Truths About Food Merchants and Beer

 

 

 

 


» Candidate Corbett's 2010 Promise to Private Beer Sellers. Read more

Four years ago, Candidate Corbett promised opposition to "loosening Pennsylvania's beer sales laws". Pennsylvania's beer distributors ask him to remember and renew that promise.

The latest chapter involving the "privatization" of alcohol sales in Pennsylvania - where beer sales have always been private - began with Candidate Corbett's October 19, 2010, promise:

TOM CORBETT SUPPORTS PRIVATIZATION OF STATE LIQUOR STORE SYSTEM

October 19, 2010

HARRISBURG - Today Republican gubernatorial candidate Tom Corbett announced his support for the privatization of the state-run liquor store system, citing the state's need for additional revenues.

"It is no secret that Pennsylvania and the next governor of this commonwealth will be faced with massive economic challenges left behind by the current administration. As governor, I will present a plan for the privatization of the state liquor store system that helps to address the state's need for additional funds, insures ongoing revenues and minimizes the impact on current workers," said Corbett. "Given the current economic climate in Pennsylvania, state government can no longer be in the liquor store business. We need to move our state out of the 19th century (sic) and refocus state government on its core functions and services for our residents."

Note: State stores were created in the 20th Century. Beer has always been sold by the private sector.

News reports made clear that the private industry that sells beer was not included. Neither GOP candidate talked about so-called "consumer convenience".

Since then, every plan offered has been intended to impact on the private sector that sells malt and brewed beverages. As our Commonwealth moves forward and candidates make new promises regarding the future of our state, we ask Governor Corbett to remember the promises that he made four years ago.

» Don't Stop 'n' Go! Oregon Grocers Touting Privatization Kiss Off Convenience Stores, propose 71% tax increase, back minimum pricing. Read more
The Northwest Grocers Association in Oregon filed initiative petitions to "privatize" liquor sales and maintain the state's alcohol profits by raising taxes 71%. The proposal excludes convenience stores - those under 10,000 square feet.

Documents filed in Oregon State include these items for consumers: "Current markup of prices replaced by 71.7% tax, plus per bottle tax, taxes adjusted in 2017; establishes minimum price."

In Ohio, a state often mentioned as a model of convenience by the Pennsylvania Food Merchants Association, there is a 25% minimum markup on beer and minimum pricing on other alcoholic beverages. 

The retailers in Oregon watched as the voters in the neighboring State of Washington rejected a referendum to privatize the liquor stores with a "no" vote. Since retailers had millions to spend for the privilege of selling alcoholic beverages, they conducted post-referendum focus groups to ask voters a simple question: "Why did you vote 'no'?"

The answer: people didn't want to empower convenience stores to sell these beverages.

The result was that the next referendum in November of 2011 where 60% of voters Washington accepted the proposal since it excluded convenience stores, and that lesson has followed through to the current effort in Oregon which limits stores size to 10,000 square feet minimum.

Here in Pennsylvania, convenience stores, mini-marts, and the devastation of the small, family-owned businesses that sell over 80% of the beer has been part of every plan. The public's reaction against convenience stores selling alcoholic beverages is easy to understand. Pennsylvania has seen the challenge of Philadelphia Stop 'n' Go's selling beer by former Mayor Ed Rendell.

The "beer run" in which a customer steals the beer has become commonplace and has led to injuries and deaths.

Back in 2010, as a candidate, Tom Corbett issued a press release saying,  "As governor, I will present a plan for the privatization of the state liquor store system that helps to address the state's need for additional funds, insures ongoing revenues and minimizes the impact on current workers."  Reporters noted that as to Corbett and his opponent, "both candidates oppose loosening Pennsylvania's restrictive beer sales laws."  It would make common sense that the General Assembly, in reacting to a 2010 campaign promise of Tom Corbett, should take into consideration the political lessons from two large western states which would indicate that convenience stores should be excluded from any proposal. 

» Consumer Convenience? See the selections available in Virginia convenience stores. Read more

Virginia convenience stores offer "consumer convenience" in wine and beer, but that means access and not selection.

This McLean, Virginia, convenience stores offers Yosemite Road bottles of wine next to the front door at $3.99, and a selection of bait that is better than the beer.

Plans for Pennsylvania that put "beer everywhere" are going to destroy our specialty retailers while limiting consumer selection. While access to alcohol will increase so will the problems of enforcement as convenience stores become a place to order a shot and a beer, a bottle of wine, and beer for either on-premises or off-premises consumption.

Image your local convenience store with one table occupied by a group of middle-aged men drinking beer while the next table has a group of teenagers with junior licenses talking about their baseball game.

» Pennsylvania Convenience Stores selling a shot and a beer? Read more

Some members of the General Assembly have already voted to allow Pennsylvania convenience stores to sell "a shot and a beer".

Any member who cast a vote to eliminate the "gas prohibition" supported this, plus the ability of a mini-mart to sell a single beer to go - "one for the road".

Convenience stores want to receive an "R" license. They advocate elimination of the "gas prohibition", namely the long established law against selling motor fuel and alcohol from the same place, property or location.

The rights included with an "R" are to sell for on-premises consumption the following: distilled spirits by the shot, wine by the bottle, and a single bottle or draught by the glass.

An $8.01 hourly convenience store employee will be able to sell "one for the road", a single bottle of beer for off-premises consumption.

 

» Ignoring prior support; food merchants complain transportation bill will hurt profits. Read more

Despite receiving unparalleled support over the past year from many Republican legislators, food merchants now complain the transportation bill will cause them to "make less" in profits.

Over the past year, some key Republican legislators have been strong advocates for convenience stores, which today virtually monopolize the motor fuel market, to allow them to sell beer, even though these are locations heavily frequented by unaccompanied minors.

During this same year, the United States Navy has eliminated alcohol sales in its convenience stores in an effort to curb abuse.

Despite this historic support, key members of the food merchant community are now slamming the new transportation bill.  In a front page article by Jan Murphy in the Sunday Patriot News (12-1-13), Expect tax to add pain at gas pump, convenience store owners criticize the new law and make these points:

  • "this tax is large"
  • "it will be passed on to consumers"
  • "it will have a negative impact on ... our customers' disposable income"
  • Now people who stop at convenience stores "will have less money to spend inside"
  • it will hurt our profits

What is clear from this debate is that when it comes to public policy issues, food merchants and convenience stores have only one test - what is best for their bottom line irrespective of the impact on our society.

Similar articles appeared throughout the state, including:

State College

The Poconos

Delaware County

Wilkes-Barre

Altoona

Johnstown

» 89% of Americans say Alcohol is a different consumer product - and regulation necessary to keep people safe. Read more

A Center for Alcohol Policy poll shows Americans use great common sense in viewing alcohol products and their accessibility in the consumer market. This supports Pennsylvania model of retail sales - limiting products to specialty retailers such as beer distributors.

Key findings of the poll:

  • 76% of adults are satisfied with the variety of alcoholic products that are available to them.
  • 86% agree that it is easy to find a wide variety of beer, wine and liquor in their community.
  • 75% agree that it is important to have state laws supporting the availability of new alcohol products and the independence of distributors and retailers in order to provide consumers with choice and variety in the marketplace
  • 81% believe states should regulate alcohol because it is different from other consumer goods.
  • 89% agree that government regulation is necessary to keep people safe, in some instances.

In viewing all polls, one should keep in mind that about half of our adult citizens do not consume alcoholic beverages. This is important to keep in mind when viewing the results of political polls that are alleged to have been taken. For example, The Commonwealth Foundation reports, "According to this independent analysis of 1,100 likely voters, 66 percent want to be able to purchase beer, wine and liquor in a variety of private stores -- just like citizens in almost every other state."

However, in poll after poll, here and elsewhere, half of Americans do not drink - thus they can't possibly care about buying alcohol products and the co-called "consumer convenience" argument that is being marketed by the grocery and convenience stores. In fact the Centers for Disease Control says "On a given day, one third of men and 18% of women consume calories from alcoholic beverages" meaning of course that on a given day in America 67% of men and 82% of women "do not consume any alcohol beverages".

» "Five Finger Discount" plagues Washington State Grocery Stores selling Alcohol. Read the latest

Washington State voters rejected alcohol sales in convenience stores - grocery stores now see huge thefts.

Police: Walla Walla liquor thefts running high

Police say booze theft reports have shot up in the past four months compared to the start of the year.

Story by Vicki Hillhouse

Friday, November 1, 2013

WALLA WALLA - Easy access to liquor on grocery store shelves continues to be an intoxicating temptation for shoplifters.

Total alcohol thefts from local grocery stores continues to rise, according to a report from the Walla Walla Police Department.

Reports of stolen alcohol from the last four months of the year have already exceeded those from the first six months. And that was when Walla Walla had already experienced a 175 percent increase in reports of alcohol theft compared to the first six months of 2012 before the privatization of liquor sales.

What's more, police believe this is just a fraction of the actual thefts.

"I think we're really just scratching the surface on what's being stolen," said Walla Walla police spokesman Tim Bennett.

Since the start of the year the department has fielded 68 reports of liquor theft in the city. More than half of those - 35 - have taken place in the last four months, after Bennett reached out to retailers on strategies to deter thefts.

About 74 percent of the reported thefts have come from the city's two Safeway stores, on Rose Street and on Plaza Way, Bennett reported. That doesn't necessarily mean Safeway has more than others. But the store has reported more.

In College Place, there have not been many reports of liquor thefts from the city's Walmart store, but that doesn't mean more aren't happening, said College Place Police Det. Roger Maidment.

"I'm not seeing (reports) every day," of liquor thefts, Maidment said. However, the large size of the College Place store probably helps shoplifters avoid immediate detection, causing a delay between when a theft occurs and when it's discovered.
"If it was a smaller store, they would notice it," he said.

Bennett said gauging actual thefts is impossible. Stores don't have to disclose their losses to the police. Plus, many of them may not even realize a theft has occurred until they review video or evaluate their inventory.

Local operators of larger chains may not be able to do more to deter thefts because they don't have the authority to stray from corporate practices.

Bennett said a profile of sorts for the average liquor shoplifter hasn't been established because the only time the police can glean information is when someone is actually caught. That's been seldom.

The presence of alcohol on store shelves may actually be the tipping point for someone who wouldn't otherwise shoplift, Bennett said.

"You look at the risk versus reward," he said. "For a candy bar or a can of beans, it's not worth it. But for someone who could end up as the big shot at a party by bringing alcohol, that reward goes way, way up."

Bennett said a Safeway he encountered in Alaska had the right idea by building the liquor store portion as a separate entity within the grocery store.

He said locally Walla Walla's Harvest Foods has appeared to deter liquor thefts by keeping it all behind a counter at customer service.

Ultimately, he believes that may be the direction Washington stores go if shoplifters continue to opt for the five-finger discount.

"Down the road there's no doubt in my mind that alcohol is going to be treated that way," he said.

» Pennsylvania Law makes illegal a liquor licensee's sale of "liquid fuels" from same "place or property". Read more

Pennsylvania wisely prohibits sale of alcohol and gasoline from the same "place or property". Most of our citizens must buy motor fuel. Selling alcoholic beverages at the same time in the presence of unaccompanied minors has been proven to be unwise in other states. Yet, certain retailers keep asking the LCB to ignore the law.

The legislators who have made the Commonwealth's policy choices for the past 80 years have made it clear and agreed: selling alcohol and gasoline from the same place or property does not mix. The Liquor Code clearly says:

  • The board shall refuse any application for a new license, the transfer of any license to a new location or [even] the extension of any license to cover an additional area where the sale of liquid fuels or oil is conducted. Section 404.
  • No license shall be transferred to any place or property upon which is located as a business the sale of liquid fuels and oil. Section 468(a)(3).

Yet, despite this clear unambiguous, mandatory language, certain retailers keep applying, trying to circumvent the law with gas pumps that take cash outside while clerks, responsible for those pumps, are selling alcohol inside. As stewards of alcohol enforcement, the LCB developed the "pizza hut" rule to deal with unaccompanied minors. However, with convenience stores they have turned a blind eye to these same problems since these retailers have become community hang outs -- teenagers on a junior license using them as a nightly or weekend destination.

Regarding this Policy:

  • The Shippensburg police chief opposes the application of a convenience store for a liquor license near the university - it is currently operated (without beer) and, he says, is a nuisance student hangout. On "thirsty" Thursdays, Fridays and Saturdays, when students are in town, it is packed. He arranges for a patrol car to park next door. This retailer has consistently declined to provide additional security, according to the chief. As reported in "Free My Beer",

Shippensburg Police Chief Fred Scott said in a recent letter to the editor that he opposes the transfer of a liquor license to Sheetz: "I am not in support of Sheetz selling beer at the Shippensburg store because of the proximity of the university and for what I feel is their failure to provide adequate security at the store at this present time," he stated in his letter. The chief told council that the company has refused to provide additional security.

  • This rule prohibiting the sale of alcohol and gasoline is long standing in our state. It was adopted in 2009 in France, effectively rejecting policies that allowed alcohol and petrol sales from the same location;
  • The concept of allowing convenience stores to sell alcohol was rejected in by Washington State voters in its referendum process;
  • In an effort to deal with problems related to alcohol consumption, the United States Navy and Marines are limiting sales overall and ending sales from their mini-mart type stores;
  • The problem of the "beer run" is real, and a quick search of the internet turns up numerous problems from those states which allow the sale of alcohol products from convenience stores, with associated violence and even deaths.
  • Wawa had a license in Philadelphia for a year, during which it was issued nine citations, 8 of which were for underage sales.

Learn more about the Beer Run here

Wawa singled out by State Senate for violations

 

» Southwest U.S. Convenience Store "Beer Runs" now involve shootings, crashed cars and deaths. Read more

The "beer run" that became prevalent in the U.S. Southwest has become far more serious. A string of recent incidents involves firearms, shootings, tasers, pepper spray, crashed cars and deaths.

In its public referendum involving the sale of alcohol, Washington State voters wisely rejected the sale of alcohol in convenience stores. Here are a few of the most recent serious events from the U.S. Southwest. A single well-known Pennsylvania convenience store in 1 year had 8 violations for underage sales.

October 15 -- Glendale Arizona Police are looking for a man who shot a convenience store security guard during an attempted shoplifting. Inside the store, the suspect was approached by a plainclothes security guard; a struggle ensued. A second security guard in uniform responded to help. The suspect pulled out a weapon and fired upon the uniformed guard. Despite wearing a bulletproof vest the guard still sustained one gunshot wound.

September 30 -- CORPUS CHRISTI, Texas - The owner of a convenience store has been charged with murder for allegedly shooting a 39-year-old man who tried to steal beer from his shop, according to CBS affiliate KZTV.

September 25 -- A $1,000 reward was offered for information leading to the arrests of two men who robbed the South Phoenix convenience store at gunpoint on July 3.

September 20 -- Phoenix police investigated a beer run that ended with a 25-year-old man dead. He died from injuries after security guards at a convenience store tackled him to the ground while he was allegedly engaged in a beer run, stealing beer at night from a convenience store.

August 9, 2013 -- Police have identified and arrested a man who they say is responsible for at least 36 "beer run" thefts from Phoenix convenience stores.  The 43-year-old suspect is accused of creating losses to the convenience store pegged at $2,000. Detectives say the accused would steal as many as three 30-packs of beer at a time, and resell it.

July 3 -- Two suspects went into the store in Phoenix. One walked to the beer cooler and picked up some beer. The other suspect stayed at the door with a handgun in the waistband of his pants and held the door for the other suspect who left without paying for the beer.

June 20 -- An 18-year-old man left a San Jose hospital and was taken straight to jail in connection with a high-speed DUI crash that killed his passenger -- a sequence that began with beer being shoplifted from a nearby minimart.  According to police, just before 2 a.m. the pair was seen stealing beer from a convenience store and then seen speeding away. The passenger was pinned inside the Toyota Avalon and died at the scene.

May 7, 2013 - Two suspects are wanted in connection to a Phoenix beer run that became a robbery. The male and a female went into the convenience store; each grabbed two 12-packs of beer before trying to walk out of the store. As the suspects tried to leave, one security guard blocked the door while a second security guard held a can of pepper spray. Both told the suspects to stop. The male suspect pulled out a handgun and pointed it at the security guards demanding they get out of the way, said police. The guards moved and both suspects drove away in a red car.

See video of September 2012 "Beer Blitz" by Tucson teens.

 

» U.S. Marines End Liquor Sales at Convenience Stores. Read more

The Marine Corps will stop sales of liquor at its Convenience Stores and will restrict sales of alcohol at Marine Corps exchanges, according to Stars and Stripes. ...

According to Stars and Stripes, The Marine Corps is preparing to limit alcohol sales on base to reduce alcohol-related crimes and misbehavior, particularly at Marine Marts that would be comparable to civilian convenience stores.

Among the steps to be undertaken: (1) stop sales of liquor at Marine Marts adjacent to barracks, (2) restrict sales of alcohol at Marine Corps exchanges to the hours of 8 a.m. to 10 p.m., (3) limit to 10 percent the amount of retail floor space that can be devoted to alcohol sales in stores that are not designated as package stores, and (4) limit alcohol promotions and marketing on base.

The new rules will help "encourage healthy lifestyles for Marines and their families" and help reinforce current alcohol sales limits and alcohol abuse prevention policies, according to a memo cited by Stars and Stripes.

These new rules put the system used to distribute alcohol products in line with the policy that has been long standing in Pennsylvania. Here, specialty retailers in adult establishments sell alcohol to go, and unaccompanied minors are discouraged from being in a restaurant that sells alcoholic beverages.

The Navy began instituting similar rules starting in July. At the time, Chief of Naval Operations Adm. Jonathan Greenert said that when the Navy began looking at the service's sexual assault statistics, officials noted that 60 percent to 70 percent of reported sexual assaults involved alcohol. That prompted Navy officials to examine the culture of alcohol on bases, and Greenert said they noticed that some mini-marts were selling alcohol until midnight or later, and in some cases starting very early in the morning.

» Convenience Store Owner Arrested After Shooting Beer Run Thief. Read more

CORPUS CHRISTI, Texas - The owner of a South Texas convenience store has been charged for allegedly shooting a 39-year-old man who tried to steal beer from his shop.

News reports quoted Corpus Christi police as saying a known gang member came into a convenience store on Saturday night, grabbed a couple of packs of beer and tried to walk out without paying. Investigators reportedly said the 52-year-old owner shot the alleged robber before he could get away. The owner was arrested.

Texas Penal Code has specific provisions relating to the use of deadly force.

Convenience stores in the southwest are now employing security guards - yes, more than one - and in one incident when two guards tried to capture a couple engaged in a beer run the man pulled a pistol.

In another incident, the guards tackled the man following the beer run and he was fatally injured in the incident.

Arizona State University has studied the "beer run" and made recommendations. It is noteworthy that in their "smart policing" imitative they do not recommend the cost of adding security guards, noting that the stores are sensitive to the costs. Nevertheless, the problem has increased causing stores to now use security guards.

The "beer run" to steal beer occurs where convenience stores are allowed to sell beer. www.pabeerrun.org.

» Food Merchants' membership drops 25% as it lobbies against small Pennsylvania businesses. Read more

In January 2009 the Pennsylvania Food Merchants reported membership of 1,300 with 6,000 stores. On June 6, 2013, it listed 1,000 members with 4,000 stores. Why the decline?

Clearly, some members quit over the tactics used to allow some of its select members to sell beer, a tactic that they knew would hurt others since it would cause small convenience stores that do not sell beer to face unfair competition and extinction. This tactic enables larger food merchants to compete more effectively against their smaller, independent competitors. Thus, beer in larger grocery and convenience stores enables them to cannibalize their smaller competitors. As one small store merchant said, "If grocery stores can sell beer and my little store cannot, we are no longer a convenience store."

Is it because PFMA irresponsibly compared selling bread to selling alcoholic beverages? In a letter dated May 23, 2012, the PFMA said "we do not feel that state government should determine how many outlets there are for adult beverages". This policy has been rejected by all responsible government agencies including the Centers for Disease Control and the World Health Organization. PFMA promotes the "Ohio Plan", which provides a 25% minimum markup on beer, thus assuring that there would be no real competition.

In testimony on May 14, 2013, before the Pennsylvania Senate, one supermarket chain, which employs over 4,000 Pennsylvania residents, said that the unfair competition created by the plans endorsed by the PFMA would take money "away from each employee's retirement, the communities we give back to, and the low prices we offer our customers."

Data on PFMA membership can be found here.

"The Pennsylvania Food Merchants Association advocates the views of more than 1,000 convenience stores, supermarkets, independent grocers, wholesalers and consumer product vendors. PFMA members operate more than 4,000 stores and employ more than 140,000 Pennsylvanians." June 6, 2013, Press Release, "Pennsylvania Food Merchants Association Asks Senate to Pass a Competitive and Convenient System for Alcohol Sales".

"The Pennsylvania Food Merchants Association/Pennsylvania Convenience Store Council is a statewide trade association representing more than 1,300 retail food stores, wholesale distributors and other associated business members throughout Pennsylvania. The association works to improve the public image, effectiveness and profitability of its members who operate more than 6,000 retail food stores." Jan 13, 2009, Press Release, "Louie Sheetz accepts secretary/ treasurer role for PFMA board of directors."

» Selling Fuel and Beer Together Leads to Arizona Violence. Learn more

Three separate incidents in Arizona demonstrate how tough it is to stop the "beer run" and related violent behavior in convenience stores. Not even the presence of two security guards is sufficient.

Despite a Phoenix convenience store's stated policy of "not to use physical force or chase after beer runners," KPHO reported that "police are investigating a beer run that ended with a 25-year-old man dead" after he was injured on August 31 when "security guards tackled him to the ground."

This incident follows another, reported earlier, when two security guards in a sister convenience store approached a couple engaged in a beer run, threating the thieves with pepper spray. The "male suspect pulled out a handgun and pointed it at the guard" before they escaped.

A "beer run" has the potential of becoming an armed robbery. A $1000 reward is being offered as a result of another incident in which one stole beer while the second waited at the door with a gun in the waistband of his pants.

Sadly, it is well established that convenience store policies promoting non-resistance can potentially make the problem of the "beer run" worse.

"To make the working environment as safe as possible for employees, 'virtually every retailer has a policy of non-resistance,' explained Jeff Lenard, director of communications for the National Association of Convenience Stores (NACS).

"Of course, news of these non-resistance policies can become more widespread as stories such as this one gain momentum locally in the news media -- arguably fanning the flames of a latent trend." Convenience Store News, October 23, 2002.

In Arizona, where a university has studied the beer run, some stores are now using two security guards. Is this the atmosphere legislators want for Pennsylvania?

The sad fact is that when beer is made available in high traffic areas selling motor fuel to the general public at all hours, and from a business that encourages unaccompanied minors to enter, that there will be beer runs. See www.pabeerrun.org.

Pennsylvania has the best system: beer cannot be marketed in any store that also sells gasoline or other motor fuel. This keeps beer out of convenience stores. Beer is sold here by specialty retailers in adult oriented establishments such as taverns and beer distributors, businesses who depend upon alcohol sales for their livelihood that are secure and closed when the law does not permit the sale of alcohol.

» Wal-Mart Beer Marketing Is Contrary to Good Alcohol Policy. Read more

Many current legislative proposals regarding alcohol sales in Pennsylvania take two steps backwards for Pennsylvania's small businesses and none forward.

Some 2013 legislative proposals even support Wal-Mart’s plan to "drive traffic" selling beer at almost cost, something that is contrary to sound public policy recommendations dealing with addiction and alcohol policy outlined by the US Centers for Disease Control and World Health Organization.

Wal-Mart is so committed to becoming American’s largest beer retailer that it is now selling brew at almost cost to "drive traffic".

At the same time, Bloomberg reports that Wal-Mart is increasing markup on other food items.

Responsible policy makers, not only in the United States, the United Kingdom and worldwide, all recognize that since alcohol products are not just another commodity, low prices and enhanced access are not in the public interest. The CDC published, "Addressing A Leading Risk For Death, Chronic Disease, and Injury" to focus on the consequences and strategies for dealing with the problem.

Alcohol: No Ordinary Commodity - Research and Public Policy Second Edition is a collaborative effort by an international group of addiction scientists to improve the linkages between addiction science and alcohol policy.

Privatization: a lose-lose. The final irony is that the Centers for Disease Control and Prevention reports that while "privatization" is contrary to good policy because it increases access, it also does not improve price.

» CDC Says NO to privatization! Social and public health impacts outweigh alleged benefits. See why

Expanded access to alcohol is becoming a national health problem, according to the Center for Disease Control in its recently published Community Guide on the impacts of liquor privatization across the nation. The Center reviewed 44 different national studies to reach its conclusion that expanding access to alcoholic beverages costs state and local governments in excess of $220 billion a year due to increased social, criminal justice and public health costs.

The CDC recently weighed in on Pennsylvania's attempts to spread the sale of alcoholic beverages by urging legislators to consider the many other impacts of privatization.

Summary of Task Force Recommendations & Findings

Based on its charge to identify effective disease and injury prevention measures, the Community Preventive Services Task Force recommends against the further privatization of alcohol sales in settings with current government control of retail sales. This finding is based on strong evidence that privatization results in increased per capita alcohol consumption, a well-established proxy for excessive consumption.

The Task Force recommendation against privatization of retail alcohol sales is based solely on evidence related to public health consequences, which may be one of several factors to consider when making decisions on whether to privatize retail alcohol sales.

» U.S. Navy bans alcohol from Convenience Stores. Read More

As the Navy works to curb alcohol abuse in a push to reduce sexual assaults and other crimes, the top brass has ordered it to stop selling liquor at its mini marts and prohibit the sale of alcohol at any of its stores from 10 p.m. to 6 a.m.

Navy Changes How Alcohol Is Sold on-Base
NAVAL STATION NORFOLK, Va. August 17, 2013 (AP):

"’It's not going to fix everything, but it is a real step in the right direction,’ said David Jernigan, Johns Hopkins University's director of the Center on Alcohol Marketing and Youth. ‘Historically, the military, as elsewhere, has viewed these problems as individual problems to be dealt with by identifying the individual with the problem. While that's important, the research shows it's much more effective actually to look at it as a population problem and to deal with things that are affecting everybody across the population.’”

“Robert Parker, a University of California at Riverside sociology professor who has studied the links between alcohol and crime, said restricting on-base alcohol sales should help even if there are places to buy it nearby.”

Read the comments by James Joyner

From Philly.com:

In Pennsylvania, sales of alcoholic beverages are made by specialty retailers, with beer being sold by private enterprise adult-oriented businesses that, should they lose their liquor license, would lose their livelihood. Some in the General Assembly, under the guise of “consumer convenience”, are trying to make beer, wine and spirits more accessible, even in stores that cater to youth. Access to alcohol is considered a national problem in the United Kingdom where a study by the Royal College of Physicians said drink related health problems could account for up to 12% of total NHS spending on hospitals, about £3 billion.

For more on the problems of allowing convenience and grocery stores to sell alcoholic beverages see www.pabeerrun.org.

» Liquor Privatization adds teen "Flash Rob" to Beer Run in Washington State. Read More

Liquor Store thefts increased with Washington State Privatization and the teen "flash rob" now reported along with the "beer run".

Pa Food Merchants report, "Retailers in Pennsylvania and surrounding states have been plagued by teams of criminals that steal valuable products from supermarkets and convenience stores."1

"Some media outlets have reported on 'flashrobs,' in which groups of teens descend on a store and run off with hundreds or thousands of dollars of liquor. The Oregonian

Liquor theft soars in Washington after privatization, but remains low in Oregon

By Harry Esteve, The Oregonian, August 17, 2003

Liquor theft soars in Washington after privatization, remains low in Oregon A sudden, dramatic rise in liquor thefts in Washington could be seen as collateral damage from the state's recent move to privatization -- part of the cost of changing to a free market model.

Or, the hike in booze-stealing could be read as a cautionary tale for Oregon, where voters may get asked to end our distinction as the lone West Coast state with a government monopoly on liquor sales.

"I was reading a lot of stories about the high theft rate in Washington," said Christie Scott, spokeswoman for the Oregon Liquor Control Commission. "I was curious about Oregon's theft rate. I knew it was going to be low, but I was just flabbergasted at how low."

In the past year, a grand total of $7,680 worth of booze was lost to burglaries and theft in Oregon, or 0.003 percent of the state's $237 million stash, according to OLCC data. Oregon's average yearly liquor theft is $9,206 or about one-tenth of 1 percent.

Those numbers are infinitesimal compared to what's happened in Washington since most sales moved from state-controlled liquor stores into more loosely monitored supermarkets. "

No one has a real handle on the amount of theft" because stores are no longer required to report it, said Brian Smith, who is Scott's counterpart on the Washington State Liquor Control Board. But anecdotes and news reports suggest the amount lost to theft in a single week might surpass Oregon's annual figure.

Some media outlets have reported on "flashrobs," in which groups of teens descend on a store and run off with hundreds or thousands of dollars of liquor. On Mercer Island, authorities reported a couple loaded $2,000 in liquor into a shopping cart and pushed it out the door without paying. Walla Walla police reported a 175 percent rise in liquor theft complaints over the first six months since privatization took hold.

The theft rate in Washington before privatization was under 1 percent, Smith said.

It only makes sense, he and others say. State controlled liquor stores are tougher to steal from. They're smaller, so customers are easier to track. Much of the liquor is kept behind a counter. Large grocery chains that place liquor in aisles along with any other product, are relatively easy targets for thieves.

"We've heard anecdotally about five-figure losses out of individual stores," said Mitch Barker, executive director of the Washington Association of Sheriffs and Police Chiefs. The thefts have become a headache for law enforcement, and the association is pushing for the state to require stores to report them.

For competitive reasons, stores have been reluctant to make liquor theft information public, said Joe Gilliam, lobbyist for the Northwest Grocery Association. He said grocers are happy to meet with authorities to help solve the problem, but forcing them to give up trade data "is not going to fly," he said.

Oregon has begun experimenting with liquor sales in large grocery stores. A pilot program established two years ago allowed five markets around the state to start selling liquor inside their stores.

But that hasn't led to an increase in thefts, the OLCC's Scott said, because they operate as a separate "store within a store," much like a bank branch or jewelry department.

The worst year for liquor thefts in Oregon was 2009, when nearly $37,000 of hooch disappeared. That number was inflated by one big case, Scott said. A Northeast Portland outlet was robbed after hours of about $15,000 worth of liquor.

-- Harry Esteve

To read more about the Flash Rob, click here.

To read about big name retailers being caught in Washington State "stings" involving sale of alcohol to minors, click here.

1Page 16, PFMA 2012 Annual Report
» Wal-Mart taking aim at beer business. Pennsylvania will lose jobs if it happens here. Read More

Pennsylvania's 10,000 plus private-sector jobs selling beer would be threatened if the General Assembly enables Wal-Mart to get into the alcohol business.

Business publications are reporting on "Wal-Mart's New Goal: Sell All the Beer".

As reported in Bloomburg Businessweek,

"When Wal-Mart began buying a greater number of locally grown fruits and vegetables in 2010, it made sure its efforts got plenty of publicity. But when Walmart decided it wanted to double its alcohol sales by 2016, it didn't exactly issue a press release."

Another report documents that about a year ago 500 representatives from the alcohol industry gathered at Bentonville for an "adult beverage summit" to be told "how serious the retailer was about selling more alcohol." Its effort will include:

  • A willingness to alter its business model away from buying massive quantities of products directly from suppliers and allowing third-party sellers;
  • Using beer as a "traffic-driving" product, even redesigning its stores to help it with their current "traffic problem", thereby bringing people into their stores;
  • Offering discounts; and
  • Hiring a dozen national alcohol buyers.

The impact of this in Pennsylvania is clear: 10,000 people who work in our Main Street beer distribution system will be out of a job. The investments made by the local owners and distributors in their licenses and businesses will be gone. Few new people will be hired to make up for these losses.

Consumers will, in the long run, see less selection and higher prices overall as the market stabilizes. Competition will decrease and consumer convenience and choice will decline.

Small and midsized Pennsylvania brewers will be threatened. It is common knowledge that Pennsylvania has grown its number of new breweries because of the family-run distribution system that is available for their new products.

In Pennsylvania, 75% of the beer sold for off-premises consumption is through small main street business, locally owned and operated private beer distributors. There are about 1,200 and they employ about 10,000 people. The balance of the beer sold for off-premises consumption is sold through R licensees, most of whom are also small family-owned businesses.

Currently, supermarkets that do not sell gasoline can acquire an "R" license to sell - but they create few, if any, new jobs while eliminating jobs in restaurants that sell wine and spirits.

» Consumer Convenience? 10% of Women buy alcohol – 100% Concerned over potential sales to teens. Read More

So-called "consumer convenience" is a mixed bag. A balance is needed between alcohol control, particularly to teens, and the minority of consumers who actually buy alcoholic beverages, since half do not even drink. "Liquor sales reform" is not going to produce any real change in voter results next year, and may hurt candidates who supported eliminating small business jobs and putting alcohol in convenience stores.

Over the weekend before the 2012 Presidential election, only 10% of Republican women voters surveyed said they "or any household member purchase any product containing alcohol one or more times a week." Beer - a privately sold product - amounted to about half of these purchases.1

A total of 82% of voters buy "bread or bread products" one or more times per week. Typically, surveys show half of the adult population does not consume alcoholic beverages at all.

Voters in the State of Washington went to the polls and rejected liquor sales in convenience stores while approving of privatization. In the May 18 poll by F & M, the issue on whether to "privatize the state liquor stores" ran only stronger than "privatize the state lottery", and these both ran far behind jobs, schools, environment and road repairs. When asked about the "most important" problem facing Pennsylvania today, "liquor sales reform" did not even get a reply.2

The 10% of women who buy adult beverages regularly, and the 90% who do not, along with 100% of the men and women of all parties, have one strong interest in common - the concern that alcohol sales not be made to minors. People care about their young people going to places where alcohol is accessible - the obvious reason voters in other states have rejected convenience store sales.

As the Convenience Store News admitted more than a decade ago, "Of course, beer theft is still a serious industry problem… . To make the working environment as safe as possible for employees, 'virtually every retailer has a policy of non-resistance,' explained Jeff Lenard, director of communications for the National Association of Convenience Stores (NACS).'"

Currently in Pennsylvania, alcohol products are sold in "adult" environments, where the mere presence of a teenager attracts attention. Allowing grocery and convenience stores to sell these products puts young people in the presence of alcoholic beverages on a regular basis. In "Teen shoplifting, liquor a bad mix"3 , a student violator identified the problem and stated the best rationale to bar alcohol sales from grocery and convenience stores, "You're not an automatic suspect when you walk in a grocery store. " Responsible citizens view this as a positive reason to keep liquor sales for off-premises consumption in adult oriented taverns and stores, places where teenagers never congregate.

Clearly, the key is alcohol availability and "Public health agencies have a vital and necessary role to play in efforts to reduce alcohol outlet density." Using Public Health and Community Partnerships to Reduce Density of Alcohol Outlets.

Grocery and, in particular, convenience stores are designed to create an atmosphere that is conducive for teens to have access to alcoholic beverages, whether they buy for themselves or others as described in The Olympian. Truth is this, striking the balance between availability, convenience, price, selection and control, the Commonwealth of Pennsylvania has done an excellent job. There is no real call among voters to "free my beer" and there is no political advantage for the General Assembly to shift the beer market from 12,000 adult oriented independent private businesses to a handful of large grocery and convenience stores.

1MBDA will provide its survey results, but instead urges candidates to conduct their own polls. Ask, do you or any family member purchase alcoholic beverages weekly, monthly or ever? Are voters in Pennsylvania, like those in Washington, concerned about alcohol sales in convenience stores?

2See Page 10, Center for Opinion Research.

3The Olympian, December 9, 2012.

4Several Capital High School students agreed with Graham's assessment that teens are taking advantage of it being easier to shoplift liquor. "You're not an automatic suspect when you walk in a grocery store," said one student interviewed Tuesday in the school parking lot. Another student admitted he's on probation after he was caught stealing liquor from a downtown grocery store. The teen said he took the liquor to sell to other students - not to drink it himself." Read more here

 

» Washington News Cites Need to Control Liquor Thefts — 2 die in Beer Run. Read More

The Walla Walla, Washington, Union-Bulletin just wrote: “The increase in liquor thefts is hardly an unintended consequence of allowing booze to be sold in supermarkets and other retail outlets. Most expected that easier access to booze would result in more people trying to walk out of stores with a bottle or two. But the increase in thefts is far higher than many anticipated across the state.” Read the entire editorial

Nearby, the Associated Press reported, “TACOMA, Wash. -  Police say two men who died in a high-speed crash in Tacoma were apparently fleeing from a convenience store where they had stolen beer.”   Read the entire story

For more about the “Beer Run” and the fact that alcohol sales in convenience and grocery stores creates a far greater risk of thefts from these stores, visit www.pabeerrun.org.

Some stores are posting pictures of suspects (“innocent till proven guilty”) on Facebook. As reported by the Associated Press, “The Circle K Crime Busters of AZ & NV page was launched a few months ago. Along with photos, it also includes descriptions of people suspected of committing crimes at the chain’s locations.”

Read about a convenience store’s effort to fight retail beer theft using Facebook.

For the latest thefts in one convenience store chain in Arizona and Utah (more than 100 this year), visit Circle K Crime Busters of Arizona and Nevada.

» Sale of alcoholic beverages and gasoline together are bad policy - don't remove this ban from our laws. Read More

The Pennsylvania Liquor Code currently prohibits the sale of alcoholic beverages and gasoline from the same location. In 2009, because of alcohol abuse, this provision was added to the laws in France. Why?

The mother of a teen age driver recently wrote:

"When I send my teenage driver for gas or groceries, I really don't want him confronted with promotions for wine, beer or spirits! Today, after the game, young people meet at the mini-mart. Sales of alcoholic beverages will change the character of these places!"

"About 80% of us do not regularly buy alcoholic beverages. People who do are now able to buy these products at adult-oriented outlets. I like that. I don't like having these products forced on me or my family when I go shopping."

"It is time for people who share my values to get involved!"

The same policy considerations apply to those who are predisposed to alcohol problems - they would be tempted every time they stop for fuel.

The liquor "privatization" package now in the Senate hurts consumer selection and distributors. If amendments being proposed to remove the gasoline/ alcohol ban are adopted, there will be greater beer outlet density, more beer in high traffic areas, and more beer where there are unaccompanied minors.

The "beer run", the documented problem of beer thefts from convenience stores, will become common place. See www.pabeerrun.org.

Posted on Facebook is "Circle K Crime Busters of AZ & NV" a page purporting to show security pictures of people entering convenience stores who are alleged by them to have committed a crime inside.

It is posted as a "cause", which is to "Help us make Arizona and Nevada a safer place. We need your help to identify people suspected of crimes at Arizona retailers!"

Listed on the Facebook page are pictures of people with specifics relating to their description, the store, and details of the incident.

The most recent "beer run" was on June 14, 2013. One person was alleged to have made 18 beer runs. On June 20, 2013, a beer run in San Jose resulted in the death of a passenger in a car. On April 14, 2013, three died in Tampa Florida accident while fleeing after a beer run.

The Pennsylvania Food Merchants and Convenience Store Council try to minimize the problem of theft in convenience stores, and how it is aggravated by presence of beer, particularly at night when other outlets are closed.

In Pennsylvania, all beer retailers are specialty retailers who are required to be closed at night except grocery stores that have a restaurant license. Minors who are not accompanied by a parent or legal guardian are not allowed to frequent the premises, such is not the case for convenience stores where teenagers normally "hang out". This portion of the Pennsylvania Liquor Code has a proven record of providing good, common sense regulation.

» Committee vote Monday shows little support for any "privatization" plan in Senate. Click Here

In the Pennsylvania Senate's Law and Justice (liquor) committee, by a close vote of 6 to 5, the language of the Chairman's plan was amended into two bills, HB 790 and SB 100. No senator opposed the process by which HB 790 was "gutted" thereby removing language passed by the House and replaced with the language of the Chairman's plan. HB 790 and SB 100 now contain the same language which is Senator McIlhinney's proposal.

This means that, in effect, and on the record, all members of the committee voted to reject HB 790, the bill touted by Governor Corbett which passed the House in March.

Second, the language of Senator McIlhinney's plan - with 14,000 new outlets including grocery stores selling case quantities of beer plus wine and spirits - is receiving little support. The deciding "aye" vote by the President Pro Tempore at the committee meeting was cast with his personal acknowledgement that he did not like the plan and "concurred with the sentiments of Senator White" (who voted "no"). Senator Scarnati voted it out of committee to "move the process".

Among the improvements in the Chairman's plan over HB 790 was the rejection of convenience stores selling beer.

Right now, there are 23 Democrats in the State Senate who have pledged to vote "NO."

Right now, Senator Don White (R-Indiana) has voted "no" in committee and pledged to vote "no" on the floor. In addition, Senator Joe Scarnati, while he voted "aye" in committee, has indicated that he does not like the plan.

This means that if presented to the full senate, either bill in its current form would likely fail with a tie vote (the Lt. Governor cannot break a tie to enact a law).

Capitolwire: Senate panel guts House liquor proposal.

By Kevin Zwick
Staff Reporter
Capitolwire

HARRISBURG (June 24) – The House’s liquor privatization proposal is gone, for now.

The Senate Law and Justice Committee on Monday approved two identical gut-and-replace amendments – one adopted to House Bill 790 and the other to Senate Bill 100 – effectively eliminating the House’s liquor privatization plan and setting up committee chairman Chuck McIlhinney’s proposal for movement this week.

The committee reported out both bills on a 6-5 vote, with Sen. Don White, R-Indiana, voting with the Democrats against the bills. White cited concerns that convenience in rural areas in his district would be eliminated if state stores were closed. Senate President Pro Tem Joe Scarnati, R-Jefferson, cited similar concerns, but said he voted in favor of the amendments to move the process along.

Both bills are expected in front of the Senate Appropriations Committee on Wednesday, according to Senate GOP spokesman Erik Arneson. Further amendments are expected as the caucus still seeks the 26 votes necessary to approve a proposal in front of the full Senate, he said. Democrats remain staunchly opposed to any privatization proposal.

“The Senate’s going to have their say, and rightfully so. There’s two separate chambers with different viewpoints,” said House GOP spokesman Steve Miskin. “It’s still an ongoing discussion. I think we’ll be able to work through the issues.”

McIlhinney, R-Bucks, said the issue could be taken up in the fall if a product isn’t approved by the fiscal year-end deadline on Sunday, although he thinks a proposal could be approved before lawmakers head home for the summer.

“I’ve been on the record for months saying this is not a budget issue. It was something that the governor would like to see done during the budget, but there’s nothing tied to the budget itself here and this is could easily be something we could do in the fall,” he said. “It’s not something that is tied to balancing a budget, so it could come up at any time.”

Sen. Richard Alloway, R-Franklin, who voted in favor of the bills, said he does not believe a “sweet spot” proposal exists.

“It doesn’t matter what plan we throw on the table, what compromise we throw on the table, every time we move an inch one way we make someone mad on the other side, we move an inch in a different direction we make others mad,” he said.

McIlhinney’s proposal would allow 14,000 current retail outlets to expand their licenses to sell wine and liquor to go. Some of those outlets, including beer distributors, and some supermarkets, convenient stores and delis already sell beer. Hotels and restaurants, which currently sell wine for on-premise consumption, could purchase an enhancement permit to sell off-premise wine and spirits.

The proposal wouldn’t force the state-run liquor stores to close, but the Pennsylvania Liquor Control Board would have the discretion of shutting down underperforming state liquor stores that can’t compete with private market sellers. The wholesale operation would remain under state control while the PLCB and the Legislative Budget and Finance Committee would study the system.

Under the plan, beer distributors could become essentially one-stop shops for wine, liquor and beer, while quantities of wine and liquor would be limited at other outlets. Beer distributors would be allowed to sell six-packs of beer and other licensees could sell up to a case. The proposal also would allow direct shipments from wineries to Pennsylvania residents.

» Washington State voters, happy to have rejected convenience stores, now question "privatization" effort. Click Here

Washington State landslide vote to approve "privatized" liquor stores created an unhappy electorate.

In what was described as a “landslide vote” voters in the State of Washington in 2011 accepted two propositions:

  • Convenience stores should not sell alcoholic beverages.
  • The State Stores should be privatized.

No one in Washington now questions the wisdom of prohibiting convenience stores from selling alcohol.  In fact, as reported numerous places and in government studies, it was wise to not put alcoholic beverages in businesses that are high traffic stores, open all night, and include as a targeted demographic niche groups of unaccompanied minors.  www.Pabeerrun.org

As to the second issue - that of privatization -the landslide has subsided, reality has set in, and even eastern newspapers have picked up the problems with the new system and higher effective taxes. 

The following article appeared in The Philadelphia Inquirer:

How Wash. fared when state stores died

Lisa Jones, a bank teller, received a rude awakening after she and other Washingtonians voted to dismantle their state's liquor system. The first bottle of gin she bought at a supermarket had a cheap shelf price - until taxes at the register added $7.

But, a year later, the appeal of one-stop shopping has her hooked.

"I actually think I end up buying liquor more often," said Jones, putting a bottle of Burnett's gin in her basket with the cat food, cereal, and frozen fries as she and her 13-year-old son wandered the aisles of a cavernous Fred Meyer superstore. "It's so easy when you know it's going to be right there with the rest of your groceries. I don't love the prices, but I love the convenience."

As Pennsylvania mulls liquor privatization, with many legislators trying to get a bill to Gov. Corbett by June 30, people here say the Keystone State would do well to look at how a year-old private system has fared in Washington:

Access to spirits exploded, with the number of liquor licensees going from under 400 to almost 1,500. Liquor sales rose.

Prices went up, too - thanks to new taxes that were part of the referendum. Some voters grumbled that they missed the fine print.

While the state is struggling with billion-dollar budget deficits, its revenue from post-privatization liquor sales has climbed at a pace that exceeded projections.

Customers have flocked to stores across the border in Oregon and Idaho, where liquor always cost less but is now even cheaper by comparison.

Fears that privatization would cause a spike in alcoholism and alcohol-related crimes have not been realized - aside from an uptick in shoplifting. Even so, Julia Dilley, an epidemiologist at the University of Washington, said, "We think alcohol consumption has increased." She is collecting data to see if alcohol-related hospitalizations and traffic crash rates have changed.

More than 700 state liquor store clerks lost their jobs when privatization came. Most were still out of work as of February.

To be sure, the state-run system here differed from the one in Pennsylvania. Washingtonians could buy beer or wine in supermarkets and other stores. Hard liquor was sold only in state stores.

The political battlefield is different, too. Washington voters can change laws via referendum, an option not available in Pennsylvania. And the successful drive to privatize was funded largely by one Washington-based retail chain.

The bill pending in Harrisburg would add no new liquor taxes. Good move, advises Washington Sen. Tim Sheldon, a Democrat who sponsored privatization bills for two decades. He said new taxes confused the issue.

"This can, and should, be done without raising taxes and costing people more money," he said.

But if Pennsylvania does go private - leaving Utah as the only state still in the liquor business - Washington officials warn that the transition may not be smooth.

Rep. Christopher Hurst, head of a committee charged with overseeing the system, said the rollout set off heated battles among retailers, restaurants, and state officials who implemented the changes.

"From a consumer point of view, it was kind of anticlimactic," Hurst said. "There was so much hype that when it finally happened, it turned out to be much ado about nothing. But politically, people are at each other's throats about how this is all supposed to work. ... It will be years before this is settled."

The Costco effect

The old liquor system dated to 1916, when Washington became one of the first states to adopt Prohibition. In 1933, it was among the first to repeal those laws, cementing its reputation as a state open to change. (Last year, the state legalized same-sex marriage and recreational marijuana use.)

But for decades, attempts to retool the liquor system went nowhere. Two privatization bills failed as recently as 2010.

Then came Costco Wholesale. The chain poured almost $23 million into a 2011 campaign to privatize, the largest such single-donor contribution in state history.

Advocates said the change would lead to competitive pricing and more state revenue. Supermarkets printed ads predicting new prices (without including the taxes). Sixty percent of voters said "yes" to Initiative 1183, allowing stores of 10,000 square feet or more to apply for a liquor license.

Then there were the taxes. The Washington initiative had liquor wholesalers pay an additional 10 percent tax on all sales, and added a 17 percent retail tax on spirits sold to bars or restaurants - all on top of existing levies.

The taxes shocked many residents, even those who voted yes. Many had expected prices to fall, and customers were confused by stores that displayed pretax prices. Bars and eateries, meanwhile, dealt with the added taxes by raising the price of a drink.

"A lot of people knew the taxes were there, but didn't fully understand what that meant," said Daren Nies, manager of the Mill Creek Pub in Battle Ground.

Brandon Smith, 37, owns the Dublin Down Irish Pub in Vancouver. He voted yes because he envisioned a competitive market, in which tavern keepers like him could buy directly from manufacturers or stores. But it didn't work out that way - the new taxes made it too expensive to buy from stores.

"We feel lied to," he said.

Bruce Beckett, government affairs director for the Washington Restaurant Association, said privatization exposed the extent of the state's liquor taxation. "The public never had any idea they were paying this level in taxes," Beckett said. But he noted that prices "have already started moderating, and I believe they will continue to do so."

Bonanza on the border

Meanwhile, the initial sticker shock has been a bonanza for stores across the Oregon border. At the Rainier Liquor Store, a small clapboard building in a logging town on the Columbia River an hour north of Portland, Christmas came early last year. Sales have surged anywhere from 20 percent to 89 percent monthly, and Rainier went from being ranked 94th to 44th in statewide sales, said Oregon liquor agent Traci Brumbles. On Fridays, the lot fills, cars park down the road, and customers line up out the door.

"There are still days when we shake our heads and say, 'What is the reason for being so freaking busy?' " said Brumbles, an Oregon liquor agent for 12 years.

She suspects some customers - such as those who buy by the gallon - are bar owners. The store fields calls from customers as far away as Seattle who can no longer find specialty items in their local stores.

Pre-privatization, many Rainier customers already made the seven-minute drive from Longview for the sake of lower prices. As with alcohol brought into Pennsylvania from Delaware or New Jersey, those who bring booze back to Washington are supposed to pay taxes on it. As in Pennsylvania, the law is largely unenforced.

At State Line Liquor Store in Jantzen Beach, Ore., on the river near Portland, manager Rob Babin said his sales were up more than 30 percent.

"We're ecstatic," he said. "Ninety percent of our clientele are from Washington and always have been. We're just getting even more of them."

Babin lives in Washington and voted against privatization. "It didn't benefit anybody in my state," he said. "People kept saying liquor would be cheaper. A lot of them just didn't read the fine print."

As for customer convenience, nearly everyone rates privatization a success. Supermarket shoppers can grab a fifth of vodka, a six-pack, or a bottle of wine along with milk and eggs (or in superstores such as Costco or Fred Meyer, TVs and patio furniture). Shoppers interviewed said they were satisfied with the change. Some noted that the prices are not significantly higher than before privatization. In response to customer gripes, many stores have also started displaying tax-inclusive prices.

One complaint: Selection is often more limited. Whereas state-run stores carried thousands of items, supermarkets may shelve a few hundred.

The change also hurt some smaller stores, which cannot price liquor as low as chains that do bulk purchasing. And competition has a price: Practically overnight, liquor stores near supermarkets went from having great sales to closing. Since the state auctioned off its 167 stores, 46 have closed.

Owners of independent stores, such as T Bros. Liquor Lodge in Olympia, are counting on their variety of hard-to-find items to keep them afloat. The store boasts more than 2,000 kinds of liquor, wine, and beer, in a city with no big-box stores in sight.

"We knew the sales weren't going to be what they were before," said co-owner Andy Thielen. "But it's tough. We're doing more business than any store in town, and we're still barely paying our bills."

It has been tough on the former state liquor-store clerks as well. Of more than 700 laid off after privatization, 490 remained jobless by February, said Brian Smith, spokesman for the state liquor board. "Some of these people had worked in stores for decades," said Tom Geiger, a spokesman for the clerks' union. "The fact of them losing their jobs was something that didn't really get through to the public until it was too late."

(His Pennsylvania counterparts aren't about to let that happen - the union for 3,500 State Store clerks is spending up to $1 million to bash Corbett's "reckless" privatization plan in radio and TV ads.)

Many smaller stores found themselves ill-equipped to deal with a rise in shoplifting of alcohol. As they scrambled to beef up security, the Washington Association of Sheriffs and Police asked the state to require that stores report such thefts.

Still, despite border-crossing, sticker shock, and theft, as of May, the state had collected 10 percent more in liquor taxes than in the previous year, exceeding expectations. Liquor sales rose more than 5 percent.

Beckett, of the restaurant association, believes the system made progress in its first year. "I don't think anyone appreciated that all this wouldn't happen smoothly right away," he said.

Smith, of the state liquor board, agrees. "The people of Washington have very mixed feelings about what they got," he said from a conference room in the board's Olympia office, as he waited for a media horde to descend for the release of new guidelines governing the state's burgeoning marijuana industry.

"People didn't necessarily get what they expected," he said. "They expected that once you got the state out, everything would run more smoothly. . . . But I think that once we start ironing out some of the problems, we'll probably be a model state to look at in terms of the effects of privatization."

Hurst, the legislator tasked with that ironing-out, was more blunt.

"My advice to Pennsylvania is that they should craft the legislation very carefully," he said. "Don't leave any ambiguities in the language. All they need do is look at the mess we've gotten ourselves into in this year."

 

»San Jose Driver jailed, passenger killed following "beer run" Read More

San Jose Driver jailed, passenger killed following "beer run"

By Robert Salonga
Mercury News

June 20, 2013

SAN JOSE -- An 18-year-old man left the hospital and was taken straight to jail in connection with a high-speed DUI crash in South San Jose that killed his passenger, in a sequence that began with beer being shoplifted from a nearby minimart, police said.

Martin Alejandro Acosta-Alvarado, of San Jose, was arrested on suspicion of vehicular manslaughter with gross negligence and both misdemeanor and felony DUI following the Monday morning crime that ended with the death of 40-year-old Henry Olmedo, also a San Jose resident.

According to police, just before 2 a.m. the pair was seen stealing beer from a 7-Eleven at Pearl Avenue and Branham Lane and then seen speeding along Pearl toward the Capitol Auto Mall.

Acosta-Alvarado, who was driving, tried to turn left at Hillsdale Avenue and lost control, hitting a parked car and sparking a chain-reaction that involved four other parked vehicles, police said.

Olmedo was pinned inside the Toyota Avalon he was riding in and died at the scene, according to reports. Police reported finding several beer cans in the car.
Acosta-Alvarado was hospitalized after the crash and released Tuesday, when he was immediately taken into custody at the Santa Clara County jail, where he is being held on $130,000 bail.

Anyone with information about the case can contact Detective Verissa Sadsad at 408-277-4654 or leave a tip with Silicon Valley Crime Stoppers.


Note: Proposed changes in the Pennsylvania Liquor Laws announced this week at a Republican Press Conference excluded any amendment in the law that now prohibits gasoline and alcohol from being sold from the same location. Thus, convenience stores in Pennsylvania could, and should, still be excluded from selling beer.

» Welcome PA Beer Distributors to Harrisburg. Read More

Pennsylvania's licensed beer distributors are gathering in the State Capitol this week to tell legislators how expanding beer sales to big box, grocery and convenience store chains will negatively impact their private sector businesses, forcing the closure of hundreds of small, family-owned and operated distributorships and the layoff of more than 10,000 employees.


» Corbett Press Conference focuses on Grocery Store Competition to Get Beer – why licenses will be harder to obtain. Get the $coop!

Tom Corbett says, "selling liquor is not a core function of government". He should know government doesn't sell beer. About 70% of the money spent on "liquor" is paid to private sector businesses with private employees competing in a private market to sell beer. What is he talking about?

The appearance with him of Scott Karns, owner of a local chain of food markets, makes two points -- this isn't about "privatization" since he talked about beer and Mr. Karns and his employees will be worse off than today if the Governor's proposal becomes law.

Mr. Karns whined that his customers ask him to sell them beer, but he cannot. Wegmans sells beer. Mr. Karns did not bother to explain what caused him to reject buying a liquor license so he can respect and respond to his customer's needs.

Doesn't Mr. Karns know that if the General Assembly adopts the proposed plan of Governor Corbett, "R" licenses will become even more expensive than today? Every convenience and grocery store will be forced into the market to buy one.

What's worse for Mr. Karns than having to send his customers to a local distributor to buy beer? It might be to send his customers to a local Sheetz, Wegmans or Wal-Mart to buy beer when he doesn't have it, or to meet the competition for beer by losing money selling it.

Redner's Warehouse Markets took the time to come and testify before the Senate. They explained that if beer sales were made necessary to compete, and if they had to buy an "R" license, they would have to either lower benefits or raise prices on other goods. Scott Karns should have been taking notes.

» Food fight! "Privatization" is really about competition between grocery and convenience stores! Read why

This food fight is merchants promoting "privatization" while actually seeking a competitive advantage over their competitors.

In testimony before the Senate Law and Justice committee, one food merchant has come forward to talk about the impact of alcohol sales upon the competitive market place now fought over by grocery and convenience stores. Redner’s Warehouse pointed out that the current model – allowing a food store to become a "restaurant" and sell beer for off premises consumption – benefits certain food merchants to the detriment of others. To adopt this model, it must subsidize the restaurant and either raise grocery prices or lower employee benefits. This principle applies also among convenience stores, since some are unable to become a "restaurant".

This may have been new information to the senators, but it was not a surprise to the industry partners who are pushing "privatization" and this model.

Should the law change, grocery and convenience stores that are able to adopt this model profitably and sell beer, wine and spirits will have a strong competitive advantage over those that cannot.

Eliminating the provisions relating to the sale of alcohol and gasoline plus laws encouraging restaurant licenses to go into food stores helps Sheetz and Wegmans but works to the detriment of their smaller competitors.

Currently the beer business in Pennsylvania is 250% more in dollar volume than wine and spirits. It is private enterprise through and through with heavy health regulations.

Yet, in the name of "privatization", the administration is pushing, ignoring the objections of smaller food merchants and convenience store companies, to adopt a plan that picks winners and losers among the firms that provide these goods and services.

Why? Because it is not about principle or "privatization" or the consumer; rather it is about some people in the business community being granted a competitive advantage over others.

» The Lame Promise of Mr. Sheetz. Read More

Plans before the Senate cost 10,000 private and 5,000 public sector jobs. Now Mr. Sheetz offers a lame promise of "even more" convenience store jobs.

On June 4, Mr. Louie Sheetz, executive vice president for marketing of his family business, appeared at a hearing of the Senate with the administration. The Senate hearings have heard testimony that the so-called "privatization" plans before it will cost this Commonwealth 10,000 private and 5,000 public sector jobs, not to mention 110 manufacturing jobs in Philadelphia (paying $75,000 per year).

No proponent of these plans have offered replacement jobs. One state senator strongly criticized the concept of replacing family-supporting jobs with "minimum wage" jobs.

In a June 10 Patriot-News Op-Ed, Mr. Louie Sheetz, executive vice president for marketing for the family business, reacted by writing an opinion piece protesting this single comment and, surprisingly, it was published.

Mr. Sheetz wrote, "there is a line between healthy public debate and defamatory, unwarranted attacks, and Sir, you crossed that line."

He added, "Our employees will benefit from these policies and we will hire even more employees if given the opportunity to sell beer." [That’s it on new hires].

A recent survey of the Convenience Store News is a comprehensive report on the kinds of jobs Mr. Sheetz and the administration are referencing. First off, as was just seen in Dauphin County, beer in a grocery or convenience store does not create new jobs – any more than a new brand of cereal creates new retail work. It is one more product. Perhaps, one more job for someone to manage the department.

Second, in 2011 the Convenience Store News published its HR and Labor Study.

A quick summary from the report:

  • Sheetz CEO Stan Sheets said the employee benefit of health care coverage is among worker "goodies", and 41% of the industry changed these either by adding to the co-pay, cutting or eliminating coverage; 1.5% improved this "goodie".

  • Starting wages were $8.01 with no raise for six months.

  • Employee turnover was 45%, which was actually a recession-driven improvement.

  • Only 31% believe they pay more than competing businesses.

In essence, Mr. Sheetz and the convenience stores are applying to the Senate to replace the 15,000 people who now sell alcohol for off-premises consumption with an existing work force. Neither price nor selection will improve.

Self-published data sets forth their own ratings of the "problems with quality and integrity" of this work force:

Employee shrink/ theft 4.37 out of 10
Attitude toward customers 4.24 out of 10
Reliability 3.98 out of 10
Drug/ alcohol use on the job 2.43 out of 10

Does Pennsylvania really need these people selling alcoholic beverages?

Tomorrow: What is really going on here!

» FreeMyBeer.com says College Town Police Chief Critical of Sheetz Security! Learn More

From FreeMyBeer: A Shippensburg Sentinel story has quoted a police chief's criticism of security of Sheetz store.

The web site, FreeMyBeer.com, includes an article on the application of Sheetz to sell beer in one of it's stores located in a college town, despite the fact the Pennsylvania law prohibits selling gasoline and alcohol at the same location.

Sheetz awaits beer license ruling for Shippensburg store

By Debbie Chestnut, The Sentinel, August 19, 2012

"Store security would also be on hand if beer is sold when Shippensburg's new store opens.

"'We've had a great relationship with police, and we hope it continues,' said [Sheetz Publicist] Jones. "We hope to sell this new product safely and responsibly, and we will handle any situation that arises in our store accordingly, along with the police force there. They've been great partners with us for the past 30 years.'

"However, Shippensburg Police Chief Fred Scott said in a recent letter to the editor that he opposes the transfer of a liquor license to Sheetz.

"'I am not in support of Sheetz selling beer at the Shippensburg store because of the proximity of the university and for what I feel is their failure to provide adequate security at the store at this present time,' he stated in his editor.”

The Chief reports that he has had to ask council for extra tax money so he can park a police car next door for "Thirsty Thursdays." The chief spoke out against the Sheetz Liquor License application before Borough Council.

» Fuzzy Questions Lead to Soft PFM Poll. Anybody home? Read More

The May 8 Pennsylvania Manufacturers' Association poll asks fuzzy, misleading questions about "privatization".

Question 1: "Lawmakers in Harrisburg are discussing "privatizing" or selling the state liquor stores to private operators. [They are?] This would change the way wine, liquor and beer is sold in Pennsylvania. Do you support or oppose privatizing the state liquor stores for wine, liquor and beer sales?"

Did any of the respondents notice that the state liquor stores don’t sell beer! Truth is that 100% of the beer is sold by private industry. Wine and spirits are only 20% of the alcoholic beverages by revenue, half by volume. Over 800 people responded, did any notice the error?

Question 2: Will a more free-market system for beer, wine and liquor be more convenient for consumers and lead to better selection and choices?

Right now 100% of the beer is sold by over 12,000 private industry outlets. This represents $5.1 billion of the total alcohol sales of $7 billion, thus 80% of the market is served by the private sector. There is a beer outlet for every 1,000 people in the state.

Question 3: How should millions of new revenue from a privately-run liquor and beer system be used? Should it be used to improve roads and bridges, or should it be used to shore up funding for local schools to improve school safety and hold the line on property taxes?

Politicians have not suggested that the "millions of new revenue" be used to "improve school safety and hold the line on property taxes". They are now suggesting that the money be put into a special account to be fought over later. No one really believes there will be "millions of new revenue". They project HB 790 will provide less state revenue.

Most legislators tell us that polls don’t really help much in deciding complex issues. This poll is an exception - it won’t help legislators at all!

The Pennsylvania Food Merchants cite this poll as proof that the public wants them selling alcoholic beverages. Fact is that half the public does not buy these beverages, and most of the rest do not buy them at least once a week.

View the poll here.

» "Liquor Privatization" Tail Is Wagging the Dog – 80% of alcohol market now private. Read More

HB 790 is about helping certain grocery and convenience store owners and not "privatization"

Right now 80% of the alcohol sales in Pennsylvania are made by the private sector.
Beer for off-premises consumption $2 billion
Beer for on-premises consumption $3.1 billion
Wine $1 billion
Spirits1 $1 billion
1 About 20% of sales of wine and spirits are to independent, private enterprise retailers. Thus, about $400,000 of these sales are wholesale, with the retail component being far higher.
HB 790's Impact on Pennsylvania families:
Private family beer distributors 1,200
Their full and part time employees 10,000
Private (mostly family) retail licensees 11,000
Private employees (bartenders, waiters, cooks, dishwashers, etc.)2 25,000
State liquor store employees 5,000
2 Estimate based on 2.5 per licensee

Thus, 90% of employees are private enterprise.

Truth is, HB 790 attempts to "privatize" what is primarily a private enterprise group of businesses that are in open competition to sell alcoholic beverages. Few interest groups in the Harrisburg support HB 790 "as is" – because it is disruptive to two different groups of private business enterprises. First is the community of private businesses that are now licensed to sell beer. Second is grocery and convenience stores that do not currently sell alcohol nor operate with a business model compatible with HB 790. The unrebutted testimony is that HB 790 provides a competitive advantage to some food merchants while their smaller business competitors are disadvantaged.

Why would any business advocacy group set the precedent to support a bill that allows government to pick winners and losers among private businesses in a market that is 80% private?

HB 790 has encountered serious resistance because Senators see this is really an effort to select "winners and losers" among elements of the business community by putting alcohol products in some select "chosen" grocery and convenience stores. The Republican State Committee admitted that empowering grocery stores is a key objective of this bill. (This was noted on its web site, but they have since removed that posting. The page can still be found on web.archive.org. )

» Congressional report verifies Food Merchants minimizing retail thefts when claiming stealing beer is "not any more prevalent" that other shoplifting. Read More

At the May 14, Senate hearing, the representative of Wegmans gave the false impression that without a valid ID, their clerk has no ability to make an alcohol sale.

A thief walks out of a convenience store having shoplifted a 30-pack of beer, tobacco products and infant formula. Which is most valuable in his neighborhood?

1. Tobacco Products.
2. Beer.
3. Baby Formula.1
4. They are all the same.

Of course, it depends upon the neighborhood. But a fair analysis would indicate "2", the beer.

The rationale is simple: A recent report by the Congressional Research Service on "Organized Retail Crime" indicates that these are all products sought after by shoplifters. It defines a "booster" as the thief who goes into the store. It says, "Boosters work either alone or in groups to steal goods that they will later sell to fences for about 10% to 25% of the ticket value. They often carry 'fence sheets,' or shopping lists provided to boosters by fences."

Common sense tells us that the "market" for these three items differs. Infant formula is expensive, but the number of potential buyers is limited. The strongest market for tobacco is among those under 18 who cannot buy it on the legitimate market. The booster has to provide less of a "discount", if any, to this potential buyer. The pool of "black market" buyers, however, is even larger for alcohol, since the age of purchase is 21. The booster may even be able to demand a premium over list.

The concept of young people paying extra to an adult to buy alcohol products is almost a cliché , and shows that the "market value" of these products to certain people under 21 is high - potentially higher than the retail sticker price.

Thus, depending upon the neighborhood setting, a 30-pack of beer could have an even higher market value "on the street" ready for immediate consumption than the same product in the store.

The Congressional Research Service defines beer as a "hot" product. One would believe that it is this reason that has caused the problem known as the "beer run", a problem that does not exist in Pennsylvania because it is sold by specialty retailers from adult oriented outlets - places that today are legally constrained in their dealing with unaccompanied minors. There are not high traffic locations, nor are they destinations for anyone other than those who want to purchase alcoholic beverages.

Remember, under HB 790, convenience stores would not be carrying wine but would be selling the "hard stuff" along with beer, the caveat being that before the retail customer can leave the store they must open the bottle and take a sip. Shoplifters would not likely be following this portion of the law.

On these issues, the Pennsylvania Food Merchants and Convenience Store Council is in denial, saying:

"These stores are excelling in compliance with the Pennsylvania liquor control laws. Ninety-nine percent have zero infractions for alcohol sales. Theft is a non-issue at these stores."

"Theft for these products is not any more prevalent than any other product in the stores," McCorkle said. "Supermarket and convenience stores are very familiar with selling age-restricted products. They regularly sell them in other states where they comply with the law and shoppers enjoy the convenience of purchasing adult beverages along with their groceries."

Thus, the Food Merchants say, "look at our record in other states." Pabeerrun.org gives a fairer, more balanced look at other states than the PFMA.

1Yes, infant formula is often the subject of shoplifting and is sometimes kept locked.

» H.B. 790 makes it 100% certain that there will be convenience and grocery store clerks selling alcoholic beverages with 100% discretion. Read More

At the May 14, Senate hearing, the representative of Wegmans gave the false impression that without a valid ID, their clerk has no ability to make an alcohol sale.

Senator Fontana: Okay, so they have to ask for it?

Mr. Hoffman: Every cashier with every purchase 100% of the time.

Senator Fontana: What if your employee doesn't ask for the ID?

Mr. Hoffman: The register will not unlock. It will not unlock sir. That's correct.

View the scan from a recent purchase showing it was 'keyed'.

Our field tests show this is wrong, the clerk merely has to key in a number and the register will open. A one minute search of the internet demonstrates the problem, namely that technology alone does not solve the problem:

Lawrence (Kansas) Journal World:

Undercover task force cites 17 businesses for selling alcohol to minors

April 5, 2013

Undercover - and underage - agents working for state regulators cited 17 Lawrence businesses for selling alcohol to minors Wednesday night.

Among those businesses were grocery stores, gasoline stations and restaurants holding licenses to sell only 3.2 beer. Those are regulated by the city and less often investigated, said Jen Jordan, director of prevention for DCCCA and a member of Draw the Line Lawrence, a community group working against underage drinking.

Underage informants working for the state Alcoholic Beverage Control agency attempted to buy alcohol from 70 businesses as part of a grant-funded effort led by Draw the Line Lawrence. The rules required them to use their own ID cards and to refrain from any deception. They succeeded 17 times, which Jordan said was vexing because there are so many mechanisms in place to prevent mistakes.

In this particular sting, the merchants failed 25% of the time to check for ID and made a sale to someone who was not legally allowed to buy "adult beverages".

Manteca (CA) Bulletin:

Six clerks cited for selling alcohol to Manteca minors

May 28, 2013

Agents of the California Alcoholic Beverage Control (ABC) along with Manteca Police Department officers cited six clerks for selling alcohol to minors on Friday. 

The actions were the result of a minor decoy operation in which minors under the direct supervision of department agents, attempted to purchase alcohol from 39 retail licensees in the City of Manteca. 

Those who sold to the minor face a minimum fine of $250, and/or 24 to 32 hours of community service for a first violation. In addition, ABC will take administrative action against the alcoholic beverage license of the business where alcohol was sold to a minor. That may include a fine, a suspension of the license, or the permanent revocation of the license. 

ABC is conducting the compliance checks statewide to reduce the availability of alcohol to minors. Statistics have shown that young people under the age of 21 have a higher rate of drunken driving fatalities than the general adult population. 

Minor Decoy operations have been conducted by local law enforcement throughout the state since the 1980s. When the program first began, the violation rate of retail establishments selling to minors was as high as 40 to 50 percent. When conducted on a routine basis, the rate has dropped in some cities as low as 10 percent or even below.

Journal of Studies on Alcohol and Drugs
Volume 73, 2012
  Issue 5: September 2012

Evaluating Self-Checkout Lanes as a Potential Source of Alcoholic Beverages for Minors, Journal of Studies on Alcohol and Drugs, September 2012

John D. Clapp, Brandi Martell, Susan Woodruff, Mark B. Reed Objective: This exploratory study examined the ability of young adults to purchase alcoholic beverages through self-checkout lanes without being asked for age verification. Although the minimum drinking age in all 50 U. S. states is 21 years of age, drinking among underage persons (ages 12-20) remains a serious public health concern. Self-checkout options in off-sale alcoholic beverage outlets (e.g., grocery store chains, liquor stores) may represent a potential source of illicit access to alcohol compared with traditional checkout purchases. Method: A total of 216 stores with self-checkout lanes were randomly selected in five Southern California counties. Pseudo-patrons independently judged to be 23 years of age or younger purchased alcohol in each store. Results: Overall, 8.8% of all purchase observations resulted in a failure to ask for identification to purchase alcohol.  Conclusions: The growing number of self-checkout options at supermarkets can be a potential source of alcohol for minors; however, the risk they pose is similar to that of traditional checkout purchases. Policies relating to the purchase of alcohol at any store, regardless of checkout type, should be modified so that every purchase of alcohol requires an identification card to be swiped regardless of age. (J. Stud. Alcohol Drugs, 73, 713-717, 2012)

Pennsylvania already has the best system for controlling sales to minors. Specialty Retailers know that with each sale their livelihood is at stake - unlike a convenience or grocery store, a suspension is not just a minor inconvenience, it is a loss of substantial income and an embarrassment in the community. The clerk in the state liquor store has a good job with a "sudden death" policy, meaning that one sale to a minor and they are out. For the private sector selling beer, our investment depends upon our liquor license - thus we work side by side with our people to achieve compliance.

» Wegmans presented false testimony at Senate Hearing Read More
View the scan from a recent purchase showing it was 'keyed'.

The testimony given by the representative of Wegmans at the May 14 hearing before the Law and Justice committee impressed at least some in the audience, and perhaps some Senators on the panel.

In essence, they said that with every purchase of beer, the buyer must present ID and, unless that card is fed into a machine and registers an age of at least 21, the register will not permit the sale of beer. Thus, without a legally valid ID, the clerk cannot make the transaction. Human error is, of course, possible since the clerk must still decide if the card is identification of the person standing there ready to make a purchase.

View the scan from a recent purchase showing it was "keyed".

Our secret shoppers tested this "card reader" approach at Wegmans. So far,card readers are seldom used, and can be overridden easily and quickly by the clerk, or ignored.

Wegmans attempted to give the impression on behalf of the Food Merchants that technology has arrived at the point that alcohol sales to minors can be "100%" controlled through technology which will prevent illegal sales. Sadly, this is a false impression. Alcohol sales are still 100% in the hands of the clerk at the register, who in the case of convenience stores -- according to their own published data -- is often an $8.01 per hour employee with 45% turnover, with whom the employer often has problems of theft and alcohol use on the job.

This is important because we believe that the most impactful way to minimize underage sales is to have specialty retailers who will - should they lose their liquor license - lose their livelihood. Beer Distributors work side by side with their employees. If we lose our license, the penalty of being closed is far harsher (appropriately so) than the fine. A convenience store clerk during their first six months loses a job that pays $8.01 per hour.

The Pennsylvania Food Merchants and Consumer Store Council have made Wegmans the "poster boy" for their industry. Turns out the poster boy was dishonest.

Relevant testimony found at 49:20 through 50:35 below:

Senator Fontana:  About the checkout policy procedure, just to be clear for this gentleman.  You said that they have to show ID 100% and what happens when they show the ID? 

Mr. Hoffman:  The ... what happens Senator first of all ...it ... the beer currently is purchased only in the restaurants as stated by the Pennsylvania state law.  When a customer brings up a purchase of beer the first thing that the cashier does is ask for proper identification, the cashier then will review the identification, look at the individual to make sure that it matches the identification, and then they have a card reader where they will actually dip the identification into, to track that, and then it will unlock the register as long as the date of birth matches the age requirement. (Emphasis in original)

Senator Fontana:  Okay, so they have to ask for it?

Mr. Hoffman:  Every cashier with every purchase 100% of the time. 

Senator Fontana:  And if they don't then what happens if they don't?

Mr. Hoffman: If they don't they get turned away and they are not allowed to purchase the beer. 

Senator Fontana: What if your employee doesn't ask for the ID?

Mr. Hoffman: The register will not unlock.  It will not unlock sir. That's correct. 

» Liquor Thefts "Skyrocket" after Washington State "privatization" Read More

Federal Way, Washington, a city of 90,000 people which borders the Puget Sound, has seen a 340 Percent increase in liquor theft since "privatization" of its liquor stores.

In reporting this increase in crime to the City Council, the police chief said the number of thefts may actually be underreported. Meanwhile, because of state-wide theft problems, authorities are considering legislation that would require retailers to report liquor thefts.

The State of Washington privatized liquor stores through the process of public referendum, a process in which the voters rejected alcohol sales in convenience stores.

Retailers in Washington say they are learning some "hard lessons" in selling alcoholic beverages.

Meanwhile, this is having an impact on neighboring states, as was reported in The Oregonian, "The multi-agency inquiry targeted what retail authorities say is a growing problem: the brazen looting of alcohol from Washington grocery stores since June 1, when the state began letting large retailers sell bottled liquor."

The Olympian reported, "After passage of Initiative 1183 - which eliminated state-run liquor stores and allowed private liquor sales across Washington - local chains and big-box retailers have made liquor too accessible to would-be juvenile shoplifters, Graham said. 'Alcohol use by students on school property has gone up, and it's not beer,' the prosecutor said."

» Most Convenience store thieves get away scot-free! Read More

Posted on Facebook is “Circle K Crime Busters of AZ & NV” a page that purports to show security pictures of people entering convenience stores who are alleged to have committed a crime inside.

It is posted as a “cause”, which is to "Help us make Arizona and Nevada a safer place. We need your help to identify people suspected of crimes at Arizona retailers!

Listed on the Facebook page are pictures of people with specifics relating to their description, the store, and details of the incident.

Apparently, no one has commented upon the fact that an innocent person could have his or her picture on this web site with the allegation that they have committed a crime, even if not true. Aren’t we supposed to be innocent until proven guilty?

The most recent “beer run” was on May 22, 2013. See www.pabeerrun.org. One person was alleged to have made 18 beer runs.

Since the New Year holidays, Circle K has posted more than 100 pictures of potential offenders. Less than 10 are marked “apprehended”. Circle K is proud of their effort, telling news reporters more than a year ago, "’We post signs on our stores that let them know that if they obviously do something that isn't right, they might be on Facebook,’ said Circle K Loss Prevention Manager Carlos Estrada”. Based on their postings, this convenience store chain has an “apprehension” success rate of less than 10%, which would be considered a failure in most of life’s other efforts.

The Pennsylvania Food Merchants and Convenience Store Council try to minimize the problem of theft in convenience stores, and how it is aggravated by presence of beer, particularly at night when other outlets are closed.

In Pennsylvania, all beer retailers are specialty retailers who are required to be closed at night except grocery stores that have a restaurant license.

The wise man does not expose himself needlessly to danger.
Aristotle

» Fort Lauderdale targets convenience stores – "breeding ground for crime". Read More

Fort Lauderdale targets liquor, convenience stores
By Larry Barszewski, Sun Sentinel
May 24, 2013

From the Sun Sentinal

Fearing that liquor and convenience stores are a breeding ground for crime in the heart of the city's northwest community, officials may permanently ban new ones from opening in the area.

The city and local businesses are concerned the stores could also inhibit redevelopment efforts along the Sistrunk Boulevard corridor, which recently underwent $15 million in improvements to lure more businesses and activities.

"It took 20 years to get that roadway built in the manner that it's suited for redevelopment opportunities," said businesswoman Pamela Adams, who supports the ban. "Now you have all these nuisances in the roadway's corridor."
Commissioners this week extended a nearly two-year-old moratorium on new liquor and convenience stores in the general area west of Federal Highway – between Sunrise and Broward boulevards – while permanent restrictions are considered.

The Planning & Zoning Board this month unanimously recommended a ban on new convenience and liquor stores, but limited the ban to the redevelopment area west of the Florida East Coast railroad tracks, where officials said the negative impact is most pronounced.

"How many other communities have more than 20 convenience stores?" asked Sonya Burrows, whose family-run electric store has been on Sistrunk for more than 60 years. "Historically, we weren't given the attention that other areas were given. They let anything happen here."

The planning board backed off proposals that would gradually phase out the existing stores. City officials are still interested in addressing existing businesses, but said more research is needed.

Officials contend the liquor and convenience stores scare off potential development, with a staff report characterizing the situation as "alcohol blight" and "fostering a perception that an area is beyond salvaging."

"Research suggests that an overabundance of liquor/convenience stores inhibits economic development," city spokesman Chaz Adams said. "Zoning changes like the ones being proposed will facilitate and encourage development in the defined area."

The police department produced reports showing a significant amount of crime occurring within a quarter-mile of the existing stores. A 2011 University of California at Riverside study1 found a correlation between a concentration of alcohol establishments in a given area and violent crimes among teens and young adults.

Residents complain the liquor and convenience stores become late-night gathering spots and are magnets for illegal activity. They say there's no need in the community for the late-night operations.

Because it covers a larger area, the ban would prevent such establishments in the redevelopment area on the north side of Broward Boulevard and the south side of Sunrise Boulevard.

1Discussion and Conclusions.These findings suggest that if the city were to make the voluntary ban on single serve container sales mandatory, violence in the surrounding areas would decline, all other things being equal. This study provides a much more grounded and specific justification for enacting such policy changes and once again shows the utility of alcohol policy for the reduction of crime and violence.

» MainStreetDoesItBetter.com willfully publishes false information about HB 790 Liquor Bill. Read More

MainStreetDoesItBetter.com publishes misinformation that is just plain wrong! Why do they say beer distributors have legal rights that have never existed? Is it to mislead them?

MainStreetDoesItBetter.com says, "But, understand that the Commonwealth cannot sell the beer business (which they currently don't own) without adequate consideration for the private business owners that are already selling beer."

"The best example of this that I can use is that in real estate there is a thing called eminent domain. It means that if, for the greater good, your house would be better served as a road, the municipality can take your house. They have to pay you fair market value, which is determined by an appraisal, and you have no choice about that, but they have to PAY you."

This is a false statement of the law. Attorneys will advise that the concept of Eminent Domain has no relevance in liquor licensing. Section 468(d) says, “The license shall constitute a privilege between the board and the licensee.”

HB 790 supporters admit they want grocery and convenience stores to sell alcoholic beverages. This devalues all distributor liquor licenses. This law makes no provision to compensate existing distributors for either good will or the real estate. The big box store that wants to buy one of these licenses will go to the distributor in a county with the lowest sales price. The remaining distributors will be strangled out of business without any other fair compensation.

Why would MainStreetDoesItBetter.com publish information that is not only wrong but actually misleading to distributors if relied upon? Either they don’t care or they don’t know.

» "I don't want alcohol beverage promotions forced on my newly licensed teenage driver when I send him for gas or groceries!" Read More

"When I send my teenage kids for gas or groceries, I really don't want them confronted in the aisles with promotions for wine, beer or liquor! Today, after the game, young people drive to the mini-mart. Sales of alcoholic beverages will change the character of these places!"

"About 80% of us do not regularly buy alcoholic beverages. People who do are able to buy these products at adult-oriented outlets. I like that. I don't like having these products forced on me where I take my kids shopping."

"It is time for people who share my values to get involved!"

Today the Pennsylvania beer market consists of 12,000 private enterprise outlets who compete with other local independent business people. This market has been private for 80 years. The outlets for beer are adult-oriented establishments legally obligated to discourage unaccompanied minors.

Today, grocery, convenience, big box and even the dollar stores want to sell alcohol. They are looking for profit. They have no concern for the social consequences of making these products available everywhere, nor do they care about the majority of their customers who do not want an alcoholic beverage available everywhere they shop. They call it "consumer convenience" when, really, with 12,000 outlets for beer, there is already convenience in an appropriate business setting. They want the vast majority of the public while family shopping being forced to confront unwanted alcohol promotions.

Pennsylvania needs jobs, good schools and healthcare, not a plan that enables convenience, grocery, big box and dollar stores to force alcoholic beverages onto those who do not care to purchase them. Keep our family stores.

» Food Merchant Swears Liquor Bill Puts It at Risk -- Economics 101: "The Best social program is a job!" Read More

As President Ronald Reagan used to say, "The best social program is a job."
David Taylor, President of Pennsylvania Manufacturers Association, "privatization" advocate.

"This debate is about private sector jobs selling beer and H.B. 790 will have a dramatic, negative impact. It will be a disaster for our 10,000 workers."
Mark Tanczos, President, Malt Beverage Distributors Association.

"More money spent to build a restaurant area … is more money taken away from each employee's retirement … and the low prices we offer to our customers."
Redner's Warehouse Markets before Senate Law and Justice Committee
(read summary)

Testimony at the May 14th Law and Justice Committee hearing had everybody talking about jobs except those entities who are in line, if nothing happens or under the House Approved Plan, to become the lead sellers of alcoholic beverages in Pennsylvania. The Republican State Committee makes it clear that the goal is to have some grocery stores sell alcoholic beverages.

The Winner

Wegmans is a private grocery store chain based in New York. Of its 81 stores with 43,000 employees, 15 are located in Pennsylvania with 8,000 employees. Thanks to the Pennsylvania Supreme Court, they are now in the beer business, having successfully transformed licenses intended for on-premises consumption - originally coupled with a convenience take-out feature to eliminate "one for the road" - to a new off-premises niche market. In its opinion, the Court recognized that distributors have a delicate "market niche" and that it's Opinion and market transformation would "open the door for large retailers" and could change the economic lives of thousands of Commonwealth workers.

It said, "if the General Assembly views our interpretation as a 'momentous transformation,' it has the prerogative to enact responsive legislation."

Wegmans, in their carefully-crafted testimony, never said they have added even one job, nor that they would add any jobs, if they were allowed to get a "G" license for wine or continue to buy "R" licenses to create more off-premises beer sales. This is because their national business model already includes Market Café Restaurants and the employees necessary to run them, even when they do not sell beer, as is the case in Maryland.

The Losers

In terms of quality of employment, the 110 souls who earn their living working for a manufacturer in Philadelphia with an average salary of $75,000 per year have to lead the list. Jacquin's president offered 60 pages of testimony to substantiate his position that under these plans "we will close". Wegmans testified that their average wage was less than half the amount paid to a Jacquin's employee.

Other losers are, of course, the 10,000 people who work for a beer distributor, not to mention the 1,200 families who operate these businesses.

Redner's Warehouse Markets, a Pennsylvania-based company with most of its 4,000 jobs here, testified with one stated purpose, "to bring to light one of those unintended consequences" of the House plan .

Beer sales at the "high end" grocery stores directly and negatively impacts on the jobs and success of other grocers, including those who adopt a model that focuses on "low prices" since it creates a playing field that is no longer level. Common sense tells us that customers who buy alcoholic beverages could well buy at the more expensive store which has beer to sell if it is not available through the "value" competitor.

Redner's representative said "in contrast to my fellow grocers on this panel [Wegmans]", his store meets "the needs of the most cost conscious customer." It's main competitor is big box stores who also cater to the same customers, and, since the Pennsylvania grocer does not believe it is in it's economic interest to adopt the restaurant model in order to sell beer, any change in law that puts beer in the big box stores "will be detrimental to small to medium size Pennsylvania based grocery stores like Redner's".

Market expansion, as with large grocery stores selling beer, may not create new jobs, but contraction in a store's customer base because of unfair, government-created competition, certainly causes jobs to be eliminated. "Redner's will not be able to keep up," he testified. He summarized their position this way,

"more money spent to build a restaurant area … is more money taken away from each employee's retirement … and the low prices we offer to our customers."

 

Redner's business logic teaches:
  • Competition for customers between big box stores and Pennsylvania grocers who provide low prices in the same market is substantial;
  • An insertion of beer into big box stores creates demand for a "R" license among in-state grocers and it's acquisition must be subsidized in the sale of other products or lower employee benefits, or both.
  • Therefore, beer in big box stores will either increase grocery prices and lower sales, or diminish margins and thus allow for less investment and growth.

Any veteran legislator will tell you, "The bane of the good idea is the unintended consequence."

Thus, the Supreme Court, in making its decision, accepted that the competition between grocers with restaurants selling beer to go and Beer Distributors would have a transformative effect, but admonished the General Assembly that if it became a "momentous transformation" then action might be needed. They missed the impact of their decision on the competitive market among grocery stores themselves, as between those who would have beer and those who could not.

The "niche market" referenced by the Court was that of the beer distributors, who were established to be the main outlet of beer sales for home (or off-premises) consumption. About 1,200 family-owned distributors and their 10,000 direct full and part-time employees sell a majority of the beer for about 30% of that which is paid. Businesses dedicated to on-premises consumption sell about 40% of the beer for roughly 70% of the price.

The MBDA has said, "plans that deliver the off-premises beer market to grocery and convenience stores will devastate our industry." Rep. John Taylor, chair of the House Liquor Committee, has said that beer distributors cannot compete in such a market. Unlike in Ohio, where beer prices are regulated at 25% over wholesale cost, Pennsylvania enjoys a truly competitive private market among sellers for off-premises consumption of beer. A potential buyer has about 12,000 retail choices.

At the Governor's request The PFM Group issued a report on the status of the Pennsylvania system for selling wine and spirits, but not beer. Nevertheless, PFM only recommended 1,500 outlets as being necessary for providing "consumer convenience" for wine and spirits.

In Pennsylvania today, there are 1,200 private outlets for beer in larger quantities (cases and up) and about 11,000 for beer to go in six and 12 packs. Clearly, this is well above the test established for "consumer convenience" by PFM.

It is clear, Pennsylvania does not need more outlets for beer and Redner's doesn't need a law that tilts their economic playing field to the benefit of Wegmans and Wal-Mart. And Pennsylvania needs the best social program - jobs!

» Washington State Voters rejected alcohol sales from convenience stores. Taxpayers statewide said "no" to proposals that include these stores. Read More

In the State of Washington, a multi-year referendum funded by over $22 million from big-box retailers ended with a clear message - voters do not want convenience stores selling alcoholic beverages.

According to the Shanken News Daily, a daily email news service covering the global spirits, wine and beer business, after two well-financed privatization initiatives failed with voters, "supporters reworked their plan" to "address public concerns that gas stations and mini-marts would be allowed to sell liquor". This allowed the referendum to pass.

In Pennsylvania, the separation of fuel and alcohol marketing has been a long standing policy that has been reviewed and readopted by the General Assembly under Republican and Democratic leaderships. Section 404 of the Liquor Code has a provision that says,

"The board shall refuse any application for a new license, the transfer of any license to a new location or the extension of any license to cover an additional area where the sale of liquid fuels or oil is conducted."

A goal of HB 790 is to eliminate this provision, which would open up the application process for every convenience store and service station, estimated to be about 3,000 across the state.

The economic fact is that once a class of sellers has the right to sell alcoholic beverages, every member of that class will be under pressure to "meet the competition." This even applies between grocery and convenience stores for, as one convenience store lobbyist told a senator, "if grocery stores get beer and we do not, we are no longer a convenience store."

Only one Pennsylvania-based food merchant testified. It was Jason Hopp of Redner's Warehouse Markets, a company that is half-owned by its employees.  He testified "we feel that stores the size and composition of Redner's have not been taken into consideration." "If a regular Redner's customer is able to purchase their beer, wine, and spirits with their groceries at a different store that also offers low prices, we will lose a significant customer base," he told the Senate Committee.

Mr. Hopp's testimony makes clear that the Supreme Court's intervention into policy making by allowing grocery stores to own an R license and sell beer to go, and all alcohol for on-premises consumption, dealt smaller stores like Redner's a heavy blow.

  • His testimony makes it clear that once one grocer gets an alcoholic beverage, all will need to compete (note: four grocery chains in the United Kingdom now sell 75% of beer);
  • His testimony makes it clear that a store like Redner's may not really have a choice if the current system continues;
  • "For Redner's the more money spent to build a restaurant area, cash register etc. is more money taken away from each employee's retirement, the communities we give back to, and the low prices we offer to our customers."

Mr. Hopp's job is not to focus on the impact to the community, but that is the duty of the General Assembly. Thus, even a continuation of the current system, as created by fiat of the Pennsylvania Supreme Court, will have a negative impact on companies like Mr. Hopp's plus on 1,200 families who have purchased, invested and worked to have a distributor liquor license provide beer in a private, competitive, cost effective environment.

Passage of HB 790 is a lose-lose circumstance, particularly when considering that only about 20% of the general population buys alcohol products on a regular basis
  • Grocery and convenience stores who do not want to be in the alcohol business will be forced into it.
  • Beer Distributors who have saved, borrowed, invested and worked to be in the beer business will be forced out.
  • Neither the public nor any of their thousands of employees will be benefitted.

Washington State privatization is killing small businesses. View this special report on what privatization is doing to small business in Washington, the latest state to undertake privatization.

After Landslide Vote, Washington State's Liquor Privatization Will Begin To Take Shape

» Convenience Stores selling beer and minors do not mix... Our law discourages unaccompanied minors. Read More

The policy against unaccompanied minors in taverns is long standing in Pennsylvania. The "Pizza Hut" rule was added because the General Assembly is aware that young people and adult beverages do not mix. That rule is part of a larger prohibition set forth in the Liquor Code. The fair point is this, once a convenience or grocery store becomes, all or in part, a business licensed for on-premises sales, it should be subject to the same restrictions as the neighborhood tavern - unaccompanied minors should be prohibited except as provided by law! It is a bad idea for the General Assembly to allow thousands of convenience stores to become a legal tavern, to sell wine, spirits and beer for consumption on the premises, while they are actively catering to unaccompanied minors.

Here is the problem:

The Shippensburg Police Department has 9 full time and 5 part time officers. The University is 4 blocks away from a convenience store that does not now sell beer and the facility is located in an area of private student housing. Police have stood in opposition to this store selling alcohol.

According to the police, the convenience store as currently operated (without beer) is a student hangout starting at about 10 p.m. After 11 p.m. people from town avoid the place because, they say, of the students and their behavior. On Thursdays (thirsty Thursdays) Fridays and Saturdays when students are in town it is packed. The chief has had council use extra tax dollars to arrange for a patrol car to park next door. The store has consistently declined to provide additional security.

Police say 90% of the following classes of arrests now - before they can sell alcohol - come out of this location: public drunkenness, DUI, disorderly conduct, retail theft and underage drinking. According to police, this store is responsible for more calls than the remaining bars and social clubs. Click here to read the Chief’s testimony.

Here is the law:

[1]Minors may only frequent licensed premises if: (a) they are accompanied by a parent; (b) they are accompanied by a legal guardian; (c) they are under proper supervision[adult aged 25]; (d) they are attending a social gathering [registered with police]; or (e) the hotel, restaurant or retail dispenser licensee has gross sales of food and nonalcoholic beverages equal to fifty per centum or more of its combined gross sale of both food and alcoholic beverages. If a minor is frequenting a hotel, restaurant or retail dispenser licensee under subsection (e), then the minor may not sit at the bar section of the premises, nor may any alcoholic beverages be served at the table or booth at which the said minor is seated unless said minor is with a parent, legal guardian or under proper supervision.

The General Assembly and the LCB strongly discourage minors from being present in premises that are licensed to serve alcoholic beverages to adults. Unless a convenience store sells enough food for on-premises consumption to qualify it under the "Pizza Hut" rule, it should not allow unaccompanied minor under any circumstances. This has been made even clearer by the LCB:

§ 5.321. Service in establishments primarily serving food.

(a)  Section 493(14) of the Liquor Code (47 P. S. §  4-493(14)) creates several exceptions to the general prohibition of minors being present in licensed premises. One of these exceptions, known as the ‘‘Pizza Hut’’ exception, permits a minor to be present in a restaurant, hotel or retail dispenser (but not a club) licensed premises that has gross sales of food and nonalcoholic beverages equal to at least 50% of its combined gross sales of both food and alcoholic beverages.

(b)  Licensees qualifying for this exception will not be cited for unlawfully allowing minors to frequent the licensed premises.

(c)  To qualify for this exception, a licensee will assure that:

(1)  Minors are not permitted to sit at the bar counter of the premises.
(2)  Alcoholic beverages are not served to any adult at the table or booth where the minor is seated, unless the minor is also there with a parent, legal guardian or proper supervisor.
(3)  Sales of food and nonalcoholic beverages at the licensed premises during the preceding 12-month licensing year are at least 50% of the combined gross sales of both food and alcoholic beverages.

» In United Kingdom, control of 75% of alcohol market by 4 grocery chains fuels health crises. Read More

In the UK, four large grocery chains control 75% of the market for the sale of alcohol.

A medical services alliance recently called for a minimum price on alcohol. UK Prime Minister David Cameron is supporting such a policy.

Why?

On March 22, 2012, the Prime Minister said,

“We can’t go on like this! We have to tackle the scourge of violence caused by binge drinking.” He added, “The crime and violence it causes drains resources in our hospitals, generates mayhem on our streets, and spreads fear in our communities.”

By 2009, the United Kingdom’s five-decade process of alcohol deregulation had caused alcohol consumption to double. As social problems became acute, efforts to revitalize downtown centers with entertainment led to the introduction of mega bars - creating an atmosphere which encouraged extreme intoxication.

The British, who used to primarily drink beer at the pub, began “Pre-drinking” on cheap store-bought alcohol before going out. This kind of behavior has led to a doubling of hospital admissions for alcoholic liver disease in just 10 years. Underage drinking increased. Pubs began to close.

The government rejected multiple comprehensive measures recommended by the World Health Organization and instead enacted a large tax increase, anticipating that it would be passed along as increased prices to alter the demand curve “particularly among price-sensitive youth”. Instead, with 75% of the market in the control of four grocery store chains, they either required suppliers to absorb the tax or absorbed it themselves using the economic power that comes with selling thousands of products at a variety of markups.1

Here in Pennsylvania there is a balanced private beer market, dominated by no single group among the independent specialty retailers. Unlike in Ohio, a model endorsed by the Pennsylvania Food Merchants and onvenience Store Council, there is no law that sets a minimum markup at 25%. There is competition for the off-premises beer consumer between 1,200 beer distributors and 11,000 other retail licensees.

If “consumer convenience” puts alcoholic beverages in grocery and convenience stores, we clearly risk the same unhealthy outcomes as have been seen in the United Kingdom. That is in addition to, as was noted this week, Pennsylvania’s loss of 12,000 jobs with its family owned and operated beer distributors.

See: Alcohol abuse costing Britain 6 billion pounds per year. 5/15/2013

1Erickson, The Dangers of alcohol Deregulation: The United Kingdom Experience, 2012 Update.

» H.B. 790 Will Close Philadelphia Manufacturer – 110 workers earning $75,000 will be on the street. Read More

Among those who testified at Tuesday’s Senate hearing on alcohol "privatization" and H.B. 790 was Mr. N. J. "Sky" Cooper, owner of Charles Jacquin et Cie., Inc., a Philadelphia distiller.  He displayed great charm, wit, humor and expertise, offering his 58 years of experience as an entrepreneur and manufacturer.

Mr. Cooper presented 60 pages of testimony, available here.

Here are some of his conclusions regarding H.B. 790, the plan passed by the House of Representatives to "reform" the liquor distribution system:

  • Jacquins, which employs 110 people with an average manufacturing salary of $75,000 per year, would close.  "We will be gone", he said.

  • Merchants serving this Pennsylvania facility would lose a customer who makes annual purchases of about $10 million per year, which includes about $1 million annually from farmers selling eggs and cream.

  • This would devastate the Kensington area of Philadelphia, creating "yet another boarded up factory in their area bringing down home values."

  • The high fees in H.B. 790 would cause sellers to "raise their prices on wine and spirits" which would, in turn, "force Pennsylvania consumers to cross nearby boarders" – thus he said H.B. 790 would actually increase "boarder bleed".

  • "Distributors will be ruined" – they will be "knocked out of the box by deep pocket competitors."

  • "Youngsters, not of drinking age, would have access to hard spirits and wines and the problem with too much alcohol use would become significantly stronger."

Small versus large business – it is noteworthy that among the businesses that testified, Jacquins, much like the beer distributors, was a "small business" with 110 employees. The Food Merchants who were present (Wegmans and Redners), were two large multi-state companies with 12,000 employees. An actual pay rate cited for an employee in the oral testimony was 10 cents over minimum wage. Right now 1,200 beer distributors employ about 10,000 people here in the Commonwealth and work side-by-side to provide service and convenience in a private, competitive beer market.

In their testimony, the Food Merchants Association made no effort to dispute any loss of jobs.  They made no claim that they would, under H.B. 790, employ more people.  In the past, the Food Merchants have referenced Ohio as a model state for alcohol distribution.  It has a high density of sellers and legal minimum prices, making alcohol products an ideal addition to their product line. 

Read MBDA's Testimony

» Senate Hearings: Food merchants ignore loss of jobs! Testimony makes no mention of replacement jobs. Read More

In testimony presented at Tuesday's hearing before the Senate Law and Justice Committee, Pennsylvania's beer distributors noted that H.B. 790 will jeopardize 1,200 family businesses and about 12,000 jobs. This was not disputed by the Food Merchants Association.

Mark Tanczos, president of the Malt Beverage Distributors Association testified, "In essence, the proposed HB 790 will steal our livelihoods and cause the closure of hundreds of small businesses and the layoff of thousands of our employees."

The Pennsylvania Independent reported on March 19, 2013,
"Liquor Control Committee Chairman John Taylor, R-Philadelphia, said these changes were made because beer distributors were made vulnerable, potentially losing their business to competition from other stores. 'What really kills beer distributors is the real proliferation of beer in grocery stores,' Taylor said."

No responsible authority disputes this - beer in grocery stores will cost Pennsylvania thousands of good jobs. It will severely limit the selection that consumers currently enjoy while also likely increasing prices.

At yesterday's hearing, the PA Food Merchants Association submitted written testimony which asked the Senate to put beer sales in 4,000 grocery stores.1

Here is summary of the Food Merchants' testimony:

  • Did not dispute the MBDA position that H.B. 790 would close family businesses and cause thousands of employees to lose jobs;

  • Did not suggest that beer sales in grocery and convenience stores would create even one new job, let alone enough to replace the 12,000 that are placed in jeopardy by H.B. 790;

  • Asked for a "Tier 1" beer license that would become available to 2,000 grocery stores;

  • Ask for a far less expensive "Tier 2" beer license that would become available to any store with only 1,500 square feet, which is about 3,000 grocery and convenience stores.

  • Ignored as a "best practice" the top security feature against selling alcohol to minors currently available, namely that a license suspension must be served by closing the entire store, which is the real world impact of a suspension by any current licensee.

Truth is the Pennsylvania Food Merchants do not dispute the job loss, do not contend they will replace the jobs, and are asking for provisions that Chairman John Taylor said would make beer distributors, their families, suppliers and employees, even more vulnerable.

1Before this, the Food Merchants have always written that they have 5,000 stores. A similar plan published in their 011 Annual Report (page 12) claims 5,000 members. Now it is convenient for them to claim 4,000.

» Food and convenience stores seek anti-competitive "Ohio Plan" for beer sales with 25% minimum markup. Read More

On March 22, 2013, David McCorkle, president and CEO of the Pennsylvania Food Merchants Association and Convenience Store Council, told the Patriot News that,

“the concern for retailers is that they adequately serve consumers, who say they want the convenience of buying alcohol in supermarkets, convenience stores, pharmacies and big-box stores.”

“In Ohio, there is one retailer selling alcohol for every 900 adults versus one outlet for every 13,000 people in Pennsylvania”, he said.

“‘When we talk about convenience, I think that statistically really sort of hits it on the head,” McCorkle said.’”

The State of Ohio has a 25% minimum markup on the retail price of beer. In Ohio, because of the high density of alcohol sellers, which is not considered a positive for control, the legislature passed a law dealing with minimum markups.

4301:1-1-72 Minimum markup on beer.
This rule reflects the policy and intent of the commission to maintain effective control over the sale and distribution of beer, an alcoholic beverage, and to prevent abuses caused by the disorderly and unregulated sale of beer. Mandatory price markups: prevent aggressive sales practices that improperly stimulate purchase and consumption, thereby endangering the state's efforts to promote responsible, and discourage intemperate, consumption of alcoholic beverages; eliminate discriminatory sales practices that threaten the survival of wholesale distributors and retail permit holders; preserve orderly competition; ensure fair prices over the long term; assure adequate consumer choice; and promote compliance with Ohio law and rule.

(A) This rule shall apply to all retail sales of beer, not for consumption on the premises where sold and in sealed containers, by A-1, A-1A, B-1, C-1, C-2X, D-1, D-2X or D-5 permit holders.

(B) The minimum retail selling price of beer, whether by the bottle, can, case, or keg, shall be determined in the following manner:

(1) The minimum retail selling price for retail sales made by a manufacturer shall be computed by adding a minimum markup of not less than twenty-five percent to the wholesale invoice price for sales by the manufacturer to retail permit holders for the same product and brand in the same size container.

(2) The minimum retail selling price for retail sales made by a wholesale distributor shall be computed by adding a minimum markup of not less than twenty-five percent to the wholesale invoice price for sales by the wholesale distributor to retail permit holders for the same product and brand in the same size container.

(3) The minimum retail selling price for retail sales made by a retail permit holder shall be computed by adding a minimum markup of not less than twenty-five percent to the wholesale invoice price to them for that product and brand in the same size container,

(4) Deposit charges for the bottle, can, case, or keg shall not be included as part of the cost or included in any computation for determining the minimum retail selling price with respect to any class of liquor permit holders.

(5) The minimum retail selling price of beer packaged by the manufacturer to be sold as an individual sealed container shall be computed, to the nearest cent, by dividing the number of individual sealed containers in an original shipping carton or case into the minimum retail selling price, as computed herein, for that shipping carton or case.

(C) Except as otherwise provided in this paragraph, beer packaged by the manufacturer to be sold as part of a multiple-container package may not be repackaged or split apart by a retail permit holder into smaller, multiple-container packages of the same brand.

(1) When not prohibited by the manufacturer, individual containers of beer purchased as part of a multiple-container package may be sold as individuals.

(2) When not prohibited by the manufacturer, a retail permit holder may sell beer in packages containing two or more brands, otherwise known as "mix and match," provided the products contained in the package are selected by the consumer and the minimum markup requirement is met for each container in the "mix and match" package.

The Patriot News
By Sue Gleiter | sgleiter@pennlive.com
on March 22, 2013 at 5:26 PM, updated March 22, 2013 at 5:28 PM

Shoppers in Pennsylvania would be able to purchase beer, bread and a bottle of wine if a bill that would privatize the sale of alcohol in the state passes.

Already, more than 150 supermarkets in the state sell beer via restaurant liquor licenses. Those licenses require supermarkets to have in-store cafes selling food and designated cash registers to ring up six-packs of beer.

Under a bill headed to the Senate that would dismantle the current way alcohol is sold in Pennsylvania, supermarkets would continue to purchase those licenses along with separate licenses to sell wine.

There is no provision for supermarkets to carry spirits such as vodka, rum and gin but owners could opt to purchase wine and spirit licenses.

Supermarkets want to sell wine and they wouldn't mind selling spirits, said David McCorkle, president and CEO of the Pennsylvania Food Merchants Association in Camp Hill.

In fact, McCorkle said that many chains are already looking ahead. Most retailers operating stores in Pennsylvania own out-of-state stores selling alcohol so they know the business, he added.
“We are interested in selling wine in our stores. No 1, improved customer access is what we are most focused on, and No. 2 it is helpful to our business,” Dennis Curtin, spokesman for Weis Markets in Sunbury.

The chain sells beer and wine at its stores in New York and West Virginia, as well as beer in 15 of its Pennsylvania stores.

“Wine is a natural complement to food, and in our business one of our major areas of focus is convenience and one-stop shopping convenience at that,” Curtin added.
Giant Foods spokesman Chris Brand said the chain is encouraged by the recent vote on the alcohol privatization bill. 

"We look ahead to the debate in the Senate which we hope will bring genuine consumer convenience and choice, including beer and wine, to Giant customers," he said. Giant sells beer at its supermarket on Linglestown Road in Susquehanna Township.

Grocery stores are most interested in selling beer and wine, and then spirits, McCorkle said.
McCorkle said the bill currently would carve out about 820 grocery licenses, not enough to allow the more than 5,000 grocery outlets throughout the state, to sell wine.

The bill also leaves convenience stores out of the equation. McCorkle would like to see more grocery licenses, and licenses for convenience stores.

Sheetz is actively supporting Gov. Tom Corbett's liquor privatization effort, even though it is unclear how much the chain would benefit from the legislation in its current form.

Earlier this week, the Altoona-based chain sent an e-mail to its loyalty card customers, urging them to chime in on the liquor privatization debate now raging in Harrisburg by visiting its FreeMyBeer.com Web site.

Specifically, Sheetz called on customers to send electronic form letters supporting privatization – and the future prospect of being able to buy beer in its Pennsylvania stores – to their local lawmakers.

McCorkle stressed the concern for retailers is that they adequately serve consumers, who say they want the convenience of buying alcohol in supermarkets, convenience stores, pharmacies and big-box stores.

In Ohio, there is one retailer selling alcohol for every 900 adults versus one outlet for every 13,000 people in Pennsylvania, he said.

“When we talk about convenience, I think that statistically really sort of hits it on the head,” McCorkle said.

The industry in the state, he added, needs to create a level playing field, noting that if one food retail operation can carry a product, all food retail operations should be able to carry those products.

» Convenience Store flack responds Read More

Coming to Pennsylvania Soon - The Beer Run!

What about the beer run? Does the theft of beer occur on a regular basis from convenience stores in states where beer is sold? Does it pose a threat to the safety of the public? A Justice Department study in Arizona says yes. It says that 25% of the thefts are by minors who can't buy beer, and the balance are by people who already have a criminal record.

What the Pennsylvania Convenience Store Council is saying:

“Many organizations are trying to paint PA Food Merchant Assn. members and their industries in a negative light through sites such as www.pabeerrun.com

“Theft for these products is not any more prevalent than any other product in the stores,” according to David McCorkle, PFMA News Release, 4/29/13

A starkly contrasting statement from PFMA's own recent publications and other public pronouncements.

In 2011, grocers and convenience stores, under the auspices of PFMA, offered their support to a new law that has now been introduced in this current legislative session as HB 1000, to increase the penalties on shoplifters. See Page 13.

Press Release (4/24/2013)

HARRISBURG-- The House has passed legislation … to raise the penalties for those convicted of retail theft.

House Bill 1000 lowers the threshold for retail theft to be graded as a felony of the third degree from $2,000 to $1,000. Currently, retail theft of more than $150 up to $2,000 is a first-degree misdemeanor, punishable by up to five years in prison. Making thefts of more than $1,000 a third-degree felony raises that punishment to a maximum of seven years in prison and a fine of up to $15,000.

According to a 2012 National Retail Federation survey, 96 percent of retailers surveyed said they had been the victim of organized retail theft.  Nationally, retailers lose $20 billion to $30 billion to organized retail theft and Pennsylvania loses approximately $70 million in sales tax revenue each year according to the Pennsylvania Retailers' Association.  Earlier this month, Montgomery County prosecutors prosecuted a New Jersey man for acting as the ringleader of an eleven-county organized retail theft ring.

The following was in a press release was issued by the Convenience Store Council following the adoption of another law dealing with retail theft in 2010:


Organized groups of professional thieves steal more than $30 billion in merchandise from national retailers annually with little fear of serious punishment. According to the Food Marketing Institute (FMI), Pennsylvania loses an estimated $81 million in tax revenue annually as a result.

ORC is different from common shoplifting. This bill is specifically aimed at professional thieves who make a living out of organized retail crime.

ORC gangs have been linked to international terrorism and payments to “boosters” often enable drug addicted thieves to continue their addiction.

The bill establishes ORT as a felony of the third degree if the retail value of the stolen merchandise is at least $5,000, but not more than $19,999.  If the retail value of the stolen merchandise is at least $20,000, the offense is considered a felony of the second degree.

“Wegmans appreciates the efforts of Representative Caltagirone and Representative Marsico to strengthen the retail theft laws to include Organized Retail Theft as a specific offense,” said Adam Nowicki, current PFMA/PCSC Loss Prevention Committee Chair and Wegmans Food Markets Pennsylvania division trainer.

Nancy Jones, previous chair of PFMA's Loss Prevention Committee and vice president of asset protection at Giant Food Stores says, “This new law will give district attorneys and law enforcement officers better tools to prosecute the perpetrators of organized retail crime. We really needed this change in Pennsylvania.”

In July 2010, the PFMA/PCSC Loss Prevention Committee will work to educate law enforcement on the passage of this bill into law. On July 14, committee representatives will provide concurrent presentations at the Pennsylvania District Attorneys Association Summer Meeting in Erie as well as the Pennsylvania Chiefs of Police 97th Annual Education and Training Conference in Lancaster. PFMA also has plans to work with trainers at the Municipal Police Officers' Education & Training Commission (MPOETC) to inform them about the new law.

Press Release, Governor Rendell Signs PFMA/ PCSC Supported Organized Retail Crime Bill Into Law, June 16, 2010.

Clearly the issue of theft is a major concern for retailers. While PFMA and the Convenience Store Council attempt to publicly portray this as a non-issue, their actions and words tell another story. They know the Beer Run is coming to Pennsylvania if HB 790 becomes law, and are taking steps now to address it through legislative subterfuge.

Other articles:

PFMA Loss Prevention Committee Sees Movement on ORT

Merchant tough on shoplifting IGA owners: You steal, they prosecute

Tri-State Organized Retail Crime Conference Convenes at St. Joseph's University

Will beer thefts rise with privatization? Distributors warn of 'beer runs'



Top 10 Reasons to Prohibit Beer Sales in Convenience Stores

 

1. Pennsylvania does not want to suffer the "beer run."

Visit PaBeerRun.org for more information. A "beer run" is the nickname that police have given to the crime of stealing alcohol from grocery and convenience stores. Once a rarity, beer runs occur with surprising frequency around the country. The crime usually involves one person distracting a single sales clerk (in the case of convenience stores), and then dashing out of the store with however much beer they or a partner can carry.

2. Employees already report "workplace safety" as an important reason for quitting.

On May 23, 2011, the Convenience Store News published a story by Don Longo which was cast as their "HR & Labor Study." The story claims that the "rising expense of credit and debit card transaction fees essentially resulted in their employing fewer workers per store." Starting wages are $8.01 per hour with an average 36 cent increase after six months. They reported a 45% turnover rate, an improvement of the 100% reported in the year 2000.

Why do employees get fired or quit? Figure 4 is "What Factors Impact turnover Rates?" They are ranked from 1 to 8, with 1 the most impact. In addition to "workplace safety", they list "dismissal for cause" just slightly less than "wages", which is the number one reason. Reasons also include "insufficient training" and "overnight hours".

3. Busy convenience store clerks must already "supervise, observe and control" the gasoline pumps, remain in a "principal control location" within "arm's length" of an emergency switch, prevent dispensing into illegal containers, and "handle accidental spills".

The Pennsylvania Code provides significant duties for convenience store clerks relating to the sale of gasoline. These duties are inconsistent with the responsibilities involved with the selling of beer. They are set forth in law:

§ 13.115. Attended self-service stations.

(a) Dispensing devices. Only approved special dispensing devices which are designed for self-service use or have been modified in an approved manner for self-service use and are remotely controlled by equipment specifically approved for use with such special dispensing devices are permitted at self-service stations. The use of control or dispensing equipment comprised of an assemblage of components which, as a complete unit, has not been approved by a nationally recognized testing laboratory for the use intended is prohibited.

(b) Supervision of dispensing. There shall be at least one attendant or supervisor on duty while the station is open to the public. The primary function of the attendant or supervisor shall be to supervise, observe and control the dispensing of flammable or combustible liquids. At all times during the dispensing of flammable or combustible liquids, the attendant shall remain at the principal control location, that is, within arm's length of the remote control facilities. The dispensing operations shall at all times be in clear view of the attendant, and placing or permitting any obstacle between the dispensing operation and the attendant so as to obstruct the view of the attendant is prohibited. The attendant shall prevent the dispensing of flammable or combustible liquids into portable containers that do not comply with § 13.111 (relating to storage and handling). The attendant shall control sources of ignition and immediately handle accidental spills and use fire extinguishers if needed. The attendant or supervisor on duty shall be capable of performing the functions and assuming the responsibilities covered in this section.

(c) Emergency controls. Emergency controls, including the main power shutoff switch or switches, are required and shall be independent of the approved special dispensing devices and control equipment. Such controls and switches shall be installed at an accessible location not more than 15 feet from the principal control location of the attendant and not more than 100 feet from the furthest self-service dispensing device. Use of the emergency controls, including the main power shutoff switch or switches, to control the dispensing devices in other than an emergency situation is prohibited.

4. "Vendor shrink/theft" already exceeds employee alcohol use on their reported work force problems.

On May 23, 2011, the Convenience Store News published a story by Don Longo which was cast as their "HR & Labor Study." The story claims that the "rising expense of credit and debit card transaction fees essentially resulted in their employing fewer workers per store."

Figure 2 lists the "Problems" with the "Quality and Integrity of Work Force" showing the result of C-store responders having "rated on a scale of 1-10, where 1-0 - most serious problem." The category of "Vendor shrink/ theft" rates a 3.69, above alcohol use on the job and about 25 per cent less than "Employee shrink/ theft".

5. Police in Shippensburg have to provide special security at a convenience store near campus, even though it does not sell beer now!

Fred A. Scott is the Chief of Police of Shippensburg Police Department. He has 9 full time and 5 part time officers. The University is 4 blocks away from a convenience store that does not now sell beer and the facility is located in an area of private student housing.

The chief has lived in the area for 40 years, patrolled as a policeman for 30 (most as a member of the Pennsylvania State Police) and has served as Chief for 13 years.

According to the chief, the convenience store as currently operated (without beer) is a student hangout starting at about 10 p.m. After 11 p.m. people from town do not shop there because of the students and their behavior. On Thursdays (thirsty Thursdays) Fridays and Saturdays when students are in town it is packed. He arranges for a patrol car to park next door. To do this, he has had to ask for and receive additional funds from the Borough. The store has consistently declined to provide additional security.

About 90% of the following classes of arrests come out of this location: public drunkenness, DUI, disorderly conduct, retail theft and underage drinking. This store is responsible now for more calls than the remaining bars and social clubs. Read his testimony before borough council.

6. Employee theft is largest reported problem with integrity of the convenience store work force.

On May 23, 2011, the Convenience Store News published a story by Don Longo which was cast as their "HR & Labor Study." The story claims that the "rising expense of credit and debit card transaction fees essentially resulted in their employing fewer workers per store." Figure 2, entitled "Problems with Quality and Integrity of Work Force," shows the result of C-store responders having "rated on a scale of 1-10, where 10 - most serious problem." The greatest problem was reported to be "Employee shrink/thift" with chains rating it as a 4.88, and "Drug/alcohol use on the job" to be at 3.05 for chains, or 62 percent as high.

7. In 2011 the convenience store employee turnover rate was 45%, worse than 2010 but better than the 100% rate reported in the year 2000, thanks, they say, to the recession.

On May 23, 2011, the Convenience Store News published a story by Don Longo which was cast as their "HR & Labor Study." The story claims that the "rising expense of credit and debit card transaction fees essentially resulted in their employing fewer workers per store." It said, "Turnover rates are slightly higher this year compared to a year ago, but well below the more-than-100 percent store level turnover c-store retailers faced in 2000."

8. The starting wage at a convenience store is only $8.01 per hour with an average 36 cent wage increase in six months, a reduction of 10 cents from the prior year!

On May 23, 2011, the Convenience Store News published a story by Don Longo which was cast as their "HR & Labor Study." The story claims that the "rising expense of credit and debit card transaction fees essentially resulted in their employing fewer workers per store."

View the Convenience Store Report

In the above report, Figure 9 is "Starting Hourly Wage for Store Associates." It shows a mean wage for 2011 of $8.01 per hour, up from $7.78 in 2010. Figure 10 shows the respondents view of when store associates were given their first increase, and they list that the average increase was 36 cents after six months, which was a longer wait for ten cents less money than 2010. About 40% of the stores conduct no formalized performance reviews, which is less than the number than train their employees in "upselling".

9. One of the most reported problems with the "Integrity" of the convenience store work force is "drug/alcohol use on the job."

On May 23, 2011, the Convenience Store News published a story by Don Longo which was cast as their "HR & Labor Study." The story claims that the "rising expense of credit and debit card transaction fees essentially resulted in their employing fewer workers per store."

View the Convenience Store Report

In the above report, Figure 2, entitled "Problems with Quality and Integrity of Work Force," shows the result of C-store responders having "rated on a scale of 1-10, where 10 - most serious problem." The greatest problem was reported to be "Employee shrink/thift" with chains rating it as a 4.88, and "Drug/alcohol use on the job" to be at 3.05 for chains, or 62 percent as high.

10. Food merchants really believe and tell legislators that selling beer is the same as selling bread!

On May 23, 2012, Randy St. John, senior vice president of the Pennsylvania Food Merchants Association and the PA Convenience Store Counsel, wrote to the members of the House of Representatives saying:

"We do not feel that state government should determine how many outlets there are for adult beverages any more than they should determine how many drug stores, department stores, barber shops or bakeries exist with the state."

This view of the way a civilized society should operate is contrary to the research and opinions expressed by most medical professionals, including those at the U.S. Centers of Disease Control and the World Health Organization.

Read PFMA's letter

If Pennsylvania privatizes alcohol, will drinking increase?
April 24, 2013
By Miriam Hill, Inquirer Staff Writer

It's a simple, critical, and sobering question at the heart of the debate over privatizing state liquor stores: Will Pennsylvanians drink more booze if sales are wrested from government control?

Advocates say liquor privatization would mean more convenience, better selection, and lower prices.

But public-health experts say reducing the government's role in alcohol sales comes with a potentially harmful downside - people buy more of the alcoholic beverage that is privatized.

In 2011, the Community Preventive Services Task Force, an independent group appointed by the federal Centers for Disease Control and Prevention, recommended against privatization "based on strong evidence that privatization results in increased per-capita alcohol consumption."

In a review of 17 studies on the subject, the task force found that limiting government's role in sales of beer, wine, and spirits was associated with a median increase of 44.4 percent in per-capita sales for the alcoholic beverage that had been privatized without a corresponding decrease in consumption for other types of booze.

"The common theme here is that if alcohol is more available, people tend to drink more," said Robert Brewer, who leads the alcohol program in the National Center for Chronic Disease Prevention and Health Promotion at the CDC. "So then the question is, where does privatization fit into that?"

Read original article at Philly.com


The 10 Reasons to Prohibit Beer Sales in Convenience Stores continues tomorrow on the Morning Buzz!

 
 


Learn More about the problems with convenience store beer sales.