Pennsylvania's Bondage to Prohibition Era Liquor Laws

The announcement of a proposed 14,000 square foot Fine Wine and Good Spirits Shop at 11th and Chestnut Streets in downtown Philadelphia got me thinking once again how Pennsylvania needs to get out of the liquor selling business. The proposed mega store is good news to the Pennsylvania Liquor Control Board (PLCB) because the site will be in the heart of the booming Center City restaurant industry. PLCB planners are optimistic that the new store, which will straddle a mega Target store, will attract bulk beverage orders from surrounding restaurants.

A heavy bulk beverage business is already happening at the current, smaller PLCB store at 12th and Chestnut, which the mega store will replace when it opens in the spring of 2016. At the 12th Street store, it is not unusual to find empty shelves of Chairman Selection and other wines of relatively high or medium quality because restaurant scouts seem to buy them in bulk the minute they go on sale. This means that individual customers are forced to purchase less desirable or list price brands

PLCB officials anticipate the additions of loading docks at the new 11th Street mega store, so that restaurant scouts in SUV's can back up and take out even larger quantities of 'on sale' wine and spirits. This means more empty shelves for the individual consumer. Quite clearly the emphasis is not on the individual PLCB customer but on bulk purchases.

When I moved to Fishtown and the city's Riverwards in 2002, I was within walking distance of a small wine and spirits shop on Richmond Street. This mini-store, despite its size, had a fairly good selection, as did another mini store on Girard Avenue near the 26th Police District Headquarters. Mini state stores like this existed throughout many city neighborhoods so that, like a drop off Post Office letter box, nobody was too far from the nearest booze outlet. This changed when the PLCB began to think in bulk. The PLCB then began to consolidate the mini stores into fancy mega stores that promised a better selection of merchandise, regular wine and liquor tasting events and longer hours of operation. While the mega store advocates tried to make these large booze palaces sound as stylish as possible, the end result was that with the loss of the mini stores most customers now had to travel greater distances to make a purchase.

The presence of PLCB-trained wine experts in French looking aprons does not alleviate the pain of inconvenience when you need a bottle of something at the last minute and have to travel across town to get it. While the mini stores may have been ugly architecturally, at least they made a bad system somewhat tolerable.

The sad fact is that Pennsylvania is no further along in eliminating state control of liquor sales then it was in 1936 after the Johnstown Flood. Eliminating state control of wine and spirits is not specifically a Republican or Democratic issue, although generally it is conservative Republicans who want everything privatized, from the U.S. Post Office to Social Security. State store privatization is the one privatization that has been given the green light by many political progressives. The genesis of the state store system, after all, is an outgrowth of Prohibition and it is based on the principal that drinking is evil and sinful and needs government regulation to keep it in check.

Frequent liquor buyer Philadelphians often travel to Delaware and New Jersey when they shop for wine and spirits because the prices are cheaper there, despite PLCB propaganda that Pennsylvania prices are competitive. In New Jersey's 'Total Wine' store, for instance, you can buy fine wine for $3.99 a bottle. Generally, vodka, spirits and wine are 19% cheaper in New Jersey and 27% cheaper in Delaware. Pennsylvanians are also subject to the outdated Johnstown Tax. The Johnstown Tax began as an altruistic measure in 1936 after the infamous Johnstown flood. At that time the Pennsylvania General Assembly put an emergency tax on all alcohol, sans beer, sold in the state. Initially, the tax was conceived as temporary and was scheduled to be eliminated after the flood damage was cleaned up and after flood victims received adequate compensation. Six years after the flood, when Johnstown was in full recovery, the tax was never repealed. In fact, politicians raised the tax to 15% in 1963 and to 18% in 1968, where it remains today.

Where does the Johnstown Tax money go today? It goes into a general "discretionary" fund for Pennsylvania lawmakers. How's that for an ambiguous cookie jar.

Why has no Pennsylvania governor, even the so called grassroots 'people's governor," Ed Rendell, worked to repeal the Johnstown Tax?

Of course, whenever there's a state monopoly on something there's bound to be trouble. Recently an ex-PLCB official, a marketing director who had the power of determining which wine and spirits products should be shelved, and which ones should be discontinued, was charged with accepting bribes of golf outings, all-expense paid trips, cash, meals, and sports tickets from distillers and wholesalers who wished to boost their products or keep them shelved in PLCB stores.

The idea that one person in the state has the power to decide which brands of wine and spirits will stay put on store shelves is a little daunting to me.

When it comes to the sale of beer, Pennsylvania is far more liberal. The state does not run the beer business but it does control the number of licenses for these stores. In fact, the Pennsylvania beer tax is the 3rd lowest in the nation.

Why does beer get a free ride? And why does wine, whose properties are extolled by scientists and medical personnel as having amazing health benefits (sans abuse), put in the same category as gin and vodka? Wine in many states is sold in convenience stores, 7-11's, at the local CVS, Target, and in nearly all supermarkets.

After Governor Wolf's veto of the most recent liquor privatization bill, Representative Dayle Heffley had this to say: "... Pennsylvania is one of only two states in the nation (the other being Utah) that maintains full control of the wholesale and retail sales of wine and spirits. If moving away from our current government monopoly makes "bad business sense" as the governor claims, why are other states not modeling their liquor sales after Pennsylvania?" Heffley also pointed out that in Pennsylvania, "public opinion polls continually show that Pennsylvanians want to move away from our current Prohibition-era system."

In the old days, when you walked into a Philadelphia state store you had to ask a guy behind the counter what you wanted. They had state store catalogs with numbers; the customer would give the guy a number, he'd disappear into the back and come back with the bottle. The operation was run like a pawn shop. Not only that, but by law the guy behind the counter couldn't give you any recommendations.

Pennsylvania has come a little way since then, but it still has miles to go.