Politics & Policy

For Separation of Booze and State

For more than eight decades, the Pennsylvania government has been the sole purveyor of wine and spirits for the entire state. But in early July, just days before Independence Day, the state legislature passed historic liquor-privatization legislation for the first time. Since Prohibition, Pennsylvanians’ simple hopes to buy wine and spirits at the supermarket rather than a state store had never come closer to fruition.

But with a stroke of his veto pen, Governor Tom Wolf kept alive a failing system that benefits only politically connected special interests and those in power. Sadly, the Keystone State isn’t alone in clinging to the bad old days of government booze.

From Montana to Pennsylvania to Vermont, 17 state governments own at least part of the wine-and-spirits distribution system. Some states act as wholesalers, while others monopolize retail sales, forcing consumers into Soviet-style government stores to purchase their libations. And just two states, Pennsylvania and Utah, suffer the worst of both worlds: a total government monopoly of wholesale and retail wine and liquor sales. 

After years of public backlash, several “control” states are pushing major reforms to finally separate booze and state. Alabama and Vermont in particular are poised to exit the retail market.  

By introducing competition, the privatization movement promises consumers more choice, greater convenience, and better prices. But there are deeper issues at play. Government ownership hasn’t translated into the safer roads, law-abiding teens, or sober society it promised.

For example, 31 percent of U.S. traffic deaths in 2013 were caused by drivers with blood-alcohol levels at or above the legal limit, according to the National Highway Traffic Safety Administration. But in control states, drunk-driving deaths trend close to the national average — government control isn’t saving lives.

Underage-drinking statistics tell a similar story. According to federal-government survey data, Vermont, a control state, had the highest rate of alcohol use among youths ages 12 to 20, at 37 percent. And more than half of control states have underage-drinking rates higher than the national average.

Not only is the state-government stranglehold on alcohol failing to guarantee a safer society. It’s also breeding corruption and waste.

In few states is this more evident than Pennsylvania, where the Liquor Control Board serves as gatekeeper for an entire state’s wine and liquor selection. Vendors seeking to do business in the state have successfully plied board officials with free iPads, golf outings, and even strip-club excursions. Over the past 18 months, six LCB officials have been charged with ethics violations as a result.

Absurdly, the same corrupt board that buys and sells booze is also charged with enforcing Pennsylvania alcohol and traffic laws. It’s an outrageous conflict of interest and a lose–lose for taxpayers — and they know it. In a 2013 statewide survey, 66 percent of respondents said they want government out of liquor sales altogether.

With statistics and public sentiment in favor of privatizing, how has state control stuck around in Pennsylvania? The answer is the state’s powerful government unions, particularly the United Food and Commercial Workers (UFCW). They stand to lose their iron grip on thousands of dues-paying state workers if the monopoly ends, and they aren’t shy about defending their turf.

Government unions have poured dues money from millions of members into anti-privatization advertising, but their political giving has arguably been more effective. In the last election cycle, the UFCW gave more than $250,000 to Pennsylvania Democrats, Democratic committees, and Governor Wolf’s campaign, according to campaign-finance records. Not coincidentally, no Democrat has voted for liquor privatization in recent memory.

There’s still a chance for the privatization movement in Pennsylvania, but as long as union leaders have a staunch ally wielding a veto pen, it’s a slim one. When the government monopoly is eventually broken, consumers will rejoice and government will be able to focus on its proper role as regulator — not purveyor — of alcohol.

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