Pennsylvania Governor Tom Corbett announced a plan to privatize liquor sales recently, a move that would “roughly double the number of locations selling wines and spirits,” according to a local report. The entire proposal allows for the auction of a set number of wine and liquor retail licenses and the sale of an unlimited number of licenses to sell lesser quantities of beer and wine to service stations, drug stores, and other retailers.
“If we are to gain the advantage of greater consumer choice and greater consumer convenience, we should not do it halfway,” said Corbett. Indeed, the move is a dramatic abdication of government power in the Keystone State.
There are currently 19 monopoly jurisdictions, (18 states and Montgomery County, Maryland) where the government sells liquor, wine, or beer and the revenue generated goes directly into the government coffers.
The 18 states and Montgomery County all manage their “state control” stores differently, as do the other 32 states and a handful of municipalities. Additionally, there seems to be no regional bias against monopoly jurisdictions, as one might imagine would be the case with more conservative states. States from Alabama and Mississippi to Michigan and Maine to Oregon and Vermont and others all exercise monopoly control over the sale of liquor, wine, or beer.
Likewise, states as diverse as Tennessee, South Carolina, Massachusetts, and California allow for private retailers to sell liquor. This is one area of commerce where states have devised many different ways for the market to offer the same products.
The most recent state to relinquish its monopoly on liquor sales was Washington, where voters approved Initiative 1183 in November 2011. On June 1, 2012, consumers were able to purchase liquor in supermarkets and drug stores. There, consumers saw the price of liquor jump several dollars due to a number of taxes levied on liquor purchases as a trade-off for relinquishing state monopolization.
In 2009, then-Republican candidate for Virginia Governor Bob McDonnell campaigned on selling off the state-owned ABC stores to raise revenue for transportation projects. Once elected, Governor McDonnell proposed such legislation but was ultimately thwarted by the General Assembly on at least two occasions by a bipartisan coalition of legislators and special interest groups.
Northwest Grocery Association lobbyist Joe Gilliam threatened in 2012 to push for a referendum similar to Washington’s I-1183 during the 2014 election cycle if lawmakers didn’t liberalize Oregon’s “archaic” liquor laws. Gilliam helped spearhead Washington’s I-1183. There’s been very little movement in Oregon to date, but the legislative session just convened on February 4.
The move by Pennsylvania Governor Tom Corbett has been met with mixed reactions.
Josh Pearson, Operations Manager for a free-enterprise trade association and native of Pennsylvania, said, “Governor Corbett’s proposal is a big deal and would be a great triumph for consumers if passed. Pennsylvanians have been having this discussion for a long time.”
Opposition often comes from groups as diverse as liquor wholesalers, “pro-family” and evangelical groups, as well as bars, taverns, and restaurants – each who have a stake in government manipulation of the market.
Prior to Governor Corbett’s announcement, Republican leadership in the General Assembly pushed similar proposals in 2011 and 2012, but the legislation got bogged down in Committee. It’s too early to tell if Governor Corbett’s proposal will gain traction, but he has made attempts to assuage the concerns of groups who previously opposed privatizing liquor sales.
Now, if only these lawmakers would understand that increasing competition benefits consumers in other industries, too.
Source: AFF Doublethink Online | Joseph Hammond
Source: AFF Doublethink Online | Emma Elliott Freire