Free Spirits: A Call to Kill the PA Liquor Control Board

Wine School owner, demanding privatization of PA’s booze, calls out the PLCB.

By Randy LoBasso
Add Comment Add Comment | Comments: 13 | Posted Feb. 16, 2011

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Keith Wallace, owner of the Philadelphia Wine School, favors privatization dominated by small businesses.

Photo by Ryan Strand

For Keith Wallace, supporting Tom Corbett for governor was downright painful.

“It goes against everything I believe,” says Wallace, former winemaker and owner of the Philadelphia Wine School on Fairmount Avenue. “And I actually met him, too, after the election. He said I was influential in getting him elected, that I got him two points in Philly. I said, ‘Good, but I only supported you on one issue.’”

The issue was getting Pennsylvania out of the liquor and wine business. As owner of the Wine School, Wallace is one of the largest buyers of wine in the state—purchasing about $100,000 worth each year. He offers several training courses: for enthusiasts, “swirling, sniffing and sipping with the best of them,” and for wannabe professionals, there’s advanced certification and diploma programs, which “cover the complexities of terroir and winemaking for the greatest wine regions in the world.”

Sure, graduates of his programs can flee to California to work in the privatized wine business there, but because the Pennsylvania Liquor Control Board oversees the state’s wine and liquor sales, Wallace’s school is about as far as entrepreneurial enthusiasts can go in Pennsylvania—unless they want to produce the stuff. The workers you see in our state stores are mostly commercial food workers, not wine experts.

“Basically,” says Wallace, gazing out on an icy sidewalk from the confines of his Wine School storefront, “my opposition to the PLCB is on moral and consumer-rights grounds. State monopolies in commerce are a violation of basic liberties in this country.”

Plus, he just really hates those wine kiosks.

Installed in June, the kiosks require patrons to swipe ID, credit card, blow into the machines for blood-alcohol content and smile for a video camera, which is constantly monitored by a state employee. At least one outlet referred to the machines as a “new level of serfdom” for the people of Pennsylvania. What’s more, the kiosks are owned by Simple Brands LLC of Conshohocken, a private company with ties to former Gov. Ed Rendell. Simple Brands won a no-bid contract on the kiosks (the only product it makes), and two of its four investors—Herbert Vederman and Ira Lubert—gave about a half-million dollars combined to Rendell’s campaign.

The Patriot News of Harrisburg found that the PLCB spent $173,000 for customer courtesy training (which reportedly taught cashiers how to say “please” and “thank you”) and contracted the training out to a Pittsburgh firm run by the husband of a top PLCB manager. “I don’t know if you’ve been in one of these stores recently,” Wallace says, “but that’s bullshit.” And more criticism goes straight to Auditor General Jack Wagner, who’s so far found no conflicts of interest in PLCB goings-on. He’s currently looking into whether the kiosks are “delivering the customer convenience and additional revenue to the commonwealth that the Liquor Control Board touted.”

In addition to shady politics, says Wallace, the existence of the machines shows that rather than appeal to the people of Pennsylvania through a change in law, the PLCB has created strange loopholes that allow patrons to buy wine from a public-private partnership vending machine in a vestibule rather than from a human—which benefits donors without having to expend bureaucratic energy.

“The PLCB is admitting to themselves they can’t serve the customer properly and, I mean, have you seen these things? No underage kids fucking buy wine,” Wallace says. “When I was underage the only wine I ever bought was Mad Dog 20/20. Kids are going to buy beer and hard alcohol because it’s going to get them fucked up. Not wine. Even the cheap shit’s expensive.”

Wallace decided he’d become vocal about his disappointment with the PLCB after being asked to comment for a story about the wine kiosks in June. “The [kiosk] process is cumbersome and assumes the worst in Pennsylvania’s wine consumers—that we are a bunch of conniving underage drunks,” he wrote in an e-mail to the AP. “Liquor board members are clearly detached from reality if they think these machines offer any value to the consumer.” A month later, Wallace sent out his monthly Wine School e-newsletter, this one titled “Politics and Wine. ARGGGH!!” He wrote: “Since it is an election year in PA, I figure it was time to go beyond talking. I wanted to see if there was any chance at all at reforming the PLCB. So, for the last few weeks I’ve been talking with some folks down in Harrisburg. I am really excited: we have a once-in-a-decade shot at reforming the PLCB. In those conversations, I have gained assurances that Gubernatorial candidate Tom Corbett will make reforming the PLCB an element of his administration.”

But little of substance has happened since our new leader announced his pro-privatization stance.

In Harrisburg, several lawmakers seem to be attacking the issue from a few angles. The most recent poll on the issue, conducted by Quinnipiac University in December, shows 66 percent of Pennsylvanians in favor of privatizing liquor stores and sales, though state lawmakers readily admit the potential auction of the state’s 629 state stores, 129 new retail licenses and 100 existing wholesale licenses won’t make it into the budget for the 2011-12 fiscal year. “That’s because there’s no way to cleanly, easily deal with this,” Wallace says.

Best-case scenario?

House Majority Leader Mike Turzai is looking to have legislation that would sell off the stores by Memorial Day. “[My legislation] would auction off licenses to private companies to sell wine and spirits. That would bring in $2 billion to the state of Pennsylvania, up front, to help us solve our fiscal crises. And it would continue to bring in tax revenue to the tune of $500 million, annually,” Turzai said in a video posted to his YouTube page.

Republican State Sen. John Pippy recently said that the Law and Justice Committee, which he heads, is going to look at “everything” to “modernize Pennsylvania liquor law.” On Monday, the committee began informational hearings Pippy claims will lay the groundwork for legislation. Specifically, said Pippy, “the House will be originating the bill” that hopes to end the state government’s monopoly on wine and liquor sales, likely through an auction process. The state House Liquor Control Committee has also approved legislation that would allow bars more happy-hour flexibility, though Pennsylvania state police are against such a bill.

Wallace says that whatever happens, the eventual legislation should put small businesses on equal footing with larger ones. “The … privatization I favor is one that is dominated by small independent wine and spirits stores—ones which hire Pennsylvania citizens and are owned by Pennsylvania citizens.”

Which would actually give Wallace’s students the ability run these independent stores, since they’ve got knowledge and expertise from the Wine School, the only one of its kind in Pennsylvania.

But eliminating an agency is harder than it sounds, mostly because, well, it’s a state agency. And one that’s got tremendous clout and wherewithal. But Wallace, who’s moving his business to a new spot in Rittenhouse this spring, is hopeful. “When it comes down to it,” he says, “I’m not hinged on the politics. I don’t care who’s in power. I care about what happens to the consumer and that there’s an open economy. There shouldn’t be dirty politics and back-room deals here. There should just be wine commerce.”

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COMMENTS

Comments 1 - 13 of 13
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1. JasonP said... on Feb 16, 2011 at 09:37AM

“Wine drinkers are snobby shits, but I like this guy. Who'd guess he had brass balls?”

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2. Anonymous said... on Feb 16, 2011 at 11:50AM

“calling the Wine School of Philadelphia "the only school if it's kind in Pennsylvania" is just silly.

WSET classes (the internationally recognized certification in wine education; the Wine School is not accreditated with anyone except itself) are offered in Philadelphia, and throughout the state.”

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3. Ted said... on Feb 16, 2011 at 12:13PM

“I will wait to see the details. Unfortunately, Corbett is so tied to his donors that my guess is we will end up with a very tight, no shipping, three-tier state system. It will be private but with the possibility of even higher prices. Regardless - the existing system needs to be dumped.

The best case would be PA ends up as an "open," reciprocal state like NY. This would also greatly help the in-state wineries. We could actually get a wine culture in PA. It will help the restaurants. They will have more access to wines at more reasonable prices. It will add jobs when the wine shoppes open.

Bravo to Keith for this one!!”

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4. Anonymous said... on Feb 16, 2011 at 12:39PM

“Actually, WSET doesn't have any level of certification. That is just plain bullshit. The Wine School runs professional certification exams out of California. Didn't know that did you?

Comparing the too is silly. You have that right, anonymous. WSET is offered on a part time basis out of rented rooms. The Wine School employs a full time staff, has an actual brick-and-mortar school, and actually works for the benefit of the community at large. The WSET does nothing of the kind.

It's clear from the scope of this article that Keith is sticking his head out for both consumers and the wine trade. Instead of knocking him, maybe Neil Ewing and his clique at WSET should throw their support to the one guy who is willing to take a stand?

From what i have read and heard, this WSET clique has been making the same complaints about Keith and the Wine School for a decade now. It's time to grow up and accept that Keith is doing something great for this town- even if you don't like the guy”

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5. KeithWallace said... on Feb 16, 2011 at 12:44PM

“Hey, thanks for the support! As for the upcoming flame war between WSET and Wine School supporters, lets just end it here, okay?”

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6. LewBryson said... on Feb 16, 2011 at 12:58PM

“Yeah, what he said, mostly, except that while Auditor General Jack Wagner didn't find a legal conflict of interest on the "courtesy contract" bid under state law, he DID say: "Although this contract was awarded according to the letter of the law, there are several incidents that occurred that raise serious concerns and put the PLCB's procurement procedures in question." And quoting from a Pittsburgh Post-Gazette story, Wagner also noted "training to improve employee courtesy, manners and product knowledge wasn't a worthwhile expense. At the least, he said, it should have been done in-house."
Wagner's on-board, but he can only go by the law. And that's kind of where the PLCB is: I despise the state-run stores, but the PLCB's continual defense that they can only do what's legal under the Liquor Code is absolutely true. It's the Legislature that needs to make this happen, and I'd hate to see this be done without input from US, the people who buy and drink the stuff.”

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7. KeithWallace said... on Feb 16, 2011 at 01:12PM

“Very good points, Lew.

I agree that the most important and most difficult bit is to make sure the consumer isn't left out.”

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8. Ted (again) said... on Feb 16, 2011 at 01:51PM

“Best thing we, as consumers, can do is set up our own PAC, raise some money, and wave it in the face of the legislators. This is the only "currency" they understand. Trader Joe's, Costco, Rite-aid, etc will contribute.

This is a Free the Grapes movement and moment for our state. We need to stay on top of the hearings and whatever piece of legislation winds its way through our fine system.”

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9. Will said... on Feb 16, 2011 at 02:11PM

“All the wine snobs that want to get rid of the state's stores had better get ready for higher prices and higher taxes, because that's what all of us will end up with if the private sector takes over. Think about it for a minute. When we get finished sending all the profits out of state to Walmart and Target, what will the genuses in Harrisburg do to make up the difference? And do you know that the pro-selling people in Harrisburg want to change the structure to get rid of some of the taxes. That means other taxes will have to go up, because in case you didn't notice, we have a $4 billion deficit. Do you think that after privatization Big Alcohol and its lobbyests will allow taxes on their products to be raised? No way.”

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10. albert Brooks said... on Feb 16, 2011 at 03:42PM

“It is apparent that Will hasn't read the proposal and is only mouthing the talking points of the union.”

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11. Anonymous said... on Feb 17, 2011 at 04:17AM

“Will, it's deliciously ironic you misspelled "geniuses." Keith Wallace is a loud-mouthed malcontent, but he always has the consumer in mind when going to war against the PLCB. You have to respect that. It's a much better stance than Ewing and Marnie Old who spend more time comparing dick size and suing people than educating the masses and going to bat for those of us who want better selection, more QA, and consistency in our wine and liquor stores. While Wallace, Old, and Ewing are blessed with the same knowledge, but not cut from the same cloth. We really could use some effort and outspoken opinion from the other two in support of us.”

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12. Il Vecchio said... on Feb 19, 2011 at 11:45AM

“Why do people post anonymously? Do they lack the balls to stand behind their comments...the original anonymous poster (Neil?) has an obvious reading disability. The article calls the Wine School ";;;the only one OF ITS KIND...''. It is not and never has been, thankfully, the dry power point presentation offered up by Ewing and the academically oriented WSET program. You want accreditation sans substance, go to WSET. You want to actually learn about wine from the vine to the glass, go to the Wine School. And to posit that Ewing and Old have the same depth of knowledge as Wallace..well, are either of them an alumnus of U-Cal Davis, worked as a winemaker, or been consultants to winemakers in Europe and America?”

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13. J. said... on Feb 27, 2011 at 11:14PM

“i hope this jackass feels good about supporting the campaign of our new Governor Tom Corbett, solely because his single-issue stance about the privatization of the PLCB, when 42,000 people are going to lose their health coverage tomorrow.
maybe the kind of people who can drop this kind of money to act sophisticated with their newfound wine knowledge won't be impacted by the policies this new administration will implement, but thousands of other people (who don't give a shit about wine) are going to have their lives made much more difficult.
but hey, at least he can get that bottle of Bordeaux he's been coveting.
enjoy your new digs in Rittenhouse.
get the hell out of my neighborhood.”

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