Privatization: Introduction and Position Statement

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This article is one of a series on privatizing wine and spirits sales in Pennsylvania. The full list of articles may be found on the Privatization Index Page.

Until now this blog has been silent on public policy. Although many wine and spirits consumers in Pennsylvania hold a low opinion of our government-owned liquor stores for various reasons, I have always left the diatribes to others and accepted the fact that political inertia was firmly against private-sector liquor sales. Instead I've tried to help cocktail and spirits enthusiasts and professionals get the most out of the PLCB retail system, through my blog and in my informal role as a volunteer advisor to the product selection team in Harrisburg.

Now there is a very real possibility that a substantial revision of state liquor code will result in the privatization of the existing government-owned retail system and the licensing of additional private businesses to sell wine and spirits for off-premise consumption. This would likely have a radical effect on the prices, selection and availability of spirits products in Pennsylvania.

To be clear: I have never been nor will I ever be in favor of government-run liquor sales. As with the Pennsylvania Lottery, I am philosophically opposed to the government promoting any vice, be it gambling, drinking, smoking, or whatever. I have no inclination to prohibit private citizens from engaging in these activities at their own risk and expense, but I believe the government's role should be to monitor and regulate, not encourage. (Imagine if tobacco products were only sold in state stores. Would we have government-sponsored billboards suggesting a carton of Camels as a Mother's Day present?)

From a more pragmatic perspective, it is clear that private liquor retailers in other parts of the country offer a wider range of customer experiences than our state stores. Pennsylvania law imposes strict constraints on the PLCB in terms of pricing, product selection, employee hiring and training, etc, which has resulted in 650 clones of a mere three or four different "model" stores. I expect that privatization would open the door for individual stores to differentiate themselves based on these factors to a much greater extent than is possible now.

On the other hand, Pennsylvania's state stores are, perhaps, the best-run government liquor stores in the US. They consistently turn over a profit, and despite public perception, the PLCB makes an effort to respond to the demands of its customers. There is no overriding mandate to privatize at all costs, and indeed, I believe it would be politically infeasible to enact any privatization legislation that would negatively impact Pennsylvania wine and spirits consumers or, more crucially, government revenue. In addition, many common complaints about the state stores might be addressed by relaxing the statutory constraints the PLCB must operate under, thereby improving the customer experience without bearing the risks that privatization might entail.

As a starting point for evaluating the privatization legislation that is expected to be introduced in the House, as well as any competing legislation that seeks to improve the existing stores, I will be publishing several reports and analyses on the PLCB retail system as it stands now, especially in comparison to other states that already have private-sector liquor sales.

Future posts will look at the following questions:
  • How much revenue do the stores generate for the state, and how does it compare to other states' revenues from liquor sales?
  • What tax structure would be necessary to impose on private retailers to replace revenue currently generated by state stores?
  • Do the state stores achieve their goal of competitive pricing, or is public sentiment correct that prices are lower in neighboring states?
  • How does the selection of products in state stores compare to private retailers in other states?
This will not be a comprehensive analysis of public policy, however. My research will steer clear of the following politically- and emotionally-loaded topics about which much has been said already:
  • Public safety and enforcement issues, such as underage drinking, drunk driving, alcohol-related injuries, etc
  • Quality of customer service
  • Public vs. private sector employee wages and benefits
As each new article is posted, it will be added to the Privatization Index Page.

In the interest of stimulating productive public debate, I will attempt to make my writings about policy issues as neutral as possible. I encourage independent interpretation of my results, and will gladly work with any party interested in recreating or extending my analyses. I can be reached privately at

Members of the media who are not already on my mailing list and wish to have early access to my formal reports should email me as well.

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1 Comment

I'll be looking forward to seeing what you have to say. I wish there was a way you could easily order ANY liquor in PA and it would be competitively priced.

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