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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Fast Food and Alcohol

The news that fast-food chains are selling alcohol sent me scurrying to the Internet to gauge the reaction among the public and pundits. After all, “demon rum” could be polluting the American haute cuisine realm and worse, is Ronald McDonald going to turn into a boozer? Will people fear that a McBeer will replace a shake? Do you typically pair your Whopper with a nice lager or with a zinfandel?

According to USA Today (and reprinted by Mark Brown’s newsletter), Burger King and Sonic will join Pizza Hut and Starbuck’s in offering alcoholic beverages along with fast food. Clearly, the move into alcohol is designed to compete with casual dining chains and to increase the cash register ring.

So, my Internet journey revealed mainly neutral to favorable reactions plus some interesting insights.

A number of blog postings (Chowhound, for example) referenced the differences between American and European attitudes toward alcohol, such as:

“There is a simple cultural difference between the US and the far more relaxed attitude many Europeans have towards beer. We seem to think that we need to regulate alcohol wherever we can, Europeans seem to think that adults are generally capable of making the right decision without the state telling them what to do.”

The gourmets also waded (or is it weighted) in:

“I would very much like a glass of Sangiovese with a Baracoa plate at Chipotle, or a Gewurtz with some good Tacos Al Pastor.”

I found this interesting item about Louisiana:

“…Not only drive-thru daiquiris, but doughnut shops with liquor licenses, too. Video poker is legal in Louisiana, but to get a gaming license, the operator has to have a liquor license (logically, if you check IDs for alcohol, you’ll check them for video poker). So damn near every corner cafe, sandwich shop, po’boy joint, doughnut and coffee place, serves alcohol and has video poker.”

Finally, the doom and gloom, anti-alcohol folks had their say: “Fast food plus fast alcohol equals fast drunks.” That’s obviously from someone who has never experienced the therapeutic benefit of a burger and fries at the end of the night or the day after.

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