Union: Washington auction shows PA liquor privatization unrealistic
The result of a liquor store license auction in Washington state undermines the rationale for privatization in Pennsylvania, according to the union representing state store employees.
Washington last week announced the results of an online auction for the licenses of its 167 liquor stores. Voters last year passed a referendum privatizing the system.
The auction earned $30.75 million, or $184,000 per license. Yet, privatization advocates have claimed Pennsylvania could raise nine times more per store, United Food and Commercial Workers Local 1776 said in a statement.
Republican State Rep. Mike Turzai is the lead sponsor of a privatization bill that would auction 1,250 licenses, doubling Pennsylvania's 621 existing liquor stores.
"I personally believe that private industry will jump at the chance to sell wine and spirits in a big way, and, when you include the selling of the current inventory, we can reach as much as $2 billion," Turzai said in July in testimony to the House Liquor Control Committee, according to a transcript on the House GOP website.
A figure of $2 billion works out to $1.6 million per license.
"Licenses just do not sell for that amount anywhere in the country," Local 1776 President Wendell Young said.
The Washington numbers suggest Pennsylvania would earn just $230 million from selling 1,250 licenses, the UFCW said.
A call to Turzai's office seeking comment on the UFCW statement was not immediately returned this morning.
The UFCW backs a bill that would modernize the state store system rather than privatizing it.
To read the article in the Central Penn Business Journal, click here.