June 03, 2003|By Jeff Barker | Jeff Barker,SUN NATIONAL STAFF
GETTYSBURG, Pa. - For decades, Pennsylvania's state-controlled liquor store system has lumbered along, an elephant-like monopoly reaping hundreds of millions of dollars a year while losing customers in droves to border-state stores with cheaper prices and more aggressive marketing.
But take notice, Maryland and other neighboring states. Jumbo is stirring.
Proclaiming itself ready to enter a new era, Pennsylvania opened four outlet liquor stores yesterday with newly competitive prices that it hopes will have a speed-bump effect on its residents, who regularly violate state law by heading over the border to avoid their commonwealth's 18 percent liquor tax.
"The whole idea here is to be competitive to the extent we can," said Pennsylvania Liquor Control Board spokesman Bill Epstein. "We've been suffering border bleed. We're 36th in wine consumption and 48th in spirits, behind only Utah and West Virginia. And you know Pennsylvanians aren't drinking less than 48 other states."
All of the new stores - actually three of them are existing stores with a face-lift - were placed near Pennsylvania's borders - two near the New Jersey line, and one each near Maryland and Ohio.
The store that Maryland competitors are warily eyeing sits in a strip mall minutes from the Gettysburg battlefield. It's a fitting site for a new War Between the States, driven not by cannon shots this time but by shots of liquor that, at least until yesterday, were far less expensive across the Maryland line, a scant 12 miles away.
Consider: A 750-milliliter bottle (a "fifth") of popular Johnny Walker Red Label Scotch cost $23.99, or 91 cents an ounce, before the discounts at the tidy Gettysburg store, which pumps in soft rock music and has been in its current location since 1996. Yesterday, where the reconfigured shop had a vinyl "Outlet Store" banner hanging in the window, the same scotch was selling in a 1-liter bottle for $25.99, or 76 cents an ounce.
The store's nearest rival, Mountain Liquors in Frederick County - less than a half-mile from the Pennsylvania line - was pricing the scotch yesterday at $21.99 for a 750-milliliter bottle, or 84 cents an ounce.
In another customer-friendly marketing move a few months ago, Pennsylvania began to permit Sunday sales at 10 percent of its 638 stores, including the one here. It was the first time since before Prohibition that the commonwealth's consumers could legally purchase wine and spirits by the bottle in the state on a Sunday.
Even with Pennsylvania's bold border strategy, Maryland retains some important built-in advantages.
State stores still can't sell beer, which places them at a distinct disadvantage compared with places like Mountain Liquors, which plasters its outside walls with posters for Heineken and other brews.
Nor can the Pennsylvania stores sell peanuts, pretzels or even olives or onions to complement a martini. The state has been reluctant to allow any sales that could place it in competition with beer-selling taverns and other private retailers.
Steve Thomas, general manager of the Gettysburg store, said he's glad the state liquor board finally allowed him to begin selling corkscrews this year. For years, he said, tourists would buy bottles of wine and not be able to open them.
Incremental progress
Thomas says progress comes incrementally. "When I started in 1981, it was strictly cash, no Sunday sales and a fairly limited selection," he said. "In most stores, you told them what you wanted at a counter, and they had to go and get it."
Most of Thomas' discounted booze will be newly offered products or previously sold ones packaged in new sizes, such as the 1-liter Johnny Walker scotch. That's because the state's uniform pricing code forbids selling the same bottle of liquor at one price in Gettysburg and at another price somewhere else.
The state liquor system was created in 1934 out of a compromise between teetotaling Gov. Gifford Pinchot and Joseph Sill Clark Jr., a "wet" politician who served variously as Philadelphia mayor and U.S. senator.
The liquor board's mission might seem schizophrenic to some: sell more than $1 billion in liquor a year while simultaneously promoting responsible alcohol consumption.
But for every politician who argues it is unseemly for the state to be in the liquor business, there is another pointing to the more than $300 million in profits and taxes generated.
Thomas, whose store sells about 271,500 bottles a year, hopes to boost that by 30,000 a year with the new discount offerings that attract customers like William Johns, 50, a Gettysburg-area sheet metal worker.
"I told the guys here a long time ago: `You can get it cheaper in Maryland,'" said Johns, who stopped into the Gettysburg store yesterday to check out the new prices.
Customer loyalty
Although Johns lives in Pennsylvania, he's a regular customer at Mountain Liquors and expects to continue to patronize the Maryland store out of loyalty.
