Who Cares if Ending the State Monopoly Hurts Alcohol Selection in Rural Areas?

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One point I keep hearing in the alcohol wars is that we shouldn’t end the state monopoly, since that would mean less selection and higher prices in low population rural areas.

I think the sensible response to this argument is “who the fuck cares?”

People who choose to live in sparsely populated rural areas know what they’re getting into. They’re not expecting to have tons of amenities and consumer products. That’s the trade-off you make when you choose a lot of land and privacy over living around a lot of people. Without a dense cluster of retail customers, the local market can’t afford to devote a bunch of shelf space to rare wines and liquors.

How often is a rural liquor store going to be able to sell the lesser-known fancy stuff, versus more popular products like Southern Comfort and Jack Daniels? If they do stock rarer items, they’re going to have to sell at higher prices to make up the opportunity cost of potentially having to devote shelf space to them for a long time.

People who complain that selection will suffer and prices will rise at rural liquor stores are admitting that it makes no business sense for the state to operate fully-stocked liquor stores in rural areas. They are literally arguing that the state should intentionally lose money running these businesses anyway, because…???

Why? Is alcohol a public good? Is it the government’s job to make sure everybody has access to fancy wine at low costs? What’s next, a human right to almond milk and lacinato kale? Organic peanut butter? This is nuts. People who care a lot about access to a wide variety of fancy consumer goods should choose to live where they can buy that stuff, and people who don’t care will choose to live elsewhere. There is no reason to feel bad for the people who take the “fewer choices” side of that trade-off, and there’s definitely no reason for the state to lose money subsidizing fancy alcohol in places where there’s no market for that.

The best policy option for getting the fancy booze to the Sommeliers of Bumblefuck is Number 4 on the Bryson/Geeting list of demands:

4. Allow Pennsylvanians to buy wine, spirits, or beer in other states, or through the mail/Internet from anywhere, without penalty. — End the police-enforced monopoly.

Let people buy the booze over the Internet. Local stores not stocking something fancy you want? Order it online! The US postal service already subsidizes mail delivery to rural areas. This is a better option than having the state government paying people to run money-losing physical liquor stores in markets that can’t support them.

The other reason why we shouldn’t care that ending the state monopoly would make life less convenient for rural wine connoisseurs is that this is a democracy, and we ought to do what’s best for the majority of state residents. The defining characteristic of rural areas is that hardly anybody lives in them.

It makes perfect political sense for rural politicians to oppose this. It would be weird if they weren’t fulminating against the prospect of ending the state-subsidized glut of booze flowing into their districts. But there’s no excuse for the politicians representing urban and suburban areas – the overwhelming majority of state politicians – not to do what’s best for the consumers in their districts.

The high population areas of the state – the political majority – would absolutely see more consumer choice and better prices if grocery stores and private liquor stores were allowed to sell beer, wine, and liquor. Unfortunately the majority’s interests don’t prevail on this issue because it’s all bogged down in union politics. Rural politicians vote their districts, but urban and suburban Democratic representatives vote their ideology, prioritizing the interests of a tiny tiny minority of 5000 state store workers over the interests of the millions of consumers they’re supposed to be representing.

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22 Responses to Who Cares if Ending the State Monopoly Hurts Alcohol Selection in Rural Areas?

  1. Jonas Salk says:

    I agree with the article except for one glaring error: This isn’t a democracy, we’re a constitutional republic. Democracy is two wolves and a sheep voting on what’s for dinner. Just because you can vote doesn’t mean your form of govt is democracy.

  2. Michael says:

    Excellent piece, the whole system is absurd and needs to be scrapped. Glad to see most folks on both sides of the political spectrum can agree on this.

  3. John Rzodkiewicz says:

    Sommeliers of Bumblefuck? Anyone else you feel like disparaging? You sound like Jay Ostrich from the CF. Wow! Why should any of the current stakeholders settle for less than they have now just so Philly can become an alcotopia? Ordering anything you want over the internet only drives down the selection and, drives down the value of the licenses, and most importantly drives down the states revenue potential. Lost in this discussion is that we are talking about a distribution system for a substance that is for the most part used as a recreational drug. One that kills more people every year than all the illegal drugs combined. You might argue Pa. is only average in binge and underage drinking statistics as well as DUI rates but the self reported drink preference for all three groups is beer. Pa has a private system for that as well as one of the very lowest malt beverage taxes in the country. One of those gallonage taxes that you and industry writers like Lew push for. Has lost 90% of it’s real value since it was last raised. Sellers love it. Look at the states in our demographic that combine such a low tax on beer with wide open liquor sales to find the worst rates for those three social problems. I just posted this quote on an older thread a bit ago. I hope you’ll indulge me and allow me to re post it here.

    “A moment’s thought makes it obvious that alcohol is different from, say, apples. Apples don’t form addicts. Apples don’t foster disease. Society doesn’t bear the cost of excessive apple consumption. Society does bear the cost of alcoholism, drink-related illness, and drunken violence and crime. The fact that alcohol is habit forming and life threatening among a substantial share of those who use it (and kills or damages the lives of many who don’t) means that a market for it inevitably imposes steep costs on society. Modernization is different in that it responds to customer needs, not corporate greed.”
    Modernization can improve the shopping experience for the consumer as well as revenue for all Pennsylvanians without resorting to risky schemes that sell off public assets to the highest bidder. Google Washington Sate Liquor. Other than an increase in sales in the center part of the state ( Probably from people switching from beer and wine to the hard liquor that’s now available almost everywhere, a debatable improvement) all you’ll find is buyers remorse due to increased prices, less selection, shoplifting becoming all the rage for both teenage kids and organized gangs and massive border bleed along the state lines of the control states of Idaho and Oregon.

    • Jon says:

      The current stakeholders might not want to settle for less than they have now, but the politicians don’t work for the stakeholders, they work for the consumers. If stakeholders don’t want to deal, we should rout them anyway. They should do what’s best for the majority of the consumers, most of whom live in the bigger metros.

      Why would ordering on the Internet reduce selection? The Internet has a huge selection of alcohol! Much bigger than any store could possibly hope to stock. I also don’t care at all about the value of the licenses for retail stores, and especially not tavern licenses. I want all licenses to be sold at a flat rate, with no cap on the number.

      I agree about beer taxes, and have argued here and elsewhere that the gallonage tax should be higher and indexed to inflation.

      • John Rzodkiewicz says:

        I realize you and Lew probably spent a lot of time figuring out what you “want” but the idea that you can charge Sam’s club the same price for a license that you charge a mom and pop corner store doesn’t seem reasonable. Lew will give you a fight on those beer taxes, but then his income is made writing for and about the industry. He shook the heck out of his booga-booga stick when this was proposed during the Rendell administration. Uncapping the number of licenses will surely result in high outlet density of predatory liquor stores in poor urban areas. This is tied to food deserts in those same places. Booze is high profit. Do some research and you’ll find a huge problem in Baltimore, Chicago, and Cali cities all over the state.

    • Jon says:

      The way to deal with the public health issues is 1. high gallonage taxes indexed to inflation 2. advertising bans. Those are the most proven ways to fight alcohol abuse. There is no evidence that the state monopoly has done anything to reduce alcohol abuse.

      • John Rzodkiewicz says:

        http://www.thecommunityguide.org/alcohol/index.html

        Part of the reason privatization doesn’t get traction is that science disagrees with you on this point. For every unpublished, non peer reviewed “study” paid for by the Commonwealth Foundation you can go to the peer review journals and find ten to refute it.

        • Jon says:

          Actually I was going off of a recent NBER study that found high taxes have a deterrent effect on moderate drinkers but heavy drinkers were most responsive to advertising cues.

          • John Rzodkiewicz says:

            Agreed. But like I said we are not talking apples here. Liquor being sold everywhere is advertizing in itself. Most heavy drinkers were at one time moderate drinkers. Addiction is a progressive disease.

  4. Julieann Wozniak says:

    Hello? I live in a rural area. We have cars. And broadband internet access. FedEx and UPS make regularly stops. The point is that ending the Commonwealth’s booze monopoly will NOT have a deleterious effect on the availability of liquor. It certainly doesn’t in rural West Virginia, where you can by some pretty high class wines in, say, Krogers store. And there’s a thriving microbrewery industry, where they will ship right to your door. I’ve been sober since 1980, but just saying.

    • John Rzodkiewicz says:

      Wrong. Before privatization every county in West Virginia had a liquor store. Now five go without one. Of course when company comes over to watch the Steelers game you could just DVR it, put in a internet order, and tell the company to come back Wednesday. High class wines in the W.Va. Krogers? I’ll let that go or risk disparaging the common man. I’ll leave that to the alcocentric bloggers.

  5. John Meyerson says:

    Wow, Lets just pretend that Washington State didn’t just privatize and saw selection go down and prices go up.

  6. Ed H. says:

    The politicians work for the citizens of the state, not the consumers. Again, Jon, privatizing brings very few upsides and a ton of downsides.

    • Jon says:

      There’s a lot more overlap between consumers and citizens than there is between consumers and state store workers or beer distributors or tavern license owners.