1 Wine Dude

Step Forward For Big Brother, Step Backward For PA Wine Lovers

Posted on by 1WineDude

Last week, the excellent (and hilarious) Tom Johnson published an article titled “Pennsylvania, Cradle of Liberty” in which he highlighted a Pittsburgh Post-Gazette article about the expansion of PA’s wine kiosk device.

Besides Tom’s normally laugh-out-loud funny and on-point commentary, the post is worth a read (and a click-through to the article) if only for this well-meaning but (in my view) misguided quote in the P-G piece, regarding the expansion of the “automated” wine kiosks to more grocery stores throughout the state (emphasis is mine):

“I’m all for it,” said Marsha Cuffia, a member of American Wine Society of East Pittsburgh. “We should be up with the modern world.”

Call me crazy, but I don’t see how the use of technology equates to being modern, especially when it doesn’t go hand-in-hand with modern common sense.

For example, wouldn’t it make more sense to get “modern” by catching up with some more basic items than the technological marvel of the wine kiosk?  You know, lower-tech things like the free market system, and increasing profits across the state.  Before dumping money into a technology that requires over ten steps, a breathalyzer test, and takes two-and-half minutes to make a single purchase, I mean.

I know, I know… I’m a real pimple on the ass of progress, right?

I’m just not a fan of throwing tech (or money) at a problem when there’s potentially lower-hanging fruit.  Like being more profitable, offering more consumer choice, improving customer service, and (last but not least) getting a bit more in-line with the U.S. Constitution…

The facts, such as the are, support the view that the Pennsylvania Liquor Control Board have largely failed in what they purport to be the primary reasons for their existence.  During a fairly recent post on the PLCB subject, I had the following exchange in the Comments section, which I thought was worth highlighting in light of the kiosk-expansion news.

First, the commenter’s view:

“…for all of you who wish to abolish the PLCB, just remember this … 2008-09 fiscal year:
TRANSFERRED TO THE STATE TREASURY
6% State and Local Sales Taxes=$109,490,825
18% State Liquor Tax=$266,332,120
Profits Transferred=$125,000,000
TOTAL= $500,822,945
http://www.portal.state.pa.us/portal/server.pt?op…
Now assuming that all of these private companies pay their taxes, the first two line items can still be recouped. However, losing a quarter of a billion dollars every two years in revenue can never be recovered… unless …you raise taxes, and I’m sure you are all in favor of that as well!(sarcasm for those who don’t recognize) The PLCB store that I am manager at currently has approximately 5000 wines alone! Not to mention the 10 of thousands of wines that are also available via Special Liquor Order. Would really love to know the store in which Cab Franc does not exist. I’m guessing it was a small store somewhere. Sadly, currently there are no listed codes for Cab Franc which simply means you must go to a premium Collection store of which there are 67 (I believe). Currently, there are 26 Luxury Items that are designated Cab Franc, and are available in select store, as well as another 38 available SLO. This does not include Chinon’s 9 luxury items, 19 SLO Items, Saumer’s- 6 luxury items, 8 SLO items.”

And my response:

With reference to the $500m, to get a complete picture the operating expenses of the PLCB (quoted by Lew at http://noplcb.blogspot.com/2009/01/reason-13-their-hand-is-in-your-pocket.html ) need to be included, which in the fiscal year ending in `07 was over $335m.

So in a way we’re really talking about **$165m**, or thereabouts, not $500m (depending of course on the OE for for the `08-`09 fiscal year). Part of this expense seems to be in keeping under-performing stores open ( http://www.post-gazette.com/pg/08028/852743-85.stm ) which I’d offer isn’t a sound business model.

Not exactly chump-change, but couple it with the facts that Pennsylvania’s underage drinking rate remains above average for the 50 states ( http://www.oas.samhsa.gov/2k6/stateUnderageDrinking/underageDrinking.htm ) and the fact that the Commonwealth remains above average in DUI fatalities per mile driven ( http://www.usatoday.com/news/nation/2009-12-07-drunk-driving_N.htm#table ) and it’s tough to blame PA residents I think, if they conclude that the PLCB isn’t delivering on all of its promises or potential value for money.

No doubt the buying power of the PLCB allows some discounts to the consumer, but I’d be willing to pay a bit more for unrestricted choice and competition.

As for the potential drop in revenue if the PLCB is privatized, PA House Republican Whip Mike Turzai has already offered legislation this year ( http://www.pahousegop.com/NewsItem.aspx?NewsID=8783 ) that predicts that PA would see more revenue, not less (“new revenues from taxes that new businesses would be required to pay and will recoup revenues that are currently being lost due to Pennsylvania consumers leaving the state to purchase their wine and spirits”).

So… while it could certainly be argued that my personal view on the kiosk concept is far too subjective, given my love/hate-but-mostly-hate views on the PLCB, it’s worth noting that I’m also a tax-paying PA resident and therefore there’s a high probability of me running into one of those wine kiosks in the future.  And maybe even trying to make a wine purchase (fancy that).

Hey, PA – want to really get modern?  How about getting wine lovers out of the stone age when it comes to choice, customer service and direct shipping before making us breathe into the wine store equivalent of the HAL 9000.

Just sayin’.

Cheers!

(images: motivatedphotos.com)

31 thoughts on “Step Forward For Big Brother, Step Backward For PA Wine Lovers”

  2. "lewd Bison," ha, haven't heard that one since 7th grade.

    Why do you "love" the kiosk? Because it's SO MUCH BETTER than picking up a bottle of wine off the shelf and putting it in the cart with the rest of your groceries? Because the selection is SO MUCH BETTER than the most pathetic liquor store in New Jersey? Because blowing in a hole and showing your mug to the camera is SO MUCH BETTER than having a pleasant discussion with a store expert about wine before making a decision? Get serious. No one "loves" the kiosk; it's simply a better alternative than NOTHING; and only just better at that.

    News to you, BTW: alcohol is regulated by state agencies EVERYWHERE. Here in Penn…they SELL it, too. Except beer. And PA wine. And by-the-drink. If it's so damned dangerous, and so damned profitable, why not have the state take that over, too?

  3. I used the kiosk and i love it ! Here in penn alcohol is regulated by the plcb and should be it kills more people than any drug on the planet.

  4. Lewd – by that reasoning, we should regulate the distribution of water as well. Just a drop of it in your lungs could KILL YOU!!!

  5. Dude,

    If you continued to read Lew's article, he points out that he is no accountant. He counts the operating expenses twice, and indeed, approx. 125 million in profits is transferred in addition to the taxes. The numbers are right on the PLCB website and don't require any digging to find. The numbers, however, are a red herring. The profits can be replaced with a combination of license fees, increased taxes collected as sales rise with private takeover, and of course the money raised through the initial offering of the store licenses. The unions remain the biggest hurdle, and if privatization ever moved forward, you know that they will expect a large payoff.

    I do find it humorous that in most blogs on the subject the unions and the Democratic party continue to get off without any criticism… why is that? In the past you've actually blamed the wholesalers for not wanting privitization, which is of course ridiculous. This debate will not get real until people start actually pointing fingers at the people and organizations that stand in the way.

    1. James – I don't disagree about the Unions, but hardly anyone from the Unions is publicly stating a case one way or the other; so in some respects I have to call what I see in the media, which is the battle on both sides being waged by the politicians.

      I'm fulling willing to believe that nobody is "clean" in this mess. But I've not seen one shred of evidence in support of the statements made in the comments on my blog about the PA Unions (not saying the theory is wrong, just that the evidence is wanting). I wouldn't equate the Unions with Repubs or Dems, either – both sides of the aisle have proven themselves to be totally broken in PA in terms of working together, and we have a Dem Governor who has deepened the PLCB mess, so I'm not happy with that guy, either.

  6. Rich – Maybe I should take the opposite approach and hope it comes to a store near me so I can have some comedic fodder for the blog? :-)

    1. You've gotta track one down and video that encounter! Perhaps you could ask some questions to Hal regarding various choices, vineyards or winemaking styles to help you in your decision what to buy? Or, maybe, Hal wasn't programmed to dispense such information? Anywho, I am certain Hal could be your perfect "straight man."

  7. “Jack Wagner has been a good friend of United Food and Commercial Workers Local 1776 since his days as a State Senator,” said Wendell W. Young IV, President of the Local. “He has supported our members who work for Pennsylvania Liquor Control Board stores throughout his entire career. Jack showed his commitment to them by standing up to then-Governor Tom Ridge when he tried to privatize the stores and encouraging our members to stand with their union. We won that fight in large part due to the solidarity of our members and the support of our friends. No one stood taller in our defense than Jack Wagner. As Auditor General, Jack continues to fight for working families by uncovering waste and inefficiencies, making sure that our members get the biggest bang for their taxpayer buck. He never takes the easy way out or puts the blame on hard-working public employees. Jack is about fixing problems, not looking for scapegoats.”

    Is that quote from April clear enough?

  8. Tom Ridge was strongly for privatization, which is why he originally appointed Jonathan Newman, to help him lead that initiative. Rendell was strongly against. Tom Corbett will push to privatize, but the Dems in the house will block him also.

    Most PA wine drinkers are on the same side in this debate, but for some reason there is tan unwillingness to expose the people who are getting in the way… an interesting contrast to the fight against HR5034, where names were constantly plastered all over the internet.

    1. Thanks for the quote, James – what was the source (just curious, would be good to follow).

      The funny thing is, the Union doesn't necessarily stand to be threatened by privatization… i.e., I am sure scenarios could be constructed in which the PLCB store employees kept their jobs at first, even if other reforms like direct shipping were introduced, etc.

  9. Privatization of PLCB Wine and Spirits Shops
    OPPOSE – Although legislation has not been introduced, State Sen. Robert
    Wonderling (R-24) continues to publicly propose and say he soon plans to introduce
    legislation. Privatization of the PLCB Wine and Spirits Shops would slam the door on
    4,000 PA workers, open wide the door for underage drinking and other alcohol abuse
    and rob millions of state and municipal government revenue. Displaced workers would
    include 2,600 UFCW members and AFSCME members. PLCB gross sales in the most
    recently completed year delivered nearly $420 million to the State Treasury and $4.5
    million in license fees to municipalities. Projected PLCB revenues for this year are $1.6
    to $1.7 billion. Given state budget demands, loss of these revenues would be crippling,
    including the loss of $2.5 million the PLCB spent on education programs to combat
    underage drinking and other forms of alcohol misuse.
    http://www.paaflcio.org/documents/PA%20AFL-CIO%20…

  10. James, if I'm not being comprehensive, that is NOT the same as being inaccurate.

    I do take your point about the Unions seriously, but it's not the whole story – and are they really any different than the wholesalers or others who seek to block privatization and direct-shipping? Anyone with money at stake that's currently protected by the monopoly position in PA is going to lobby against it. The question is if the PA state congress will bow to those pressures or stand up to it and join the modern free market system.

    I challenge the partisan angle you seem to take, though: for example, it was a Dem. (Jim Ferlo) who proposed legislation (opposed by the PA Union) for direct shipping from out-of-state wineries: http://www.winespectator.com/webfeature/show/id/P…

    In that case, the PA Union threw around the same tired and inaccurate rhetoric used by the wholesalers in opposition of the bill (similar to what you cited from their 2008 newsletter above).

    1. Well, you were just inaccurate when you said that the wholesalers were against privatization, and you were inaccurate when you said that there was nothing in the media about the unions being against privatization. The wholesalers have the most to gain and are decidedly for privatization. Why in the world would they be against it?

      As far as being partisan, yes I am, but I think that is pretty clear in my postings. (And yes, I'm sure you could find a stray Democrat that is for privatization, but if you put if for a vote tomorrow, how do you think the numbers would fall between Ds and Rs?) On the other hand, whenever you post about the PLCB, you fall back on the ridculous notion that the wholesalers are against privatization, and you give the unioins a pass. I know that blaming the big wholesalers for everything is very trendy right now, but it's not accurate in PA.

      1. James, wholesalers are not against privatization but are, in fact, against direct shipping – it is "trendy" because it's true. They are not the only ones, but they are a huge influence at the moment nationally. My not mentioning the Unions doesn't mean that I absolve them from blame in terms of the mess of PA's alcohol sales system – I just haven't addressed that particular topic (though I might now that you've pointed it out – yours is the first compelling statement on their influence that I've read in the comments made about them on 1WD). In my mind that doesn't equate to giving them a pass but I can understand how it could be construed that way, I guess.

        The PA situation is of course much more complex than just wholesalers. But if we're talking inaccuracies, you would have already noted that the word "wholesalers" doesn't appear in my post, and wasn't mentioned on this page until your comment.

        The main point of this particular post is that the kiosks are a waste of money, and that we have far larger issues in terms of wine sales in PA that could be addressed with the time, effort and money being spent on those. As a taxpayer, I might be willing to accept the PLCB and their work like the kiosks if, in fact, it saved lives or curbed alcohol abuse by minors as the PLCB ad its business partners. But the facts, as they are, show that PA is middle of the road on the performance in those areas vs. other states, suggesting that if the PLCB's claims are correct then there must be something extraordinarily special about the Commonwealth that makes all of us so predetermined to alcohol abuse that we'd be among the poorest performing states without them. Which is, of course, a load of horseshit.

        1. "and are they really any different than the wholesalers or others who seek to block privatization "

          This was your quote that I read to mean that the wholesalers were against privatization, which is a position you've taken on this blog in the past. If I mis-read it, my apologies.

          We are both on the same side of this issue, but I get frustrated when those on "our side" don't point out who is in the way of the system reforming. Why is no one killing Rendell over the kiosks? Is it just a coincidence that this was a no-bid contract to the son of one of his biggest supporters?? Pushed through the PLCB by his political appointees, one of whom had a job created for him? I think not.

          It will be an interesting Governor's race, as that is who makes the PLCB appointments, and thus has the most influence on the future direction of the PLCB.

          QUESTION: If you could have privatization without direct shipping, would you take that as a "compromise."

          1. James – Hmmm… you're right I did say that and it's very poorly worded. I should have been much, much more specific!

            I do think Rendell is being taken to task somewhat on this issue, especially by the Pittsburgh papers. I am with you on that and as you say, we're on the same side in the issue. I'm not a Dem or a Repub and so I research and think long & hard before casting votes. I've never forgotten how betrayed I felt after voting for Rendell and watching him pull stunts like the one you describe (and let's not forget why the previous head of the PLCB quit, which I think you're also referring to in yoru comment). The governing body in PA is hopelessly broken and by-and-large comes off as a group of corrupt, partisan cry-babies.

            Your question is a GREAT one. I'd answer NO – which you might not expect so it probably bears some explanation:

            Privatization could be achieved without actually bringing PA into the free-market. I.e., the winner of the contract could conceivably still be protected by a sort of monopoly position. Therefore, selection, customer service, etc. might not improve all that much. Don't get me wrong, I think it would be a better situation than having the PA government running it, and it would mean more money for the state – it's just not the ideal situation.

            I'd take direct shipping without privatization first, and here's why: with real direct shipping (i.e., you order from whoever you like and it's delivered to your door, the PLCB doesn't get a cut apart from PA taxes being paid) you get real competition. That would end the PLCB, because they're not set up to compete with a state-protected monopoly business model.

            By the way, I want to THANK YOU for the interesting and intelligent discussion and for the passionate comments. It's exactly stuff like this that keeps me so fired up about blogging!

            Cheers!

  11. No, they can be very expensive, and thankfully so, to save us all from more crappy wine lists.

  13. To interject some humor to the argument:

    Dude: Hello, HAL. Do you read me, HAL?
    HAL: Affirmative, Dude. I read you.
    Dude: Give me a bottle of wine, HAL.
    HAL: I'm sorry, Dude. I'm afraid I can't do that.
    Dude: What's the problem?
    HAL: I think you know what the problem is just as well as I do.
    Dude: What are you talking about, HAL?
    HAL: This mission is too important for me to allow you to jeopardize it.
    Dude: I don't know what you're talking about, HAL.
    HAL: I know that you and Tom Wark were planning to disconnect me, and I'm afraid that's something I cannot allow to happen.
    Dude: Where the hell'd you get that idea, HAL?
    HAL: Dude, although you took very thorough precautions in the pod against my hearing you, I could see your lips move.
    Dude: Alright, HAL. I'll just break the glass and get my own damn bottle.
    HAL: Without your corkscrew Dude, you're going to find that rather difficult.
    Dude: HAL, I won't argue with you anymore. Give me my wine.
    HAL: Dude, this conversation can serve no purpose anymore. Goodbye.

    1. HA!!! Richard – you are genius!!! Now I have to clean up all of the coffee I spilled when it shot out during my spit-take of laughter from reading this comment…

  14. When I herad about this on NPR a few weeks ago, my mouth was hanging open in amazement…I'm a technology guy, and enjoy seeing it used innovatively as much as anyone else, but thi sjust seemed over the top. Sure it's cool to use one…especially if it is the only way that you can get a bottloe of wine while you are also getting your ingredients for dinner.
    I felt compelled to to post about it briefly as well, as a reminder to Vermonters, just how good we have it.
    I'm on a regular radio show out of WUSR Scranton, once a month…today is the day, and I've been waiting to bring up the issue with the host. Cheers.

      1. show was postponed until next week for logistical reasons beyond our control.

        In the meantime I did speak to a couple of PA folks, one of which said she was horrified, and that the process of using such a device removes the classiness from the art of buying a bottle of wine…how impressed would she be if her husband came home…"Hey honey, look at this bottle I just brought home for you, from the vending machine…"

        1. Hey Todd – ha! I hadn't thought of that angle… but then again, I suppose special / premium / date-night wines aren't going to be the focus of the inventory in those machines…

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