Privatizing Liquor Sales

Wine & Spirits Store 1405, North Atherton St., State College, PA
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When the Pennsylvania Liquor Control Board was established in 1933, its purpose, according to then-Governor Gifford Pinchot, was to “discourage the purchase of alcoholic beverages by making it as incovenient and expensive as possible.” In the last 40 years, three governors have tried—and failed—to privatize liquor sales in Pennsylvania. WPSU’s Patty Satalia reports on House Bill 11—and the latest arguments for and against privatizing.


Ellen Dannin
State College
Dec 14, 2011

A key argument for privatization is that a cost-benefit analysis supports privatizing a service. However, research has shown that most costs are not identified or are not easily quantified. In the case of liquor sales, one obvious cost would be losing revenues from liquor sales.

There are less obvious and hard to quantify real costs. For example, it is important to ensure that liquor is not sold to minors. It is also important not to create incentives to push alcohol sales in order to boost profits. When liquor sales are controlled by the private sector, the profit motive creates strong incentives to boost sales.

There are well known and large costs of pushing alcohol consumption, but tracking and identifying those costs and coming up with a dollar figure is a challenge. But if those costs are not taken into consideration, we may make a decision that is harmful and based on inadequate information.

Paul Rutter
Mount Olive, NC
Jan 03, 2012

Prohibition was from 1920 to 1933, so . . . when this Governor Pinchot saw it would end, was he or the state legislature looking to instill their wishes against what the people wanted by way of repeal? Prohibition ended in December 1933.

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