(Supermarkets have been gobbling up all the R licenses and the LCB's won't say how many more there are | Photo: Jon Geeting)
Pennsylvania’s policy of promoting sky-high liquor license prices by capping the quantity of licenses in each county is a disaster for new restauranteurs, creativity and experimentation in food culture, and economic development of commercial corridors, but there’s an underappreciated way that the state’s liquor bureaucracy makes this even worse than it has to be, by refusing to tell anybody how many liquor licenses there actually are in the world.
House Rep. Frank Burns has been trying valiantly to get the state Liquor Control Board to release numbers on how many revoked or out-of-service R licenses there are in each county, but the LCB has been weirdly resistant to this, as we wrote about back in September of 2019. Now, according to a story in the Patriot-News this week, the LCB is still appealing Rep. Burns's request in court based on the specious argument that providing even the most basic market information would “disrupt” the market.
State Rep. Frank Burns, D-Cambria County, said he was stunned that after the Office of Open Records and the Commonwealth Court ordered that information’s release, the Pennsylvania Liquor Control Board decided to appeal that decision to the state Supreme Court.
“All I’m asking for is a list with two columns: one showing each county in Pennsylvania, and the other showing the number of liquor licenses available for auction in each of those counties,” Burns said in a news release [...]
The agency has declined to share the information, claiming it is exempt from disclosure under the state’s Right to Know Law. It contends that sharing the list of auctionable restaurant licenses would reveal too much information about the agency’s internal management decisions. They also argued that information was a trade secret and confidential proprietary information, and could have a chilling effect on bids for licenses up for auction in certain counties.
Aside from the obvious fact that this is basic public information that everybody has a right to know, the point about disrupting the market is bizarre. Whether you like markets or you don’t, the basic case for markets being publicly beneficial assumes perfect information among all the participants, otherwise one party will have a distinct advantage over the other. Equalizing everybody’s access to the most basic information about what is for sale isn’t “disrupting” the market—it’s creating the most fundamental conditions for there to be any market at all.
It would be one thing if it was the state of Pennsylvania selling R licenses and trying to maximize the revenue generated by license sales for the state, but the state isn’t usually the license seller, a private owner is. The state doesn’t even levy a capital gains tax at the point of transfer for licenses, even though literally all the growth in license value flows directly from the underlying condition of state-imposed scarcity. So all the LCB is really doing by keeping the license quantities a state secret is driving up the selling prices for private parties—something the general public does not benefit from even indirectly.
The Wolf administration should do their part to stop the senseless march toward $1 million liquor licenses, and put pressure on the LCB to withdraw their appeal and stop stonewalling Rep. Burns's very reasonable open records request.