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The truth about liquor control

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By Antony Davies & James R. Harrigan
Thursday, June 27, 2013, 8:55 p.m.
 

Pennsylvania has held a monopoly on the sale of alcoholic beverages since the repeal of Prohibition in 1933. Now, 80 years later, the political will apparently exists for the state to get out of the liquor business entirely.

Gov. Corbett has indicated his desire to privatize the industry, and he has the political support in the Senate to do it. The House has already voted in favor of privatization. Not surprisingly, this has some people very worried.

Who? The United Food and Commercial Workers Union, which represents some 5,000 employees who staff Pennsylvania's 600 state-run liquor stores. The union is in the midst of a hard-nosed ad campaign against privatization, claiming that privatization will raise prices and cost the state revenues and jobs.

But they are dead wrong. Worse, they are lying. As any consumer knows, monopolies mean higher prices and worse service. Taxpayers pay twice for state monopolies: in higher prices and in higher taxes.

But these problems pale in comparison to the blatant lies presented in the union's latest ad campaign. This cinematic masterpiece features a little girl at her parents' funeral after they were killed by a fictitious drunken driver. A narrator reassures us: “Thanks to the current laws and the effectiveness of the wine and spirits store employees, Pennsylvania has the lowest death rate associated with alcohol consumption in the nation. Tell your state senator to say no to liquor privatization. We don't want other children to lose their parents.”

Except this is not true. For DUI fatalities per capita, Pennsylvania ranks 18th out of the 50 states. Half of the states with lower DUI fatality rates have privatized liquor markets. None has more stringent alcohol controls. For alcohol-related crash rates, Pennsylvania ranks 26th out of the 50 states. For alcohol-related deaths among minors, Pennsylvania ranks 20th. Again, half of the states with lower alcohol-related deaths exercise no control over their alcohol markets.

Don't take our word for it. Or the union's word. The Mackinac Center has compiled data ( mackinac.org/depts/fpi/alcoholcontrol.aspx) from the Centers for Disease Control and Prevention and the National Highway Traffic Safety Administration that show how DUI fatalities, underage drinking, binge drinking and underage binge drinking differ between states that monopolize their alcohol markets and states that privatize their alcohol markets. The data tell a consistent story: Allowing the state to monopolize the alcohol industry doesn't make our roads safer or keep alcohol out of the hands of our teenagers.

What the union really wants is to preserve its exclusive control over a lucrative market. The union does not like competition and will gladly employ deception if doing so preserves its hold over our wallets.

The only group that stands to lose with privatization is the group that is lying to you: the leadership of the United Food and Commercial Workers Union. So contact your state senator, but tell him that you are tired of paying for a massive state monopoly whose only contribution is to drain your wallet while lying to you that it is doing so for your own good.

Antony Davies is associate professor of economics at Duquesne University. James R. Harrigan is a fellow of the Institute of Political Economy at Utah State University.

 

 
 


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