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Testifiers Urge Panel to Consider Social Harms of Privatization

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A litany of testifiers foreshadowed the potential unintended consequences of liquor privatization during the first of three hearings to be held before the Senate Law & Justice Committee.  “We cannot look at expansion without first exploring how increased alcohol use may affect citizens of our state,” committee Chairman Charles McIlhinney (R-Bucks) explained at the onset. 

While McIlhinney says he wants to ensure ‘smart privatization,’ most testifiers on Tuesday seemed to think the smart move would be to retain state control of retail liquor and wine sales.  “What is the problem we’re trying to solve here?” asked Drug and Alcohol Service Providers Organization of PA president Deb Beck.  “We’re lowest on deaths and number two on revenue produced.  What’s the problem?”  Beck’s written testimony included a long list of sources for the numbers she pointed out to the committee. 

But by the start of the 9:30am capitol hearing many in the room had already received an open letter from the Pennsylvania Manufacturers’ Association that questioned the slanted lineup of testifiers, and pointed to other statistics that show Pennsylvania performing worse than privatized states. 

When questioned by one committee member, Fraternal Order of Police Pennsylvania State Lodge president Les Neri noted that everyone can find a study that justifies their position, but he can speak from experience.  “I’m telling you as a street cop, the guy who’s done the job for 38-years, that the increase in licenses and outlets for alcohol will increase crime.  I just can’t tell you by what statistic.” Neri explained. 

While the FOP opposes the liquor privatization bill that passed the House (HB 790), others on the law enforcement panel did not take a position; they merely pointed to the need for additional resources for manpower and investigations should lawmakers vote to privatize. 

The hearing concluded with a handful of middle and high school students from the Council Rock Coalition for Healthy Youth, who asked the panel to prevent privatization in order to protect Pennsylvania’s future.

Despite the onslaught of criticism his privatization plan received, Governor Tom Corbett released a statement thanking the committee for the hearing and asserting that public safety must be the number one focus of state government.  “The Senate took a first step in bringing Pennsylvania consumers choice and convenience,” Corbett said in the statement.  While the House amended his original plan, Corbett’s been taking a lead role in this year’s privatization debate. 

A second hearing is planned for May 14th and Sen. McIlhinney says a third will be scheduled for early June.  He says all sides of the issue will be heard.

Battle Lines Being Drawn Over Liquor Privatization

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The details of the plan may be new, but the arguments for and against liquor privatization are perennially similar.  “This is an agency that makes money, that continues to make more money every year,” UFCW Local 1776 President Wendell Young IV said while questioning the logic behind dismantling the state store system. 

The UFCW, which represents 3,500 employees at Pennsylvania’s wine & spirits shops, has been on the front lines of the privatization battle for years.  This time around, Young says the governor’s plan would not only jeopardize thousands of family-sustaining jobs, but it would drastically increase the number of alcohol outlets.  “If you think about what he proposed… you could wind up with 20 – 30,000 or more outlets in Pennsylvania selling wine or spirits.” 

As Senator Jim Ferlo (D-Allegheny) did on the Senate floor, Wednesday, Young likens the Corbett plan to the “Wild West” of alcohol sales.    

The expansion of alcohol outlets has some worried about the effects of increased consumption.  “There is a large body of research that shows a relationship between increases in consumption and a whole host of alcohol-related problems,” says Deb Beck, President of the Drug & Alcohol Service Providers Organization of Pennsylvania.  “I don’t think one needs a lot of research to get that.”

Beck says a little inconvenience is a small price to pay, noting that Pennsylvania already has unmet needs when it comes to drug & alcohol treatment programs. 

While it may not be enough to assuage the concerns of privatization critics, Governor Tom Corbett’s plan would address both issues: employees and increased outlets. 

The plan calls for tax credits for business that employ displaced Liquor Control Board employees, education and civil service credits, as well as a new committee to help affected workers find re-employment. 

As for the increased number of alcohol retailers, the governor’s plan tries to balance it with increased enforcement measures.  They include stiffer penalties for selling booze to underage or visibly drunk persons, a requirement that new alcohol retailers must use ID scanners and a 75% increase in funding for treatment programs.    

If Corbett succeeds it would leave Utah as the only state to maintain complete control over its liquor system – from distribution to retail.

Beer Lovers, Break Out Your Checkbooks

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Breweriana collectors from across the country are converging on Lancaster County this Friday and Saturday for a one-of-a-kind auction.  Beer taps, beer signs and beer glasses will all be up for bid… but beer cans are the big draw.  “There’s a number of cans in there that are expected to bring $10, $20, $30 thousand dollars plus,” says Dan Morphy, CEO of Morphy Auctions in Denver, PA.  “Nothing like this has ever hit the auction block before publicly.” 

The 4,000 item collection includes some 500 empty beer cans.  Pictured above is lot #11 from Morphy Auctions’ online bid catalog.  It’s unique because it’s a group of cans; most will be sold individually.   

“The highlight of this sale is a Gibbons Bock beer can, which is one of three known, but it’s also the best example known,” Morphy says.  Its presale estimate is $30 – $50 thousand dollars. 

In all, Morphy estimates the entire collection will fetch $1.5 – $2 million dollars.  “Generally speaking, I’d say the entire market is off 20 – 30% but the best of the best, the rarest of the rare still brings a premium.” 

And that’s what this collection provides.  It’s being sold by Chicago businessman Adolf Grenke, and Morphy says that if it isn’t in pristine condition, Grenke doesn’t own it.

Research: Targeted Intervention can Curb Campus Drinking

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The first few weeks of a semester are critical in shaping college students’ drinking habits, especially for freshmen, but new research out of Penn State is shedding light on strategies to curb dangerous drinking.  The focus is on early intervention strategies, and Penn State research associate Dr. Michael Cleveland was able to categorize drinkers into four sub-groups to analyze their effects.

 The four sub-groups used in Cleveland’s research include: non-drinkers, weekend bingers, weekend non-bingers, and heavy drinkers.  Parent-based and peer-based intervention strategies were applies to samples from each sub-group. 

“Both strategies were associated with baseline heavy drinkers reducing their use,” Dr. Cleveland tells us.  “The parent-based intervention not only had the effect of reducing the use of the heavy drinkers, but it also was effective at preventing non-drinkers from escalating their use.”  Neither intervention strategy made much of an impact on the weekend drinker categories.

He believes the results are promising.  “The right intervention has to be given to the right person, in the right amount, at the right time kind of a targeted intervention approach,” Cleveland explains. 

His study utilized student samples from Penn State and the University of Washington in Seattle.  Cleveland is now in the process of replicating the results using different student samples.

LCB Approves Price Increases on More Than 300 Items

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The Pennsylvania Liquor Control Board has approved requests from suppliers for higher prices.  That means the 18 month moratorium on price increases at state stores, due to the economic downturn,  is coming to an end. 

The Liquor Control Board voted to approve higher prices on 313 items requested by suppliers of those brands.  CEO Joe Conti says suppliers told them they were facing increased costs for raw product and transportation.

Conti says a “no” vote could have affected selection at state stores.  He says certain lines of product may have decided not to be offered in Pennsylvania.  He says while the board understands price is important, selection is also important. He says for most of the items facing price increases, there are comparable products that won’t increase in price.

Prices will increase on 271 items on February 1st. Prices will increase on the remaining 42 items on March 1st. By comparison, the system offers about 30 thousand different types of wine and liquor, with a variety of between 4 and 5 thousand offerings in most of the individual stores.

Conti says some popular brands are affected by the increases, including Crown Royal, Jack Daniels and Bacardi.

Flurry of Bills Signed

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In the wake of all the yearend legislative activity, Governor Tom Corbett signed 23 bills on Thursday.  Perhaps the most controversial new law (SB 732) will hold abortion facilities to the same standards as ambulatory surgical centers throughout the state.  “It is extremely disappointing that Governor Corbett signed this politically-motivated bill into law,” Planned Parenthood Pennsylvania Advocates Executive Director Sari Stevens said in a statement.  “Make no mistake, this new law has everything to do with politics.”

The bill was drafted in response to a grand jury’s tragic and filthy discoveries at one Philadelphia abortion clinic.  Supporters say it’s about safety.  But critics say the costly new regulations will actually close down safe abortion facilities, and ultimately jeopardize women’s health.  This new law takes effect in 180-days. 

Another new law will provide a boost to Pennsylvania’s one-million family caregivers.  The Pennsylvania Caregiver Support Act will increase the maximum monthly reimbursements from $200 to $500, and for the first time open up the program to caregivers who do not live in the same household.  “Here in Pennsylvania we had such restrictive eligibility requirements – one being that you had to live under the same roof – we were leaving about a million dollars on the table every year because families could not qualify,” says Vicki Hoak, executive director of the Pennsylvania Homecare Association.  The Caregiver Support Program is funded through Lottery dollars; it requires no new state spending.   

It’s going to be easier to buy beer on Sunday, with the enactment of HB 242.  Beer distributors will be allowed to be open from 9am until 9pm on Sundays, compared to the previous noon to 5pm restrictions.  “The legislature recognized that consumers are shopping at different hours, outside of traditional hours,” says Pennsylvania Malt Beverage Distributors Association President Mark Tanczos.  HB 242 will also allow restaurants to start serving alcohol earlier on Sundays, in order to accommodate the Sunday brunch crowd. 

Some of the other bills signed on Thursday will reauthorize Philadelphia’s Automated Red Light Enforcement System, enact a capital budget for the current fiscal year, and codify the new congressional maps.

Capitol Rotunda - Facing House Chamber

New Department in Limbo

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The first new state department since 1995 was to be created in July, under Act 50 of 2010.  To date, however, the Corbett administration has not taken the steps to establish a new, cabinet-level Department of Drug and Alcohol Programs. 

Budget Secretary Charles Zogby appeared before the House Human Services Committee to explain the delay, and testified that financial pressures make the change impractical.  Zogby notes that current finances warrant a look at the consolidation of departments, not the creation of a new one.  “We are going to have to think fundamentally different about how we deliver state services in this commonwealth,” Zogby says. 

Both the minority and majority committee chairmen think otherwise.  “There are huge costs in human suffering, crime, lost work productivity and increased health care as a result of leaving addictions untreated,” says Democratic Chairman Mark Cohen (D-Philadelphia), who says inaction will not save money.  “The argument by talking about all the budget pressures you’re under, I think you’re making a perfect argument about why we need this new department,” adds GOP Chair Gene DiGirolamo (R-Bucks). 

Pennsylvania currently has a Bureau of Drug and Alcohol Programs within the Department of Health.  The new law would elevate that bureau to a cabinet-level department.  Supporters say a central agency will better coordinate treatment and prevention efforts.  Zogby counters that better management of the existing 25 state programs that address addiction could accomplish the same goals.

Gov’s Office Releases Liquor Privatization Study

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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.”

PLCB Holds the Line on Prices Again

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The Pennsylvania Liquor Control Board will hold the line on prices this summer.  The board has rejected more than 400 price increases requested by its suppliers. Chairman Patrick J. Stapleton says it was just not a good time to raise prices on consumers, who have already been facing higher prices at the supermarket and gas pump.  

Stapleton says that after looking at the numbers and the buying patterns of Pennsylvanians, it was clear that consumers could not sustain any price increases at this time. He says customers are continuing to “buy down”, picking up cheaper items. 

Stapleton says maintaining current shelf prices ensures people can enjoy their favorite wine or spirit without sacrificing the family budget.

Stapleton says the board  also gave consideration to its licensees, such as restaurants and other establishments, who are just finally starting to pull out of the recession.     

Stapleton says the board will take another look at the issue in three months, because price requests are usually submitted quarterly. The PLCB had earlier implemented a moratorium in November, while also maintaining its own operational costs.

PNC Park

Beer in the Bleachers: Enjoy Responsibly

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The Pennsylvania Liquor Control Board (LCB) calls on sports fans to keep game days safe, and enjoy responsibly.  The message comes amid a growing number of reports of alcohol-related incidents at sporting events across the country.  Specifically, spokeswoman Stacey Witalec cites the near-fatal beating of a San Francisco Giants fan at the LA Dodgers home opener.  “Excessive use of alcohol may have been a contributing factor,” Witalec says.

In a statement, LCB chairman PJ Stapleton said safe and responsible consumption should be fans’ top priority.  “As a fan, you owe it to yourself, and to the family sitting next to you, to ensure they can leave the ballpark as safety as they arrived,” he continued.

Witalec also points out a University of Minnesota study that looked into fans’ behavior.  “8% of people were legally drunk, and 40% had something to drink while they were in the stadium.  So some concerning statistics.” 

For its part the LCB is reaching out to Pennsylvania’s colleges, major and minor league teams to help educate fans, and ensure they know their limits.  Witalec tells us the goal is to “start the conversation” about what changes need to be made to protect the families attending sporting events.