Gov’s Office Releases Liquor Privatization Study

The long-awaited and near 300-page analysis from the PFM Group concludes that privatization would improve the current liquor sales system and benefit Pennsylvanians financially.  PFM says it’s possible to structure a fiscally neutral system, while delivering an upfront windfall of $1.1-billion to $1.6-billion.  That’s a small number to privatization critics.  “It’s going to cost thousands of jobs in Pennsylvania,” says Bill Patton, spokesman for House Democratic Leader Frank Dermody (D-Allegheny).  “It does not raise the kind of money that its proponents claim.” 

Money isn’t Governor Tom Corbett’s biggest gripe with Pennsylvania being one of only two states that control all aspects of the wholesale and retail distribution of wine and liquor.  “I don’t care how much it is, we need to get out of the business completely,” Corbett said on Radio PA’s monthly Ask the Governor program.  Corbett also expressed dismay with the Pennsylvania Liquor Control Board’s ubiquitous advertising campaigns.  “The LCB controls and regulates alcohol,” Corbett says.  “When we advertise, we’re encouraging people to drink more.  We shouldn’t be doing that.”   

Governor Corbett favors a privatization model that limits the number of retail outlets in PA.  Under that approach, the PFM report suggests some minor price increases based on a fiscally neutral system.  The report goes on to suggest that competition in highly-populated areas would mitigate any prices increases.  “Even if you believe that competition will drive down prices… you’d end up with only 18-counties that are winners versus 49 losers,” says UFCW Local 1776 President Wendell Young.  “In order to match the revenues we already have today, taxes are going to go up and consumers will be forced to pay more.” 

The starting point for liquor privatization talks going forward will be House Republican Leader Mike Turzai’s proposal.  Turzai stresses that PLCB expenses are growing much faster than its revenues.  Turzai says, “It is time to sell Pennsylvania’s state liquor and wine stores.”