Al Capone Is Dead

Why we need to sell off the state stores — and get Pennsylvania out of the booze business once and for all

People seemed to get overly excited recently when state senator John Rafferty, the Gandhi of Pennsylvania beer lovers, announced that he would once again take on the state’s antiquated beer laws.

They got equally excited last year when the state allowed wine sales as some supermarkets. Watching Pennsylvanians get excited about the possibility of buying a sixpack of beer or bottle of wine at Acme is akin to a backwoodsmen in the Appalachians getting excited about indoor plumbing coming to town. The country’s feelings about alcohol have dramatically changed since the end of prohibition in 1933; Pennsylvania’s laws have not changed at all. [SIGNUP]

I am now making a regular commute to New York, where cans of beer are available on ice at delis in the train station. And except for the occasional whiff of urine in the subway, I have not witnessed any ill effects from the open availability of beer. (Although I cannot swear the urine is because of the beer; my olfactory senses are not that keen.)
So instead of crawling out of Prohibition, let’s jump into the new century with both feet and dismantle and sell the state Liquor Control Board.

It’s not a new idea. But it’s an idea whose time has come. Consumer groups, economic professors, policy wonks and wine lovers have been lobbying, testifying, pushing research and pleading for the state to end its monopoly, but to no avail.

Now, with the state looking at a huge budget deficit coming down the tracks at the end of the Federal stimulus money, selling the 619 state stores and auctioning the rights to sell wine and spirits is too lucrative to pass up. (West Virginia, Iowa and the Canadian province of Alberta have auctioned off the retail and wholesale rights to wine and liquor sales to great success.)

In 2007, a free market think tank called the Reason Foundation estimated that Pennsylvania would make a quick $1.7 billion dollars by selling the rights. The state’s revenue stream of over $350 million in sales and liquor taxes on wine and spirits would not change. And since state stores don’t pay corporate taxes or property taxes, the money from the new stores could bring in another $10 million to $15 million annually in taxes.

Although any effort is certain to be met with fierce union opposition from the United Food and Commercial Workers, there is reason to believe that the sale would create jobs. In Iowa, West Virginia and Alberta, the number of stores and the number of workers at those stores increased as much as 300 percent, expanding the tax base and reducing unemployment.

The real benefit would be to consumers who would see the immediate benefits of convenience, larger selection and lower prices. Smart shoppers living in Pennsylvania border towns and cities know this to be true as they routinely head to Ohio, New York, New Jersey, Delaware and West Virginia for the lower cost and better hours. All of that business would stay in Pennsylvania if we privatize wine and liquor sales.

The biggest arguments against privatization are its effects on the health and safety of Pennsylvanians. The fear is alcohol consumption will go up along with alcohol related deaths. Another public policy think tank, the Commonwealth Foundation, makes a strong case that those concerns are as old as the Prohibition that gave birth to the state stores.

Researchers for the Commonwealth Foundation looked at alcohol consumption in Iowa and West Virginia both before and after the states changed from owning to licensing liquor stores and found that alcohol use went down as much as 5.9 percent. It seems that when you make wine and liquor more difficult to get, people tend to buy in bulk so they don’t have to make so many trips. Then, with more alcohol in the house, they drink more.

As for alcohol related deaths on the highways, this next fact may surprise you. The National Alcohol Beverage Control Association found states that fully control alcohol sales, like Pennsylvania, have the highest average fatality rate. The NABCA also found that those states have the highest DUI arrest rates.

There seem to be few strong reasons NOT to join the majority of the country in opening up alcohol sales to the free market. There are only a few states, including Alabama and Utah, who are holding on to the Prohibition-induced state system.

Al Capone is dead. Let my wine and spirits free!

LARRY MENDTE writes for The Philly Post on Monday and Thursday. His video commentaries are seen on Tribune television stations across the country. You can view them at