Letter to the Editor: The State Needs Out of the State Store Business
Please allow me this opportunity to respond to a submission from the Independent State Store Union that leveled several mischaracterizations about legislation to remove state control from the sale of wine and spirits in Pennsylvania.
As you may know, House Bill 446 was historic in that this is the first time in more than 80 years that both chambers of the Pennsylvania General Assembly approved legislation to privatize the state store system – a relic from the 1930s designed to make alcohol as difficult and expensive as possible to purchase. For more than eight decades, despite consumer calls since the 1970s to do so, our liquor system has remained one of only two in the nation to have this complete control over both the wholesale and retail operations of alcohol. Added to the antiquated system is the fact that the same agency regulating the sale of alcohol also seeks to boost its sales.
Sadly, the governor vetoed this legislation on July 2, taking us back to square one when it comes to responding to the consumers who have repeatedly told us that the state should not be in the alcohol business.
I appreciate the state store union providing you with its perspective, as its members have a vested interest in the outcome of this legislation. But so do all of you. Allow me to add a bit more context to the discussion.
Critics of privatization have been pointing to the struggling model in the state of Washington, which is the most recent state to privatize liquor and wine sales, as why Pennsylvanians should not favor House Bill 466 – even though our proposal was vastly different from the one on the West Coast. In fact, part of the Washington plan included steep hikes in alcohol taxes, whereas taxes in Pennsylvania would remain the same, and the state would pick up hundreds of thousands of dollars more in revenue from residents who would stay within our borders instead of traveling out of state for their purchases.
I fail to see the logic that a privatized system would lead to worse selection, more expensive prices and inconvenience. In fact, in rural areas such as ours, the state stores would only close if there are twice as many private outlets serving our population.
Also consider that beer distributors would be the very first to have a chance for the licenses to sell wine and liquor. Only after these distributors have the first chance would other retailers be allowed to enter the license auction, thereby limiting the number of big-box stores competing for licenses. I don’t fear losing out to the big box store as there’s only one in the 63rd District.
My education and experience have taught me that the private sector does a far better job in the marketplace than government. When competition enters the market, private enterprises compete for business. They’ll offer expanded hours, competitive pricing, and in many cases, varied selection. Right now, in our current state stores, bottles of wine could sit on shelves and collect dust for months, whereas private stores would be able to sell the most popular brands, including locally produced selections from area wineries and distilleries. Wouldn’t it be nice to buy a bottle of R** Bandana, Foxburg or Deer Creek wineries’ products at the grocery store?
In the days after the governor’s veto, many business and economic experts, along with both in-state and out-of-state editorial writers, are scratching their heads about why a governor who touted his private business experience would veto such landmark, pro-consumer legislation.
I think we all know the reason.
Submitted by Rep. Donna Oberlander (R-Clarion/Armstrong/Forest)
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