Last year, the Pennsylvania Liquor Control Board installed "wine kiosks" in 31 grocery stores. Last month, it shut the machines down for repairs, just in time for the holidays.
The kiosks, a bungled, half-hearted attempt to accommodate consumers who heretofore could buy wine only at government-run stores, encapsulate the dilemma faced by state alcohol monopolies, as cash-strapped legislators consider privatizing them to raise money and cut costs in this year of gaping budget deficits.
To the extent that the state systems resist privatization by becoming more customer-friendly, they undermine their reason for existing, which is to deter alcohol consumption by making it more expensive, less appealing and less convenient.
Pennsylvania is one of 18 states that control the distribution of alcoholic beverages and one of 12 that operate retail stores directly or by contract. These systems, established after the repeal of Prohibition, are expressly designed to make alcohol less accessible — not just to minors, but to adults who might drink too much.
Joe Conti, chief executive of the Pennsylvania Liquor Control Board (PLCB), recently told The New York Times that PLCB employees "aren't incentivized to sell." Unlike consumers facing lethargic clerks who can barely be bothered to ring up their purchases, let alone advise them about the best wine to pair with lamb, Conti considers this indifference a virtue.
Yet in the same interview, Conti bragged that the PLCB, which recently decided to raise its "handling fees" by $1.50 or so a bottle, has "modernized some of its 620 stores and expanded their hours." It now has 75 "premium" outlets that Conti claimed are "as good as you would find anywhere in the country." Not only that, but "he hopes to start a pilot project soon to give them names instead of numbers."
Despite Conti's perestroika, Paul Davies, deputy editorial page editor at The Philadelphia Inquirer, reports that "most state stores still look and feel like military commissaries," with unhelpful employees, limited selections, poor inventory management and high prices. Fear of privatization, which is supported by incoming Gov. Tom Corbett and incoming state House Majority Leader Mike Turzai, R-Allegheny, may spur the PLCB to act a little more like a real business, but consumer satisfaction will never be its top priority.
Consider the wine kiosks, which Turzai calls "a silly type of an idea that only a government bureaucracy could come up with." That's literally true, since the machines were invented specifically to satisfy the PLCB's peculiar demands.
Each kiosk holds 1,000 bottles of 53 (count 'em) different wines, which you can buy with a credit card if you swipe your driver's license to prove you are 21 or older, look into a camera monitored by a state employee in Harrisburg to prove you are the person you say you are and breathe into an alcohol sensor to prove you have not been drinking. The machines operate from 9 a.m. to 9 p.m. and are closed on Sundays and holidays. They charge shoppers a $1 "convenience fee" for the privilege of buying wine at the supermarket, a freedom that residents of most states take for granted.
The states where wine (and beer) can be purchased along with groceries, but nevertheless confine the sale of distilled spirits to government stores, include Virginia, North Carolina and Washington. This year, legislators in all three states are considering abolishing that monopoly, with support from the governor in the first two and possibly in the third, as well.
The opposition to these proposals comes from labor unions representing state liquor store workers, anti-alcohol groups such as Mothers Against Drunk Driving and businesses that profit from the lack of competition. In Washington last year, beer and wine companies were the biggest donors to the campaigns against two unsuccessful ballot initiatives that would have privatized sales of distilled spirits.
What all these special interests have in common is a disdain for consumers — which is fitting, because that is the inescapable rationale for state alcohol monopolies.
ABOUT THE WRITER
Jacob Sullum is a senior editor at Reason magazine. Visit Reason at www.reason.com.