Pennsylvania Battles Over Booze

The state of Pennsylvania is currently debating over whether the state should get out of the alcohol selling industry and privatize the sale of alcohol. While there are 17 states in the union that have some kind of state alcohol regulatory agency, only Utah and Pennsylvania exert total control over the sales. 

Earlier in the year, the privatization forces won an early battle by passing the bill through the state house under the sponsorship of Republican Mark Mustio. Given that Republican governor Tom Corbett position is also pro-privatization, the establishment will be fighting against the measure in the state senate. Part of the reason for the contentiousness, a recent Stateline article notes, is because, “…alcohol sales involve deeply entrenched interests- with even deeper pockets….all feel the impact when a state alters its policy.”

Some oppose privatization plan on “public health” grounds. For instance Pamela Erickson, the former executive director of the Oregon Liquor Control Commission and current CEO of Public Action Management, asserts that, “…the primary reasons for regulation and the specific reason for the control system was to eliminate the profit motive from the sale of alcohol.” To bolster that claim, the director of the Center for Disease Control appointed the independent Community Preventive Services Task Force to study the issue. The task force found that, “privatization typically results in alcohol being sold on more days for longer hours, more outlets selling alcohol and looser enforcement of rules, such as the minimum drinking age.”

In addition to groups concerned about public health and wellness, another opposing interest group is the Malt Beverage Distributors Association. The association believes that privatization will lead to further pressures on the industry especially from the “big box stores” and said, “This change makes our demise even quicker, because how do we compete with these large corporations that have been unfettered for years?” Mustio disagreed and believes that the association is trying to protect its own monopoly and countered, “They want to be the only outlet allowed to sell any type of alcohol.”

Mustio claims that his strategy to privatize alcohol sales was inspired by a visit to the state of Washington. Washington was the first state to privatize alcohol sales since the 1930s when the state changed its laws last June. The results is that state however have been ambiguous. David Cho of the Washington Liquor Store Association claims that his store is operating at a loss “because of competition from neighboring big box stores and expensive state fees…that he was told would not apply to his business.” His remarks about privatization and experiences with it perfectly sums up the dilemma that confronts Pennsylvania. “A free market economy is always a good idea. However, it’s a state’s job to promote competition and to protect small business owners.”

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