PLCB Limitations Shackle Entrepreneurs

“I’ve got products in the pipeline that I can’t sell, because they didn’t get approved,” said Mike Gonze, president of Dreadnought Wines in a Pittsburgh Post-Gazette article that perfectly encapsulates why state government should not be in the booze business.

In the article, Bill Toland details how the Pennsylvania Liquor Control Board (PLCB) had to place a moratorium on special liquor orders (SLOs) because they were short on staff. In this instance, short on staff means losing two of four data-entry employees in the PLCB's special liquor order processing unit.

If you're wondering how losing two employees could cause a backlog, and headaches for entrepreneurs, here's a look at how the PLCB handles SLOs: 

The process works like this: A vendor finds a new wine or spirit and wants to distribute it to buyers in Pennsylvania. First, the vendor must ask the state to approve the new item. Once that item is approved—a process that used to take a few weeks but now is taking several months—an individual buyer or a restaurant can order it by calling the PLCB’s special purchases division, or by stopping by a state store to place the special liquor order in person.

After the order has been made—some vendors require a minimum order of six bottles—the vendor sells the product to the state, which applies its own price markup and re-sells the item to the end buyer and delivers it to a wine and spirits store for pickup.

It’s a complicated process, complicated further by the slowdown. Small vendors who don’t represent or import high-volume wines and spirits rely on the special liquor order process for much, if not all, of their sales traffic.

To state the obvious, our booze monopoly has limitations that consistently fail entrepreneurs and consumers. But the news isn't all bad.

After receiving some pressure from those affected by the decision, the PLCB decided to end its moratorium on new SLOs. Yet, this decision does not solve the underlying problem: the government’s inability to efficiently manage a business.

Losing two state employees should not have serious repercussions for numerous businesses and their patrons. Imagine if a private company told customers they had to put a hold on all orders. It wouldn’t be in business for very long. The same can't be said for the PLCB. Despite the Board's less than stellar operation, it remains with us today.

Naturally, many will tout "modernization" as a solution to the PLCB's innumerable problems. But recent modernization efforts have been both futile and expensive. A case in point is the wine kiosk program. A purportedly “free” initiative, the program now has a price tag of $300,000 due to legal costs, according to Kari Andren of the Tribune-Review.

The only way to avoid such expensive mistakes, and fix our outmoded system, is through full privatization. That means turning over the retail and wholesale side of liquor sales to the private sector, which would end the bureaucratic backlog hampering businesses.