Sunday, February 14, 2016

Ask whether to privatize -- and also how

The state Senate hosted hearings yesterday on privatizing liquor sales in Pennsylvania. The Independent's summary:

Ask whether to privatize -- and also how


The state Senate hosted hearings yesterday on privatizing liquor sales in Pennsylvania. The Independent's summary:

Proponents and opponents of eliminating the state Liquor Control Board (LCB) and selling wholesale and retail liquor and wine licenses appeared before the state Senate Law and Justice Committee with a wide variety of analysis, assumptions, theories and suppositions that effectively cancelled out each other at the end of the day.

Sounds like they made good progress! The experts were debating questions like the impact of privatization on underage drinking and driving under the influence -- clearly important considerations in the question of whether to privatize.

If they get past that issue, there's also the question of how to privatize. Right now lawmakers are thinking about a proposal that would auction off 750 retail and 1,000 wholesale licenses, to raise $2 billion.

For some reason my memory of this is fuzzy, but someone once made the point to me that a deal that limits the number of licenses available in order to raise as much one-time revenue as possible will really only transfer the liquor monopoly from a public one to a private one, and won't necessarily result in better competition, better products and better prices. Some other approaches to privatization should be considered.

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