Wednesday, April 15, 2020

After Pennsylvania Closed All Liquor Stores, Residents Crossed State Borders To Buy Booze. Now Ohio Is Shutting Down Out-of-State Sales.

By Peter Suderman - April 15, 2020 at 11:43AM

No state has done a worse job regulating the sale of alcohol during the pandemic than Pennsylvania. 

When the state closed all of its liquor stores in March, officials cited health and safety concerns stemming from the COVID-19 pandemic. (Liquor stores in Pennsylvania are all state-run; the government has a monopoly.)

"The health and safety of our consumers and employees is our top priority, and we take our responsibility very seriously," reads a notice on the Pennsylvania Liquor Control Board (PLCB) website. State liquor regulators were aware of the disruption the closure would cause. But "mitigation of the public health crisis must take priority over the sale of wine and spirits, as the health and safety of our employees, customers and communities is paramount." 

The liquor store closures have certainly been disruptive. But, if anything, they have exacerbated the public health crisis, even in other states. 

With few legal options for purchasing spirits inside state borders, residents have flooded liquor stores in other states, with one in New Jersey choosing to temporarily shut down last month because the influx of customers made social distancing impossible. 

The boom in out-of-state business has been so large, and so dangerous to public health, that out-of-state governments are now prohibiting purchases by Pennsylvania residents. 

Yesterday, Ohio's Republican Gov. Mike DeWine signed an order requiring six Ohio counties near the Pennsylvania border to require proof of local residency for the purchase of alcohol. "This is necessary because of repeated instances of persons from Pennsylvania coming into these counties for the sole or main purpose of purchasing liquor," he said, according to a local Fox affiliate. "Any other time, we'd love to have visitors from Pennsylvania, but right now this creates an unacceptable public health issue." 

DeWine's order follows a similar closure in a West Virginia county, which specifically prohibited the sale of liquor to anyone presenting a Pennsylvania ID. In that instance, as well, local health officials specifically cited health and safety concerns resulting from an  increase in cross-border purchases due to liquor store closures.

Pennsylvanians who wanted to purchase spirits had essentially no other place to go. Not even online. 

The state's online liquor sales portal, which reopened this month, has proven barely functional. Even with a reduced selection, a limit on the number of bottles per order, and a cap of one order per day, the site has been unable to cope with demand. Two weeks after reopening, most customers are greeted with a message saying the site is down. 

During the first week of online sales, PennLive reports, about 7,800 people successfully placed online orders—out of 1.9 million people who tried. By the following week, sales data showed 16,825 sales from roughly 2.9 million active users. 

"Consumer interest and site traffic far exceeded our ability to accept orders," a spokesperson said earlier this month, following initial reports of crashes.

In response to the demand spike, the liquor board has instituted an inscrutable system by which successful access to the site is randomized, and the number of orders it fills each day is not disclosed. Presumably, it did not occur to the state's liquor regulators that a completely opaque system in which it's unclear how many orders can be filled, or at what times, would lead to an increase in users checking the site throughout the day, further overloading the system's capacity. 

One way of looking at Pennsylvania's liquor sales travails is as a failure of bureaucratic competence: Other states that control liquor sales have managed the pandemic lockdowns with far less disruption or danger. 

Another way of looking at it, however, is as a failure of the state control model. The fundamental reason why Pennsylvania has so thoroughly botched its liquor sale management is that the state has a near-monopoly on liquor sales within its borders. That means residents can't order out-of-state spirits to their homes. It means that private alternatives cannot fill in the gaps created by the state's poor decision-making and technological incompetence. It means that liquor sales are almost entirely dependent on the whims of the state, and threatened by its foibles, which have been plainly evident over the past month.

I say "almost," because the best option for Pennsylvania residents who want to purchase spirits right now is probably to purchase liquor from one of the state's many craft distilleries. (I recommend Dad's Hat, which makes a delicious rye now available online for direct delivery.) Craft producers won't sell you your favorite national brand, but they will safely and conveniently do what private producers typically do—and what the state, despite its financial interest in the sale of liquor, seems determined not to do: sell you booze when you want it.


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