Earlier this month The Wall Street Journal published an article, “Prohibition Makes a Comeback”, WSJ Editorial Apr. 06, 2020 and took Pennsylvania to task for closing its state-owned liquor stores, which of course led to a supply problem. (In Pennsylvania, the state is the only seller of spirits.) The state tried to rectify the situation by allowing residents to order product online from one of its state-run stores. But the Pennsylvania state-run stores could not get guarantee everyone’s order could be filled, and orders were limited to six bottles.
But the Journal did not take a look at the bigger issues at play here. Pennsylvania should open up more than its stores, it should open up its system.
The Wall Street Journal opining on the Pennsylvania’s supply problem stated:
“Black markets thrive when the government refuses to let supply match demand, so expect to see rum runners make a comeback.”
The Journal praised New York for allowing alcohol for take-out and delivery and praised Kentucky for allowing alcohol producers to ship directly to consumers. The Journal concluded that:
“Such policies acknowledge that, even in a pandemic, prohibition creates more problems than it solves”.
Where I live in Illinois, even if the liquor stores were all closed, I could obtain liquor from the grocery store. But Pennsylvania’s government-controlled system, dictates that spirits are sold from one source. Yes, there are control states (states where the government runs the store) that are not running into Pennsylvania’s problems. But as we see, in a control state, we are one wrong bureaucratic decision away from chaos.
However, if control states like Pennsylvania opened up its system to private stores, and allowed the market to operate, there is substantially less chance of a supply problem, even in a pandemic.
Second and most important, parts of Pennsylvania’s system are already prohibitive. Pennsylvania does not allow out-of-state suppliers or retailers to ship spirits into the state. Further, it bans out-of-state retailers from shipping wine into Pennsylvania.
The Journal was right when it stated that “Black markets thrive when the government refuses to let supply match demand.” Unfortunately, Pennsylvania created a system where spirits are sold through one source and direct to consumer shipping of liquor is severely limited. There is no way to get product to consumers other than Pennsylvania consumers driving to other states to obtain products.
Today we see the fiasco of Pennsylvania’s system. But make no mistake the system didn’t just fail because of the pandemic; the system was built to fail over many years!