After a failed attempt during the prior session to privatize Pennsylvania’s state wine and liquor stores, Governor Corbett has unveiled his own plan to move government out of the booze business. Pennsylvania is one of only two remaining states to maintain a government monopoly over wholesale and retail sales of both wine and spirits. The Governor’s plan will transform this prohibition-era system into one of greater consumer choice and convenience while also providing a critical investment opportunity for public education.
The privatization proposal would allow 1,200 stand-alone wine and spirits licenses to be auctioned off with a predetermined number for each county. In order to ensure robust market competition, no business will be permitted to hold more than 40 licenses statewide or 10 percent of stores within a county.
In addition to stand-alone stores, big box retailers, grocery stores, pharmacies and convenience stores could apply and pay annual license fees to sell wine and beer. Beer distributors also gain increased flexibility as they would be able to sell six packs and wine. Distributors would also be eligible to bid on the 1,200 wine and spirits licenses, which would allow them to be the only entities to sell wine, beer and liquor.
While the Liquor Control Board will no longer sell wine and spirits, the Governor’s proposal would be revenue neutral for the commonwealth. Existing alcohol taxes would remain intact with the addition of annual licensing fees and fines.
State police liquor law enforcement programs and alcohol treatment efforts would receive a 22 percent and 75 percent funding increase respectively. The auctioning of the 1,200 wine and spirits licenses is also estimated to generate more than one billion dollars. The proceeds would then go to public education in the form of block grants over the course of the next three to four years.
Privatization will end government’s mediocre monopoly over wine and spirits and bring Pennsylvania into the 21st century. No longer will the liquor control board be stifled with the dual mandate to promote alcohol sales and improve public safety. The current proposal allows consumers to take advantage of greater choice and convenience as Americans already do in 48 other states. Privatization presents a unique opportunity for historic investments in both public safety and education.