And gas stations fight price wars over pennies per gallon - freed from state monopoly control, liquor stores would do the same, which can only be good for consumers.
llater,
llamas
llamas at July 4, 2015 4:09 AM
PA has some of the dumbest alcohol regulations in the entire country. You can't buy beer unless it's in a restaurant/bar, beer store, or beer distributor.
The state-controlled wine and spirit stores cannot sell beer.
This kind of thing benefits who, exactly...?
DrCos at July 4, 2015 5:05 AM
"This kind of thing benefits who, exactly...?"
Well, I'd say the restaurant/bar owners and the beer stores benefit. But that's just an offhand guess.
dee nile at July 4, 2015 6:10 AM
I was amazed, after living in New York, to move to California and to find wine sold in the supermarket and Trader Joe's.
Amy Alkon at July 4, 2015 6:13 AM
'Wolf and his fellow Democrats "warned that prices would rise as
private businesses sought profit."'
It may be true. It all depends on how Pennsylvania taxes liquor
after the privatization. Competition tends to keep prices as
low as they can get under the circumstances. The circumstances
between PA and NJ may not be similar if PA gets tax greedy.
This could easily happen. For gas taxes, PA has the highest
rate in the nation, NJ is second-lowest.
http://www.usatoday.com/story/money/business/2015/01/20/24-7-wall-st-state-gas-taxes/22056799/
Ron at July 4, 2015 6:35 AM
Amy, what amazed me when I visited California way back when (I'm from the East Coast) were the drive-through liquor stores. How cool was that!
If I recall it was in the LA area that I first saw those. Do they still have them?
charles at July 4, 2015 6:37 AM
Both of those prices for Ardbeg are very good, by comparison with the $70 or so that it costs out here on the High Plains.
Fortunately, Laphroaig can be had for $50 or so, but Lagavullin is $100 here. I wonder what the cause of the disparity is?
the other rob at July 4, 2015 6:40 AM
Regarding PA's draconian and asinine liquor laws, one must remember that they were, and continue to be, promulgated to continue prohibition. The supporters insist that public safety is enhanced by the system......bovine scatology.
Also, the state store system is a "jobs" program, union "jobs " for the politically connected. There recently has been a loosening of the soviet styled system in an attempt to fool the folks into keeping the state liquor monopoly. The beer distribution system is only marginally better. It's still a monopoly in practice and design. Those fortunate enough to live near a border routinely cross those borders and shop at far better stocked and far friendlier staffed businesses.
Lest you think I exaggerate, the gestapo, er, state liquor control board periodically monitors shoppers in out of state liquor and beer establishments, stops PA residents, and confiscates their purchases as well as fines them. One would think that PA adults are incapable of controlling their drinking habits.
This is the same government that routinely imprisons politicians and bureaucrats for theft, graft and corruption. They seem unable to control their criminal impulses.
Edward Lunny at July 4, 2015 7:45 AM
And Llamas is absolutely correct. The State Stores ARE run by Union Worker. And selection ?? When I lived there, I tried to order some relatively minor Scots and Irish whiskeys.
I was told that they were not available, due to "lack of demand". I then replied with, "What is an order, if not demand for a product?"
The reply was classic union: "Insufficient Demand to make it worth the effort. . "
Keith Glass at July 4, 2015 7:55 AM
A few years ago Washington state privatized alcohol sales and cost went up.
"In Washington, a gallon of alcohol costs about $35. Compare that to two years ago when it cost $27 before it was privatized. Washington's liquor prices are currently the highest in the country..." from http://www.krem.com/story/news/local/spokane-county/2014/12/11/liquor-privatization-in-washington-hits-small-shops-hard/20237007/ (warning - auto play)
From what I remember from an article some time ago the problem was the state didn't want to not get their money so taxes went up...then there was more layers making profit - the state part got replaced by at least two separate companies - distribution and retail.
The Former Banker at July 4, 2015 8:55 AM
What he meant to say was it benefits the wholesalers, who contribute large amounts to his campaign fund.
Depression era grocery price controls and the government's attempts to shut down the low-price grocery of the time (A&P) were claimed to be beneficial to consumers.
What they actually benefited was the grocery wholesalers.
No wonder people joke that if you asked 100 economists a yes-or-no question, you'd get 100 different answers.
==============================
I was amazed, coming from Florida, to find whiskey and gin in the grocery store.
My wife and I recently visited my family in North Carolina and compared prices. A bottle (1.75) of name-brand alcohol in California is roughly $26 at any grocery store. At the NC ABC store, it runs almost $40.
And good luck finding a non-mainstream brand. If you're not buying a widely distributed brand, you won't find it at the ABC.
I guess the NC government is looking out for its consumers moe than the California government.
Conan the Grammarian at July 4, 2015 9:01 AM
Government economics says that if you sell 1,000 bottles at $40, the government makes $40,000 (that includes the state's liquor taxes). However, if a private company sells 1,000 bottles at $26,000, the government makes only what it taxes each bottle. Therefore, the government refuses to gat out of the way of private sales.
Yeah, because government never raises the price on anything to the detriment of the public.
Anyone been watching as traffic fines are going through the roof - all so the government can raise more revenue?
Conan the Grammarian at July 4, 2015 9:13 AM
I was amazed, after living in New York, to move to California and to find wine sold in the supermarket and Trader Joe's.
I was amazed, moving out of Utah to find booze of every kind sold in every goddamn gas station and grocery store in Arizona
lujlp at July 4, 2015 9:23 PM
Amy Alkon
https://www.advicegoddess.com/archives/2015/07/supply-and-da-m.html#comment-6093110">comment from lujlpThey asked me on the NPR station in Utah, then had to tell me they couldn't have me on unless they called me "the writer of a book on manners," because they couldn't even say "Good Manners for Nice People Who Sometimes Say the F-Word," as most radio stations do.
Amy Alkon
at July 4, 2015 10:39 PM
Highly recommend Mark Gevinson's book, The Great A&P if you want to understand how the grocery industry changed. And if you want to read about how the government tried to stifle a chain that brought lower prices to consumers by arguing that lower prices were bad for consumers.
http://www.nytimes.com/2011/09/07/books/the-great-ap-by-marc-levinson-review.html?_r=0
Conan the Grammarian at July 5, 2015 11:19 AM
That's Mark Levinson.
Conan the Grammarian at July 5, 2015 11:19 AM
Leave a comment