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In The Market For A Free Market

Pennsylvania is mulling the decision to privatize its “Wine and Spirits” (no beer) stores.  From the New York Times

Joe Conti, a former state lawmaker and restaurateur in Bucks County who is now chief executive of the Pennsylvania Liquor Control Board, said the state would do a better job than private stores of preventing sales to minors and to already-tipsy customers because state workers “aren’t incentivized to sell.”

The state has closed nearly 50 unprofitable stores in the last couple of years and consolidated some.

So, You should buy from us because we suck at selling.  And not only is the admitted lack of selling incentives silly, it is also just down right wrong.  A private bar owner is HIGHLY incentivized to prevent the sale of alcohol to minors because it risks his liquor license — his livelihood — as well as potential legal issues, etc.  AND by proxy a good private business owner is going to incentivize his employees to uphold this same level.  ($25 bucks for every confiscated fake ID is one real incentive that comes to mind).

I’ve worked in restaurants and bars for years and perhaps I am missing some nuance of running a goods to go store — but how could there possibly be so many unprofitable stores?

  • The goods tend to have long shelf lives.
  • There is NO competition.
  • There is no high skilled labor cost associated (aka high end chef, etc).
  • In more secluded areas in which there are not a lot of bars and restaurants, you would think the goods to go stores would do well.
  • Those secluded areas are also likely in western PA where folks can’t easily go to NY or NJ to purchase the goods.

So, what’s up with that? Joe Conti is right.  There are no incentives.

One side note: I HIGHLY enjoy Pennsylvania’s private beer distributors.  They’re often run by a single person or family.  Beer geeks. Yes.


One Response

  1. The less state run enterprises, the better. They can always find a way to do it more expensively.

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