Wine, spirits privatization critics: Plan will hurt revenue, public health

The Pennsylvania state Senate Appropriations Committee may soon consider a proposal to privatize the sale of wine and spirits, which critics say could harm state revenue and public health.

"The wine privatization proposal that lawmakers may consider today would hurt state revenues and damage public health - what's to like about that?" Keystone Research Center Executive Director Stephen Herzenberg said. "Instead of embracing this misguided approach, lawmakers should modernize distribution of wine and spirits within the existing system."

Herzenberg pointed to a recent study of the fiscal and social effects of privatization conducted by researchers at the University of Michigan that found that states that control the retail distribution of alcohol had per capita revenues from alcohol distribution approximately 90 percent higher than fully privatized states.

The study also found that state ownership reduces alcohol-related social harm, with lower crime crates for aggravated assaults, fraud, domestic abuse and vandalism, and between 7.3 percent and 9.2 percent lower alcohol-related vehicular fatalities.

"If Pennsylvania wants to raise, not lower, revenues from wine and spirits sales - without social harm - it should modernize the existing state stores," Herzenberg said. "Research shows that some states which control the distribution of alcohol manage to achieve nearly three times as much revenue per capita as license states."