Home Depression Alcohol Sales Jump Everywhere But Pennsylvania, Where A Government Monopoly Has Depressed...

Alcohol Sales Jump Everywhere But Pennsylvania, Where A Government Monopoly Has Depressed Commerce


It’s increasingly clear that Pennsylvania is unnecessarily inflicting economic harm on itself with the Keystone State’s uniquely byzantine government-run monopoly on the sale of spirits. That outmoded system, coupled with Governor Tom Wolf’s (D) mass closure of state-run spirits retailers this spring, something that did not occur in other states where state government controls the sale of liquor (referred to as “control states”), has caused sales of adult beverages to stagnate in Pennsylvania at the same time that such sales are rising in other states. 

According to a new report by the National Alcohol Beverage Control Association (NABCA), spirits retail sales in control states were up 19.6% in June compared to the prior year. NABCA found that spirits retail sales rose by double digits in 15 control states, with greater than 20% increases in 10 control states. 

Yet Pennsylvania only saw spirits retail sales increase by single digits, less than 1% in Pennsylvania’s case. NABCA reports the following growth rates for control state spirits retail sales for June, where it’s clear Pennsylvania is the outlier: “Alabama(30.8%), Iowa(24.4%), Idaho(22.8%), Maine(19.4%), Michigan(23.3%), Mississippi(71.0%), Montana(25.3%), North Carolina(23.2%), Ohio(25.4%), Oregon(14.4%), Pennsylvania(0.6%), Utah(18.8%), Virginia(14.8%), Vermont(11.1%), West Virginia(32.5%), and Wyoming(26.8%).”

Single digit growth in spirits retail sales in a month when other control states saw double digit growth is not the only area where Pennsylvania is an outlying laggard in alcohol sales. The same disparity in sales between Pennsylvania and other control states can also be seen when it comes to the sale of cases of alcohol. In fact, it turns out Pennsylvania was the only control state that saw an actual year over year reduction in case sales for June. 

“Control states spirits case sales grew 13.1% over same period sales last year,” according to the NABCA June sales survey, which reported the following case sales growth rates for control states: “Alabama(22.4%), Iowa(23.0%), Idaho(16.4%), Maine(17.9%), Michigan(10.3%), Mississippi(54.9%), Montana(23.4%), North Carolina(16.7%), New Hampshire(6.1%), Ohio(15.3%), Oregon(8.9%), Pennsylvania(-4.6%), Utah(17.0%), Virginia(9.6%), Vermont(10.8%), West Virginia(30.3%), and Wyoming(26.1%).”

How did this happen? In short, this was caused by Pennsylvania’s onerous and outdated regulation of alcohol sales, coupled with Governor Wolf’s decision to close state-run spirits retail stores for weeks, something that didn’t happen in the other control states. This debacle, which has reduced tax collections while increasing consumer inconvenience, has ratcheted up calls to reform and possibly privatize Pennsylvania’s state liquor monopoly once and for all. 

Mismanagement by the Pennsylvania Liquor Control Board (PLCB) and bad decision making is “costing the state sales and tax revenue while adding to the long history of PLCB boondoggles,” says Nathan Benefield, vice president of the Commonwealth Foundation, a Harrisburg-based think tank.

“Ending our government liquor monopoly should be at the top of the recovery to-do list,” Benefield added. “It’s time to enact full privatization of the state store monopoly and finally allow competition.”

The Pennsylvania House of Representatives has passed four bills to privatize the state liquor monopoly over the last seven years, but none have been enacted. In 2015 a privatization bill made it all the way to Governor Wolf’s desk, but was vetoed. Governor Wolf agreed to allow wine and beer to be sold in grocery and convenience stores as an alternative to privatizing liquor stores. 

If the votes are not there to get another privatization bill to Governor Wolf’s desk or if such a bill is certain to be met with an insurmountable veto once again, permitting the sale of spirits in grocery and convenience stores, as such outlets are currently allowed to do with wine and beer, is viewed by many as a compromise that would be a marked improvement from the status quo. Such a reform could have state-run liquor stores continue operating, while permitting private retail sales as an alternative for consumers. Such an expansion of sales would boost tax collections at a time when state coffers are low while increasing convenience for Pennsylvanians, who could use some increased convenience given what 2020 has brought. 

Pennsylvania’s state liquor monopoly and the way in which it has depressed sales seems all the more outdated and indefensible in a world where smartphone apps like Drizly deliver spirits, wine, and beer directly to consumers. With a few clicks people living not far from the Pennsylvania border — in places like Baltimore, Md.; Youngstown, OH; and Trenton, NJ — can have their favorite spirits sent to their door step. Meanwhile anyone in Pennsylvania who tries to use the app, because of the commonwealth’s onerous regulatory regime for alcohol sales, has the following screen pop up. 

At a time when many states and cities across the U.S. have liberalized regulations to permit the delivery of alcohol, it strikes many law-abiding adults living in Pennsylvania as bizarre that they have to jump through so many hoops to restock their home bar, while their family and friends in other states are getting their favorite adult beverages brought to them with the help of private sector innovation and competition. If inaction in Harrisburg continues, Keystone State residents will have the opportunity to vote out defenders of the antiquated status quo this November.


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