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.
One of the mantras of the pro-privatization crowd is that a privatized system would expand product selection in Pennsylvania. I made clear in an earlier post that I believe the wholesale fees imposed by HB11 work against diversity of selection, but the question remains: How does the product range in our state stores compare to unrestricted private markets?
Top figures at the PLCB have publicly stated that they believe the selection in their stores to be comparable to what is found in license states. In a January New York Times article, CEO Joe Conti said that his Premium Collection stores are "as good as you would find anywhere in the country." PLCB Chairman PJ Stapleton testified to the House Appropriations Committee in March, "We're very proud of the fact that [...] there's great product selection in Pennsylvania."
In general, the PLCB tends to compare itself to private liquor stores in other states as if it were just another retailer in a competitive market. This is a tacit acknowledgement of what residents in border areas perceive it as. Viewed from this perspective, the PLCB is a well-established, experienced retailer with a solid mass-market selection, generally reasonable prices, and attractive deals on some products that even draw in shoppers from out of state.
Of course, the PLCB is not "just another retailer." To those of us who live far from the state border, not to mention Pennsylvanians who wish to avoid breaking the law, it is the entire wine and spirits market. No other retailer can step in to serve consumers whose needs the PLCB leaves unfulfilled.
Given our statutory prohibition against choosing between competing retailers to shop at, the only reasonable evaluation of our available product range would be to select a sizable geographic region in a license state and put our state stores up against the combined selection of every private retailer in that region.
I don't have a list of all products available from all retailers in, say, South Jersey, but I do have distilled spirit price lists from a handful of specialty outlets across the country. Although these are a poor proxy for a comprehensive regional product list, they are sufficient to answer our original question.
A break-down of these price lists, with supplemental bottle sizes and gift packs removed, is as follows:
This is a snapshot as of June 30th, so the recent delistings aren't taken into account. Items from the PLCB online store are excluded in fairness to the other vendors, whose listings reflect items available on a store shelf for immediate purchase.
Looking at the numbers, it is fairly clear that criticisms of Pennsylvania's spirits selection are well-founded. Astor Wines & Spirits, a Manhattan retailer with as much retail floor space as one of our Premium Collection stores, stocks a variety of spirits half again greater than what is available across our entire state. Under a larger roof, The Party Source near Cincinnati carries a selection 2.5 times the size of ours. The 24-store Binny's chain in Chicago outdoes everyone with an enormous range of more than 2500 different spirits.
For enthusiasts who focus on certain categories, the discrepancy is even greater. There are only 37 bottlings of single-malt scotch in Pennsylvania, compared with well over 100 at every other retailer and an awe-inspiring 571 options (really!) at Binny's. Cognac drinkers must contend with a mere 22 selections, rather than 50+. Niche categories such as grappa and absinthe suffer further still.
The product management team at the PLCB is well aware of their standing in comparison to private stores, and about 18 months ago they began building a specialty spirits program focused around the online store as well as 32 designated specialty spirits stores which carry an expanded range of products. (Regular readers are aware that I've provided input to this program from the beginning.) In the course of 12 months, the in-store portfolio brought in about 70 new products and the online store nearly tripled its spirits selection.
Given enough time, can the PLCB reach the in-store product selection offered by the private retailers above? It doesn't seem likely, due to the PLCB's long-standing political obligation to make its products available to all populated areas of the state in a non-discriminatory fashion. The PLCB would need to expend more than $10 million on inventory and expanded retail floor space in dozens of locations around the state to stock product that, by and large, will simply collect dust for years.
Lacking a legislative mandate to relax this doctrine of equal treatment, our most likely path to a vastly expanded product range is through mail order. The PLCB's online store is making a sincere effort to pump up its selection, and it is possible that a change in state law may permit the shipping of spirits to Pennsylvanians from out-of-state private retailers.
On the other hand, if the legislature forges ahead with HB11, it is my sincere hope that the bill is amended to reduce wholesaler license fees to more reasonable levels. Only if that happens will privatization have a chance of bringing improvement to our product selection.
One of the mantras of the pro-privatization crowd is that a privatized system would expand product selection in Pennsylvania. I made clear in an earlier post that I believe the wholesale fees imposed by HB11 work against diversity of selection, but the question remains: How does the product range in our state stores compare to unrestricted private markets?
Top figures at the PLCB have publicly stated that they believe the selection in their stores to be comparable to what is found in license states. In a January New York Times article, CEO Joe Conti said that his Premium Collection stores are "as good as you would find anywhere in the country." PLCB Chairman PJ Stapleton testified to the House Appropriations Committee in March, "We're very proud of the fact that [...] there's great product selection in Pennsylvania."
In general, the PLCB tends to compare itself to private liquor stores in other states as if it were just another retailer in a competitive market. This is a tacit acknowledgement of what residents in border areas perceive it as. Viewed from this perspective, the PLCB is a well-established, experienced retailer with a solid mass-market selection, generally reasonable prices, and attractive deals on some products that even draw in shoppers from out of state.
Of course, the PLCB is not "just another retailer." To those of us who live far from the state border, not to mention Pennsylvanians who wish to avoid breaking the law, it is the entire wine and spirits market. No other retailer can step in to serve consumers whose needs the PLCB leaves unfulfilled.
Given our statutory prohibition against choosing between competing retailers to shop at, the only reasonable evaluation of our available product range would be to select a sizable geographic region in a license state and put our state stores up against the combined selection of every private retailer in that region.
I don't have a list of all products available from all retailers in, say, South Jersey, but I do have distilled spirit price lists from a handful of specialty outlets across the country. Although these are a poor proxy for a comprehensive regional product list, they are sufficient to answer our original question.
A break-down of these price lists, with supplemental bottle sizes and gift packs removed, is as follows:
| PLCB | Astor W&S | Bevmo! (HQ store) | The Party Source | Binny's | |
| Absinthe | 2 | 17 | 12 | 11 | 18 |
| American Whiskey | 19 | 20 | 20 | 37 | 51 |
| Aquavit | 1 | 4 | 2 | 3 | 3 |
| Armagnac | 2 | 19 | 7 | 4 | 89 |
| Bourbon | 39 | 69 | 81 | 126 | 112 |
| Brandy | 14 | 23 | 40 | 36 | 51 |
| Brandy - Flavored | 5 | 3 | 12 | 17 | 11 |
| Cachaça | 3 | 9 | 8 | 7 | 9 |
| Calvados | 3 | 14 | 6 | 6 | 29 |
| Canadian Whisky | 19 | 5 | 19 | 30 | 28 |
| Cognac | 22 | 47 | 52 | 67 | 192 |
| Eaux de Vie | 10 | 25 | 26 | 30 | 48 |
| Gin | 27 | 54 | 51 | 51 | 54 |
| Grappa | 8 | 21 | 19 | 22 | 36 |
| Irish Whiskey | 17 | 29 | 30 | 30 | 41 |
| Liqueurs - Amari/Bitters | 9 | 21 | 10 | 14 | 17 |
| Liqueurs - Cream | 14 | 11 | 31 | 37 | 29 |
| Liqueurs - Fruit | 48 | 76 | 112 | 138 | 147 |
| Liqueurs - Herbal | 11 | 16 | 15 | 21 | 23 |
| Liqueurs - Nut | 9 | 10 | 14 | 23 | 18 |
| Liqueurs - Other | 48 | 52 | 82 | 120 | 109 |
| Liqueurs - Pastis/Anise | 11 | 19 | 18 | 21 | 27 |
| Mezcal/Other Agave | 2 | 28 | 7 | 13 | 28 |
| Other Whiskey | 1 | 10 | 6 | 8 | 17 |
| Pisco | 1 | 9 | 6 | 5 | 13 |
| Rum | 36 | 91 | 68 | 97 | 126 |
| Rum - Flavored | 46 | 22 | 51 | 78 | 50 |
| Rye Whiskey | 5 | 19 | 13 | 12 | 25 |
| Scotch - Blends | 28 | 37 | 59 | 58 | 79 |
| Scotch - Single Malt | 37 | 156 | 132 | 237 | 571 |
| Shochu/Soju | 3 | 31 | 3 | 11 | 1 |
| Tequila | 66 | 82 | 196 | 149 | 189 |
| Vodka | 61 | 83 | 104 | 113 | 104 |
| Vodka/Gin - Flavored | 118 | 66 | 138 | 233 | 149 |
| Whiskey - Flavored | 6 | 3 | 8 | 19 | 13 |
| Whiskey - Unaged | 3 | 17 | 5 | 17 | 23 |
| Total | 754 | 1218 | 1463 | 1901 | 2530 |
This is a snapshot as of June 30th, so the recent delistings aren't taken into account. Items from the PLCB online store are excluded in fairness to the other vendors, whose listings reflect items available on a store shelf for immediate purchase.
Looking at the numbers, it is fairly clear that criticisms of Pennsylvania's spirits selection are well-founded. Astor Wines & Spirits, a Manhattan retailer with as much retail floor space as one of our Premium Collection stores, stocks a variety of spirits half again greater than what is available across our entire state. Under a larger roof, The Party Source near Cincinnati carries a selection 2.5 times the size of ours. The 24-store Binny's chain in Chicago outdoes everyone with an enormous range of more than 2500 different spirits.
For enthusiasts who focus on certain categories, the discrepancy is even greater. There are only 37 bottlings of single-malt scotch in Pennsylvania, compared with well over 100 at every other retailer and an awe-inspiring 571 options (really!) at Binny's. Cognac drinkers must contend with a mere 22 selections, rather than 50+. Niche categories such as grappa and absinthe suffer further still.
The product management team at the PLCB is well aware of their standing in comparison to private stores, and about 18 months ago they began building a specialty spirits program focused around the online store as well as 32 designated specialty spirits stores which carry an expanded range of products. (Regular readers are aware that I've provided input to this program from the beginning.) In the course of 12 months, the in-store portfolio brought in about 70 new products and the online store nearly tripled its spirits selection.
Given enough time, can the PLCB reach the in-store product selection offered by the private retailers above? It doesn't seem likely, due to the PLCB's long-standing political obligation to make its products available to all populated areas of the state in a non-discriminatory fashion. The PLCB would need to expend more than $10 million on inventory and expanded retail floor space in dozens of locations around the state to stock product that, by and large, will simply collect dust for years.
Lacking a legislative mandate to relax this doctrine of equal treatment, our most likely path to a vastly expanded product range is through mail order. The PLCB's online store is making a sincere effort to pump up its selection, and it is possible that a change in state law may permit the shipping of spirits to Pennsylvanians from out-of-state private retailers.
On the other hand, if the legislature forges ahead with HB11, it is my sincere hope that the bill is amended to reduce wholesaler license fees to more reasonable levels. Only if that happens will privatization have a chance of bringing improvement to our product selection.
