“How much do you plan on spending against me for introducing this bill?” Pennsylvania State Rep. Natalie Mihalek (R) asked.
“Everything we can,” replied Wendell Young IV, president of the United Food & Commercial Workers union. And well he should: He represents workers in the Pennsylvania Liquor Control Board‘s warehouses and state stores. The proposed constitutional amendment would cost the jobs of thousands of those workers.
Not only that, he said, Pennsylvania’s system generates $300 million in annual profit for the state. That a less-than-1% drop in the bucket of Pennsylvania’s current $39.8 billion state budget. But it’s presumably money that would have to be made up in higher taxes, most likely on beer, wine and spirits, if the state system was sold to private interests.
And there certainly would be buyers. Representatives from the Pennsylvana Restazurant & Lodging Association, the Pennsylvania Food Merchants Association and the Pennsylvania Chamber of Business, all assured the House Liquor Control Committee the private sector is willing and able to take over sales from the commonwealth’s 600 stores. which generate average sales of $4.6 million per store. PLCB says 86% of spirits sales occurred at retail while 14% were to licenses. For wine, 73% of sales were to individual consumers and 27% were to licensees.
But, Young said, the commonwealth’s control system is clearly superior, providing great variety and choice to consumers. Distilled Spirits Council of the U.S.‘s Senior VP for state government relations, David Wojnar, and Matt Dogali, president of American Distilled Spirits, didn’t take a position on the bill, but both testified that PLCB’s pricing practices hurt consumers. PLCB can “keep the discount offered by the supplier” instead of lowering prices for the consumer as intended, Dogali said.
Pennsylvania Restaurant & Loding Association representatives joined the Pennsylvania Food Merchants Association to cite numerous issues with PLCB’s inflexibility during the pandemic. “The current system we have is not only not consumer friendly, it’s designed not to be consumer friendly,” said Gene Barr, Pennsylvania Chamber president.
Turning the state system of retail stores and warehouse over to the private sector would mean Pennsylvania taxpayers would be footing the bill for $24 million a year in pension liabilities for the next 30 years, UFCW’s Young testified.
DISCUS, ADSA and PLCB all said they were not taking a position on the proposal.