Corbett Alcohol Reform Plan Barely Lays a Hand on the Cartels

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I’m working on a Patriot News op-ed on alcohol reform for this weekend that will feature some of these same points, but I can’t resist quickly commenting on the Corbett alcohol reform plan.

The Good Stuff:

Grocery stores, gas stations, and convenience stores will be able to get licenses to sell beer and wine. No more competition between supermarkets and bars/restaurants for tavern licenses, as has been the case since the Wegmans court decision

You’ll be able to buy beer, wine and liquor all in one place at (some) beer distributors, and beer distributors will be able to sell six-packs. No more having to buy a whole case of just one brand for a party. 

– ID scans for all alcohol purchases. A no-brainer. I haven’t seen anyone else mention this, but Corbett said this was happening during the press conference.

Bureau of Liquor Control Enforcement gets a 22% funding increase. PLCB would no longer be in the corrupting business of both selling and regulating alcohol

$1 billion for education over four years. The people complaining that this is a gimmick are really just grumpy about selling the state stores. Obviously an extra billion dollars would be great for school districts and they know that.

The Bad Stuff

It doesn’t really bust up any of the licensing cartels. The problem is not just the state monopoly, it’s the cartels too. Giving certain kinds of businesses monopoly control over certain products is just as objectionable. We get a little more managed competition, but it’s hardly the free market that pro-consumer liberals and libertarians were hoping for.

No gallonage tax. For all the noise the pro-monopoly side makes about public health there are only a few proven ways to reduce problem drinking. This is one of them (the other is advertising bans). A revenue-neutral gallonage tax would’ve raised the cost of the cheap swill that alcoholics buy. A tax on value sounds progressive to Democrats, and it is, but I think we really ought to care more about reducing the public harms of drinking than sticking it to rich guys. You could do both though, and slap a high luxury tax on alcohol purchases over $100 or so. 

It still caps tavern liquor licenses. This is the biggest problem with the bill in my view. It doesn’t touch the County Quota system, where each County gets 1 tavern license per 3000 people. This is a disaster for older core downtowns that “want” to be nightlife clusters, but can’t because there aren’t enough liquor licenses. I am convinced that uncapping tavern licenses is the single most effective thing the state could do for distressed older cities.

– It caps liquor store licenses.  I don’t care as much about the cap on liquor store licenses, which this bill doubles from 620 to 1200, but this is still a kludgey way to go about preventing oversaturation, if that is the goal. My preference would be to not cap the number of stores, and fight oversaturation of liquor stores in poor neighborhoods through local zoning laws. It’s a local issue, not a state issue.

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5 Responses to Corbett Alcohol Reform Plan Barely Lays a Hand on the Cartels

  1. Pingback: 2/1 Morning Buzz | PoliticsPA

  2. Lew Bryson says:

    I’d like to add in “Bad Stuff” that it doesn’t end the in-state monopoly; nothing was said about allowing Pennsylvanians to bring home a bottle from out-of-state. Lots of us live very close to the border here in SE PA; lots of us work in NJ, DE, and MD. What is the reason to prevent us — under threat of police seizure — from buying in stores there? That’s real competition…and it’s insulting to prevent it.

    Otherwise…good breakdown. I balk at the luxury tax — and would probably continue to go out of state to illegally buy such bottles if it were enacted — but the gallonage tax just makes sense.

  3. Jarrod Stanton says:

    I would like to see some change as to the ability to ship alcohol to PA. Right now it is 100% illegal in every way to ship alcohol to residences in PA(please correct me if I’m wrong), since there is no way to collect the taxes on it from out of state (other than the seller collecting the taxes = nightmare). Any of the current websites that allow shipments to PA are breaking the law simply by having the license to ship using UPS or FedEx who frankly don’t care if they are shipping alcohol as long as someone 21+ is signing for it. There are many great wineries, distilleries, and breweries to be experienced throughout this great nation and PA will not be able to experience them as fully as they should! How do the other states do it?

  4. Dave Myers says:

    One of the historic stumbling blocks to privatization in the past has been the warehousing and distribution system for wine and liquor, which have involved a number of very strong special interests. I’ve not seen anything about this, so are we to presume that these aspects of the system will not be privatized–just the state stores?

    • Lew Bryson says:

      Dave, you’re really talking about the wholesaling end of the system. Most privatization plans — unfortunately — did not involve the Commonwealth getting out of that business. The current one DOES, so yeah, that’s going to be another issue. And one of those companies — handling transport and warehousing for the PLCB in NEPA — is owned by the AG’s husband: “Kane Is Able” trucking of Scranton.
      Does she have to recuse herself from ruling on privatization plans? I don’t know, but it is a concern.