Captain Obvious Blogging: Yes, Ending the State Monopoly Would Mean More Consumer Choice

Share With Friends

One of the sillier claims made by opponents of alcohol market liberalization is that allowing privately-owned stores to sell liquor would result in less selection:

This would likely be true for rural areas, but for the vast majority of state consumers, alcohol selection would definitely improve. The one thing markets are great at is delivering the goods that people want. If there’s demand for a certain brand of wine or liquor in your area, you can be sure that markets will supply it. Maybe not at the grocery store, but certainly at a specialty liquor store. And if not there, then on the Internet.

UFCW is making a ridiculous argument about this:

The United Food and Commercial Workers Local 1776, the union representing the approximately 3,000 employees in the state-run liquor stores, has been the most vocal opponent of privatization.

They and other opponents have argued that privatization actually will result in fewer options for consumers because grocery stores and convenience stores do not have the space to stock the wide array of choices that some of the largest state-owned liquor stores do.

In a free market with no restrictions on who can sell alcohol, the shape of the alcohol market would be this:

– Grocery stores sell all the popular brands, and experiment with a few obscure brands with niche popularity.

– Convenience stores and gas stations sell only popular brands

– Smaller specialty liquor stores sell harder-to-find niche brands, mostly in the big metros. Any brand that gets popular in these stores will eventually find its way to supermarket shelves.

– The Internet sells everything you want

Depending on how much lawmakers decide to restrict who can sell alcohol, and what kinds, selection may be worse than I am describing. But that’s an argument for placing as few restrictions as are politically possible on the seller side.

It continues to be the case that the only argument for the state monopoly that is even remotely persuasive is the jobs argument. The arguments that state stores do a better job on consumer choice, public health and safety are all hilariously bad. The only area where state stores do better than private stores is wages. Arguing that the state monopoly is worth preserving because you care about the jobs isn’t a crazy position. But it’s irritating having to play whack-a-mole with all these other nonsense talking points, which are really just meant to distract from the real disagreement. Just say it’s about the jobs. It’s your strongest point.

Personally I don’t think overpaying 5000 individuals is a good use of scarce public dollars, and the reason I feel that way is because this does not get us any closer to higher wages or better working conditions for private retail workers. It’s not any kind of symbolic win or anything, since you’ll never have a state monopoly on all the state’s retail jobs, nor should we want that. Also, the jobs aren’t going away. Even the Turzai plan, which was far too restrictive on the seller side, would’ve created more liquor stores than currently exist. All the people currently working in the state stores will be able to find jobs at liquor stores if they want. It’s really just the wages.

(Thanks: Eric Boehm)

This entry was posted in Miscellany and tagged , . Bookmark the permalink.

7 Responses to Captain Obvious Blogging: Yes, Ending the State Monopoly Would Mean More Consumer Choice

  1. Will says:

    ‘Captain Obvious’ obviously has not done his homework. Washington State privatized in June of last year, and every news story fronm there reports that prices have gone up and the stores that allegedy were to have a better selection are struggling to stay in business and in many cases closing. It’s too bad that the Captain has swallowed the cool aid being served by State Rep. Mike Terzai, the right-wing Commonwealth Foundation and other advocates of selling the Wine and Spirits stores. The workers will get jobs? Hardly. Supermarkets and big box stores simply will reallocated shelf space to stock Yellow Tail and other big-selling brands, and no new workers will get hired. So we as taxpayers lose a great deal of the $500 million a year that the stores bring into the state treasury, we lose thousands of family-sustaining jobs, and we get higher prices. What a deal!

    • Jon says:

      Like I said, if you restrict the seller side too much, like Washington State did by restricting the number of liquor licenses, you could hurt selection. But that’s why I’m arguing for not making that mistake.

    • Michael says:

      “Supermarkets and big box stores simply will reallocated shelf space to stock Yellow Tail and other big-selling brands, and no new workers will get hired.”

      You need to read more stories about Washington, or most other states for that matter. At least one Total Wine has opened Washington, and close to a Costco, so that’s already one major new retailer that wasn’t there before, with the jobs and vastly superior selection for the consumers.
      As for grocery stores or other chains only selling the big brands like Yellowtail, well that sounds a lot like the plcb’s selection to me, although they might have a different house brand other than “Tableleaf”.

      • Michael says:

        that should read “in Washington”.

        One more thing-
        “So we as taxpayers lose a great deal of the $500 million a year that the stores bring into the state treasury, we lose thousands of family-sustaining jobs, and we get higher prices. ”

        Inaccurate and very misleading on all counts. The vast majority of the amount received from the plcb is from their collection of taxes. We’d still get that with private retailers collecting taxes, assuming we want to keep the alcohol taxes at the same rate.
        As for the “thousands of family-sustaining jobs”, at least one third of those are part time, and from what I’ve heard from the handful of people I know who have worked there, even the full time pay isn’t enough to sustain a family.
        There are so many better ways of promoting employment and good jobs other than maintaining a state liquor monopoly.

  2. Michael says:

    I couldn’t agree more with everything you said. If the best argument for maintaining the monopoly is to maintain retail sales jobs for a tiny fraction of a percentage of employees in the state, then you really don’t have much an argument at all. Especially when there would be a lot more employment opportunities in a privatized system.
    As for selection, service, convenience, and public health, at this point I find the continued repetition of those failed talking points to be insulting to the intelligence of any thinking human being who has ever been outside of Pennsylvania, or who can read.
    Isn’t there a single Democrat in the legislature who will support this? I heard the Senator who supports legalization of marijuana on the radio last night, and even he opposes ending the state liquor monopoly-because he claimed we’d lose the stream of income after a one time sale. I wanted to yell-the revenue won’t go away, we’ll still have the alcohol taxes! I can’t believe he’s really that ignorant, just counting on the ignorance of the voters. Usually a good bet.

    • Jon says:

      It’s a popular talking point, but it’s wrong. The PLCB contributes just $105 million to the general fund, and the last few years its profits have been more like $70 million. They’re sending more money to the state than they’re bringing in.

  3. Get a grip says:

    Well I have invested 21 years working for the PLCB, I like my job & I would be losing a “family sustaining job”…..I would loose everything I have worked for and there is no way its going to creat jobs come on. We all will be on the unemployment line!! NICE! Not for me. Why sell something that makes money?? So the governors buddies can get their greedy fingers in the liquor business. You will still have to go to a liquor store for the hard stuff so whats the big deal. I have been to MANY different states & have NEVER found any AWESOME deals that would make me want to go there. SO if anyone has a job out there for me lets go!!!!!