Pennsylvania Gov. Tom Corbett (R) is looking to break up the state’s Prohibition-era monopoly of state liquor sales in the face of mounting union opposition.
Under the current regime, liquor and wine can only be sold in government controlled stores, meaning “a person can’t leave the grocery store with a bottle of wine to have at dinner,” according to Corbett spokesman Eric Shirk.
Ending the government monopoly has polled well in the past, but has proved nearly impossible thanks to interest groups that profit from it.
“People want to have better choice and convenience,” Shirk said. “There is also the conflict of interest inherent in the government controlling liquor sales: we’re the people telling you to drink safely, but we’re also advertising and selling you the stuff.”
The United Food and Commercial Workers Local 1776 (UFCW) represents about 70 percent of the state’s 5,000 liquor store employees, who earn nearly $40,000 on average to stock liquor bottles and operate the cash register.
UFCW is one of the most politically active unions in the state. It spent nearly $300,000 in political and lobbying activities in 2011, while taking in $12.25 million in dues from nearly 21,000 members and agency payers.
UFCW President Wendell Young IV, who earned about $260,000 in 2011, has been vocal in his opposition to Corbett’s plans.
“Almost all employees will be put out of work and it’ll hurt the taxpayer—the benefits [to state coffers] are hard to walk away from,” Young told the Washington Free Beacon. “It makes no sense from a practical grounds, no sense from the fiscal conservative perspective, so now [the GOP] is using philosophy to justify this terrible hatchet job.”
Corbett said he has taken pains to offset the lost state jobs that accompany privatization, according to Shirk. His proposals include education dollars set aside for displaced workers as well as tax incentives for any private companies that hire former state store employees.
“We actually think our proposals will have a net increase on opportunities,” Shrik said. “We’re going from 600 state liquor stores to possibly double that—those stores are going to need employees. It’s a win-win for hiring.”
Union officials did not respond to calls for comment.
Supporters say the benefits extend beyond a boost in employment.
Consumers should see expanded selection as well as market competition for prices. Pennsylvania’s wine prices are higher than those in its six border states, and liquor prices are the fourth highest in the region, according to Commonwealth Foundation senior policy analyst Katrina Anderson.
“The state chooses what liquor is on our shelves, so we have a very limited selection,” Anderson said. “We will see an entrepreneurial system take its place that will focus on customer convenience, competition, and choice.”
Anderson said no constituency has worked more effectively than the UFCW at preserving the Prohibition-era system. However, she sees their public campaign waning in the wake of several other states, such as Washington, moving out of the liquor industry.
“One of the biggest obstacles is you have a group of people who benefit through the unions who fight very actively to preserve the status quo,” she said. “The momentum is on our side though; you don’t see any states moving backward to state control systems.”
The state is closer than ever to making private liquor stores a reality. The Pennsylvania House voted 105-90 to rescind the monopoly on March 21. That was welcome news to former Gov. Dick Thornburgh, who attempted to overturn the “Soviet-style system” during his second term in office.
Thornburgh nearly finished off the state control in 1986 when the Prohibition-era law’s “sunset provisions abolished the board automatically.”
“I flew around the state slapping FOR SALE signs on all of the stores,” he said with a laugh. “But then the late-[Democratic Gov.] Bob Casey got elected and revoked my orders.”
Thornburgh lauded the legislature for overcoming the historically strong forces of union influence and temperance groups.
“There’s a potent mix of special interest to take on [in privatization], but that’s why this looks to be promising,” he said. “I failed, but I’m heartened by the fact that the lower House is moving forward on this.”