Friday, June 17, 2011
PLCB price resistance proves government shouldn't retail
On Wednesday, the PLCB proved it really doesn't understand wine.
The PLCB paid some money to PR Newswire to trumpet a press release in which it rejected more than 400 price increases from vendors. PLCB chairman PJ Stapleton called it a move to protect consumers.
Stapleton's press-release quote reads: "Too many Pennsylvanians are still living with significant financial strains, given the continued challenging economic environment. Maintaining current shelf prices ensures people can enjoy their favorite wine or spirit without sacrificing their family budget."
This is the problem: What if the producer of my favorite wine decides they'll just sell it to retailers in New York and California who accept their intended price increase?
Regular, non-governmental retailers reject price increases all the time; they stop selling the wine in question. Customers either stay with the store or not. In most cases they do. Costco or Bevmo shoppers who can't find the Cabernet they enjoyed last month will usually just buy something else. And that's fine. Pressure from retailers is a factor that keeps vendor prices in line with economic reality. Plus, Costco can't stop me from shopping at Wally's.
But it's a different story with a state monopoly, especially as it is illegal to ship wine to Pennsylvania and technically illegal for state residents to buy wine from outside the state and bring it in.
Let's say a Santa Barbara County Pinot Noir producer has a difficult harvest and has less wine, so they want to charge more. Or, let's say a Napa producer decides he's tired of his neighbor charging more, so he ups the price by $100.
And let's say I'm a Pirates fan who really likes that Pinot Noir and that Cab. And I have enough money to pay double last year's price. The state government is going to tell me I can't buy it -- not from the store, not from the Internet, not anywhere? Isn't watching the Pirates frustrating enough?
The current Pennsylvania governor is supposed to be trying to eliminate the PLCB. He isn't the first, but the liquor monopoly is a huge revenue source for the state, and has strong union support because the system's employees don't want to lose their jobs.
I doubt that the PLCB will be eliminated any time soon, despite its recent cartoonish debacle with wine vending machines. Despite the disdain for the PLCB among wine lovers, the move to eliminate it faces powerful political forces, including one of the largest neo-Prohibition voting blocs in the country.
But somebody needs to check its charter. Is the PLCB's role to tell Pennsylvania residents what they should drink, or what percentage of their income they should spend on wine?
If not, then let those vendor price increases through, and let consumers decide what they want. Pennsylvania residents aren't as dumb as the PLCB believes. They can't possibly be.
Posted by W. Blake Gray at 12:20 AM