Governmental Booze

Here we go again.

The press about initiatives concerning the privatization of alcohol sales has started to heat up once more. Looks like the Washington initiative will be back on the ballot; Ohio is pushing across the board privatization, not just alcohol; and Pennsylvania lawmakers are expected to file legislation that would auction off the state’s wine and spirits wholesale operations and liquor stores to private vendors.

But wait a minute… Didn’t I just read that the Pennsylvania Liquor Control Board  (PLCB) just reported record sales and contributions to the state treasury?

In fact, the control board hit $1.9 billion in sales (up 4%) and claims to be the largest buyer of wine and spirits in the US. The sales volume generated some $500 million in sales tax and profit transfers.

It seems to me that, in addition to being a monopoly, they have tried to use marketing efforts more like a private enterprise than government. They run ads (print, billboards and even radio); lots of price promotions; and have initiatives like an online store and supermarket wine and spirits kiosks.

But it’s a government enterprise and, as such, I’m not sure they speak marketing. Their ads are okay but hardly comparable to those run by large private enterprise retailers. Despite the blasé nature of their communication, the PLCB still gets criticized for running ads. Imagine how much louder the criticism would be if the ads were compelling.

Their retail initiatives are worth applauding even if Wegmans ultimately rejected the kiosk idea because of customer complaints.  According to Bloomberg Business Week, “customers who use the kiosks insert their identification, and a state worker at a remote location verifies it. The wine buyer must then use a breath machine to prove their blood-alcohol level is below 0.02.”

Where I come from all of this is referred to as “close, but no cigars.”

I don’t mean to be harsh, but government running a private enterprise – no matter how well intentioned and creative the employees are – just doesn’t measure up. The obstacles are too numerous and strong.

I read an article today that the wineries in New York have appealed to Sen. Schumer because the federal government is hurting business by taking too long to approve new labels for wine bottles. Schumer said, “Often, when wineries finally do receive feedback, it is with a rejected label and the necessary corrections. And, at that point, labels must be resubmitted and the process must begin again.” He went on to point out that delayed label approval means delayed sales that in turn means less tax dollars.

Maybe the folks in Pennsylvania should work for the federal Alcohol and Tobacco Tax and Trade Bureau (TTB).

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