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How much would privatizing liquor sales really help?

The pros and cons of a perennial Pennsylvania debate

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The Pennsylvania House and Senate recently passed a bill to privatize the state's liquor system, rekindling the flames of a debate that has smoldered for decades. As expected, Gov. Wolf silenced this round of bickering with a veto. Nevertheless, the bill marks Pennsylvania's closest brush with privatization since state control was established more than 80 years ago, and it's beginning to feel like less of an if and more of a when. But will it be good for the consumer?

Depends. "Generally speaking, the big issue with privatization is figuring out how to maintain the revenue stream that our existing system generates for the state government, and then being able to say with a straight face that retail prices aren't going to skyrocket," explains Nathan Lutchansky, bar manager at Lawrenceville's Tender Bar & Kitchen and a longtime close observer of the Pennsylvania Liquor Control Board.

Any analysis of the most recent bill (known as HB 466) involves considerable speculation, and supporters of privatization rally around cries of better selection and pricing. But according to Lutchansky, this bill would likely have had the opposite effect, due to sizable fees imposed on retailers and wholesalers, and additional fees to register new products for sale. When Washington state privatized in 2012, for instance, prices shot up and selection began to erode.

On the other hand, HB 466 would have finally allowed beer, wine and spirits to be sold under the same roof. And for Lutchansky, even a flawed privatization bill might be better than nothing. "There's certainly a lot of sentiment out there that any opportunity for privatization should be jumped on when the political will is there, with the expectation that the broken parts [e.g., product selection] can be fixed later," he explains.

Though HB 466 is dead, a new and (hopefully) improved bill will surely take its place before long. And there is always the chance that the state will modernize the current system and give consumers the selection and convenience they demand.

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