Milne: Liquor Sales Not Core Function of Government

Editor's note: The following op-ed was written by state Rep. Duane Milne.

Privatization of State Store System; don't pop that cork just yet

By State Rep. Duane D. Milne, Ph.D.

I write to comment on the latest issue many citizens are asking about: privatization of the alcohol beverages sector in Pennsylvania. As a strong supporter of free-enterprise, I regret that the most recent initiative that was underway to do so has gone flat.  The bill under consideration has been tabled for now, which means that wine and spirits purchased from what could have been a privately-owned Pennsylvania retail store will not appear on your table this summer. I am disappointed with this case because selling alcohol is not a core function of limited government and should be handled by the private sector as a matter of principle.  The latest brand in this long-running debate comes in the variety of House Bill 11.

This legislation received some debate recently in the Pennsylvania House of Representatives.  More than 270 amendments, far more than typical for most bills, were filed to the proposed legislation by representatives seeking to ferment the legislation to their exact liking (or those of interests for which they were advocating).  The sheer volume of amendments reflects the depth of just how difficult it has proved to brew strong enough consensus on this issue to pass a privatization bill.  The current bill's sponsor proposes to create and sell both wholesale and retail wine and spirits private licenses, as well as expand adult beverage availability to grocery and convenience stores, all with the appropriate restrictions and controls. Via the bill, some 1,600 retail licenses would be auctioned off across the state and a largely privatized system of wine and spirits would evolve. 

The general concept of privatizing the alcohol beverages sector is certainly the policy choice de jure of the public, according to polling. However, corks of opposition have popped from labor unions as well as beer distributors.  Many distributors believe the system to be created under the bill would be to their disadvantage, cost them too much to compete for the new retail licenses and unduly open up new types of beer sales to other outlets such as restaurants, taverns and supermarkets.  Labor unions representing state store workers object primarily because they contend the new system would lead to loss of state jobs.  To entice opponents to give this new brand a chance to be tasted, an amendment, which I supported, to the bill would accord presently-operating beer distributors the first opportunity-literally before anyone else in the entire state-to purchase some of the new retail licenses; a right of first refusal in effect.  Current state store employees would be granted preference in hiring for other state jobs and service jobs, an educational grant of up to $2,000 per employee, a re-employment tax credit and even provisions for early retirement under certain circumstances.

But all of this is apparently not enough to make the sale...and it's back to the distillery for all.

Although I personally do not happen to agree with these opponents of the bill, the larger political reality is that they have convinced enough legislators across the state to withhold support for the bill.  For citizens, then, who desire a privatized system in Pennsylvania, they must exert pressure on these legislators to be open to privatization proposals when such are revisited this fall.  Currently, negotiations do continue to try to put some old wine in a new bottle, and craft a bill that will attract enough support to pass through the legislature.  However, in the meantime, as we head out to summer gatherings, Pennsylvania will continue to serve up drinks under a government-run and operated state store system.