By Alex Halper, Director of Government Affairs
Private businesses in practically every other state can sell beer, wine, liquor, canned cocktails, and other popular products, and typically, in one location as a convenience to customers. So why can’t businesses do the same here in Pennsylvania? Because a 90-year-old state law that got the Pennsylvania state government into the booze business is still on the books today. It’s time for that to change.
Nine decades after the end of Prohibition in 1933, we’re still being held back by laws enacted when then-Gov. Gifford Pinchot – who himself was opposed to alcohol – convened a special session of the state’s General Assembly to “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.” These laws that allowed the state to control much of the sale and distribution of alcohol still exist, inconveniencing customers and denying private-sector businesses economic opportunities.
On the bright side, some progress has been made in recent years, and Pennsylvania businesses, as expected, have shown that they can handle alcohol sales responsibly. Despite strong opposition from special interest groups, reforms enacted in 2016 now allow supermarkets and convenience stores to sell beer and wine, even under strict and often confusing guidelines. Ask these businesses if they appreciate this new opportunity or ask customers if they enjoy the convenience. Ask them if they want more economic opportunity and convenience or prefer a system designed for inconvenience and higher costs.
Further privatizing alcohol sales will also help curb the so-called border-bleed, which sends flocks of Pennsylvania residents to neighboring states like Maryland or Delaware for different or less expensive alcohol – often all in one location. These dollars benefit out-of-state employers and tax revenue being invested in other local economies.
Did you ever discover a new favorite liquor while out of state only to come home and find it’s not sold in Pennsylvania? Perhaps you hear of a unique bourbon or fine wine, but Pennsylvania’s Liquor Control Board has for some reason decided not to carry it? Privatizing Pennsylvania’s system of alcohol sales will likely expand product selection and improve customer convenience, which will result in more sales and higher tax revenue, a win-win for the state, businesses, and customers.
Opponents talk up revenue the current system delivers to the state, but in 2021, more than 75 percent of money transferred to the state’s General Fund came from taxes, including $164 million through the sales tax and $416 million through the liquor tax. It’s safe to say that this revenue would be retained under a private system. What’s more, private businesses would also pay corporate taxes, which the government doesn’t pay.
State government should focus its attention and resources on enforcing the laws, combatting abuse, and preventing underage drinking.
The PA Chamber will advocate to get Pennsylvania out of the booze business and allow private entities to do what they do best: sales and customer service.
Have questions about this topic? Email Alex Halper or find out more on this topic.