Study doubts benefit of state-store control

Barbara Miller

Nov. 3, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- A new study that looked at state-controlled liquor-control systems and private systems questions long-held assumptions that state-run stores help control alcohol abuse and reduce problems with underage drinking.

Over time, there is no significant reduction in underage drinking or binge drinking in states with full control over retail liquor compared with those that have privatized the business, according to the report sponsored by the Commonwealth Foundation, a conservative nonprofit public policy institute based in Harrisburg. The foundation generally supports privatization of services that it considers to be outside of core government functions.

Pennsylvania ranked 22nd among 48 states tested in incidence of underage drinking, and 34th in per-capita consumption, the report said. The authors also found no apparent advantage in the rates of alcohol-related deaths for states with state-owned systems.

"Divestiture of Pennsylvania's state liquor stores would represent a financial windfall to the state while posing no threat to public safety, as it would not result in the social ills many opponents of privatization fear," the report stated.

Wendell Young, president of Local 1776 of the United Food and Commercial Workers, which represents 3,000 state liquor store employees, said he is not surprised that the foundation funds a study that is going after the state store system as a way for businesses to make more money. He describes the foundation as a "right-wing, pro-business group."

Young said other studies show that Pennsylvania is "head and shoulders above the crowd" on safety and security issues relating to alcohol sales and use, and that neutral studies support the current system.

"When you have an asset so valuable that taxpayers benefit from it, there will always be corporations funding lobbying efforts to take it away from the taxpayers for their own profit motives," Young said.

Liquor Control Board spokesman Nick Hays said the board takes no position on privatizing Pennsylvania's 619 state-owned liquor stores. But he said he believes its zero-tolerance policies on sales to minors or the visibly intoxicated are an industry standard.

Hays noted that PLCB retail clerks routinely run about 1 million age-verification checks a year and block sales in about one-third of those cases. The PLCB believes it is up to the Legislature and governor to decide the appropriate role of government in the sale of wine and spirits.

Antony Davies, associate professor at Duquesne University in Pittsburgh, one of the study's authors, said consumption might decrease when controls decrease because people might buy less alcohol per trip.

Davies said the study found that when Iowa and West Virginia removed liquor controls, consumption of beer went up but consumption of hard liquor went down.

"State controls appear to cause people to consume alcohol in 'bursts' -- buy a lot, consume a lot -- rather than to buy and consume smoothly. Two natural results are increased binge drinking and increased DUI fatalities," Davies said.

Davies said that greater control doesn't reduce underage drinking because it is irrelevant whether the person supplying the alcohol to a minor gets it from a controlled market or not.

Privatization legislation introduced in 2008 by then-state Sen. Robert Wonderling, R-Montgomery County, did not move forward, and there is no pending legislation in the Senate.

In 2007, The Reason Foundation, a national public-policy research and education institute, estimated that full privatization of Pennsylvania's wholesale and retail liquor structure could generate $1.7 billion in state revenue.

Young disputed the figure. He said the state would lose some of the $500 million it gets in alcohol sales tax if private companies would own the state stores.

"We have a system that pays for itself, returns profit for the taxpayers, has the best level of security and safety for the community, and provides good jobs. Why would we want to mess with that?" Young said.

Staff writers Charles Thompson and Jan Murphy contributed to this report.

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