Wednesday, October 26, 2011

PA Liquor Stores

My general experience is that selection is pretty good (one of the commenters complains about not finding Appleton Estate Rum...which I have purchased from the PA wine and spirits near me).

Wine is too expensive here, but, were it not for taxes, liquor is a good buy, and even with taxes it isn't too bad. But those taxes won't go away with privatization (unless the government wants waaaay less revenue) so the most likely result is that liquor will be more expensive, DE and NJ will be an even bigger bargain, and the state will have given up a profitable if flawed business for a one time pay out and less money down the road.

The thing is, PA is a big state that sells lots of liquor. If PA sells 10k gallons of Grey Goose Vodka (I've no idea how much really gets sold here), then they get to buy all that and have a bigger discount. Dividing that up among 1500 individual retailers means higher wholesale prices and either lower margins or even higher retail prices. Even if a handful of big groups buy out most of those it will still divide the total purchased and make for higher prices. This problem gets worse as the sales volume goes down, which will make it no longer worthwhile to stock things that are currently stocked only because the better pricing allows it.

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