Monopoly Money
By Jay Ostrich

Growing up in Pennsylvania, I enjoyed playing board games over the holidays, and none more than Monopoly. The possibilities were endless, the rules clear, and the objective simple, and it even had cool Keystone State references. But in the end, there could be only one winner, leaving the other players bankrupt and broken. Such are the ends of all monopolies: Just ask Pennsylvania's wine and spirits consumers, who have been playing the game since 1933.

Sadly, the state government's alcohol sales monopoly changes the rules as it goes, and it's playing with your money - drinkers and teetotalers alike - while picking wine winners and liquor losers. And now, in a desperate move to prove the agency's value, Pennsylvania Liquor Control Board officials have expanded their monopoly even further.
In a recent investigative report, the Pittsburgh Tribune-Review uncorked an LCB plot to use millions in taxpayer money to research, copyright, brand, advertise, and market more than 30 "in-house" wines and spirits to compete with private labels for shelf space and consumers. That's right, taxpayers: You now own a line of government wine and spirits.


Unfortunately, shoppers can't tell the difference, with the in-house brands going by exotic-sounding names like TableLeaf, La Merika, Hayes Valley, Las Parcelas, and Vinestone.
But forget for a moment the utterly unexplainable phenomenon of a government agency competing unfairly with private businesses while using millions of tax dollars to advertise and market such products. Forget, too, the violation of public trust that has launched external and internal investigations of the board's disastrous decisions. In the end, it's about whether the government has any right to be in the alcohol sales business given that the private sector can provide more convenience, better selection, and lower prices.


Some argue that the LCB somehow protects citizens from the social ills surrounding alcohol abuse. It's a notion easily dismissed by rigorous academic studies and empirical observation of non-control states, many of which have lower rates of alcohol-related deaths and illnesses. Government-run liquor stores simply don't prevent alcohol abuse.
But they do motivate many Pennsylvanians to openly break the law. 

According to a taxpayer-funded study commissioned by the LCB, bootlegging is common in the state. In Philadelphia and eight other border counties, nearly half of those surveyed had broken the law by buying alcohol in other states and bringing it into the commonwealth. This "border bleed" cost Pennsylvania nearly $100 million in sales and $40 million in taxes.

This was never more evident than when the LCB made the curious decision to close all of its State Stores in the aftermath of Hurricane Sandy - even though liquor stores just yards across the border remained open for business, drawing parking lots full of Pennsylvanians.

Nearly 80 years of state liquor control have produced a monopoly of manipulation, mediocrity, malfeasance, and mismanagement. A small cadre of cronies are counting their winnings while Pennsylvania's businesses and consumers are being bankrupted by bootlegging and border bleed.

They've had their turn. We've played by their unfair rules. But now Pennsylvanians are demanding that their legislators declare the game over for this out-of-control agency.

Jay Ostrich is director of public affairs at the Commonwealth Foundation. For more information, see commonwealthfoundation.org.
Monopoly Money
Published:

Monopoly Money

Published: