Philadelphia Inquirer: Former LCB chief comes out in favor of privatizing State Stores

Posted by Keith Wallace

The Philadelphia Inquirer originally published the story on August 3, 2011. The article is reprinted solely for educational purposes.  It is intended to offer insight into the history of Wine Education in Philadelphia and our place within that history. Links to the original article and author are given below.

Former LCB chief comes out in favor of privatizing State Stores

Author: Troy Graham

The man who once had the greatest say over what alcohol Pennsylvanians could drink has thrown his support behind the effort to take that control away from government and end the State Store system.

Jonathan Newman, the former chairman of the Liquor Control Board, said Tuesday that “the stars are perfectly aligned” to privatize the sale of wine and liquor in Pennsylvania – an endeavor that has failed under three previous governors. “This is the year change is going to happen,” Newman said during a news conference at the Wine School of Philadelphia.

Newman joined House Majority Leader Mike Turzai (R., Allegheny) and State Rep. Tom Killion (R., Delaware), the sponsors of the bill to privatize the LCB’s wholesale and retail operations.

All three said they think the State Store system could be scrapped this year, with a “pro-business” legislature and governor, and public opinion in favor.
“You know what’s beautiful about this issue?” Newman asked. “It brings liberal and conservatives together.”
While supporters do come from both sides of the aisle, so do opponents.

Democrats, including House Minority Leader Frank Dermody of Allegheny County, have expressed concerns about the 5,000 union liquor store employeeswho would be put out of work.

Meanwhile, the Senate’s top Republican, President Pro Tempore Joe Scarnati of Jefferson County, said in July that the timing was not right to privatize liquor stores because lawmakers will have more pressing issues this fall.

Socially conservative lawmakers who want to tamp down alcohol consumption also could oppose the bill.
Turzai has argued that Pennsylvanians pay high prices for a low selection, while the state’s dual roles of selling alcohol and enforcing drunken driving and alcohol laws represent a conflict of interest.

Under his bill, the state would auction off 1,250 retail licenses – 750 to big retailers such as supermarkets, and the rest to smaller enterprises.
He argues this would give the state a huge windfall of cash and create jobs in the long run.

Newman spent more than seven years on the LCB, nearly five as chairman. He instituted the Chairman’s Selection wine program and Sunday sales and has been heralded by wine enthusiasts for his work.

Since leaving the LCB in 2007 during a spat with Gov. Ed Rendell, Newman has been running a wine and spirits business in the Pennsylvania suburbs. Critics have said Newman could profit from privatization.

Newman said the current system drives Philadelphia customers to New Jersey and Delaware.

“We don’t want to be bootleggers. . . . We want to keep our business in Pennsylvania,” he said. “I think for many reasons this is the right thing to do.”
Contact staff writer Troy Graham at 215-854-2730, [email protected] or @troyjgraham on Twitter.

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