When I served as President of the Western Chapter of the Pennsylvania Restaurant Association, I wrote a series of colums for the Server Foodservice News, an industry publication that is sent to 27,000 Foodservice owners and operators in the Northeast and Mid-West.  Below are a few of my columns!  

December, 2001

THE 18% DISCOUNT FIGHT CONTINUES

In last month's issue of The Server, good coverage was given to the Pennsylvania Restaurant Association's efforts to get the wholesale discount restored to 18%.  We asked you to get involved and write your state legislators, the Liquor Control Board and the Governor's Office.  I am proud to report that as a result of our collective efforts, House Bill #2116 was introduced by Representative Robert Godshall (R-Bucks County who serves as Chairman of the House Toursim Committee) restoring the discount to 18%.  I am especially proud that 67 Representativfes from across the Commonwealth chose to co-sponsor this legislation!!  The co-sponsors deserve a "thank you call" for understanding both the peril of our industry and the unfair competitive disadvantage that we suffer by doing business in Pennsylvania.  They understand that our industry is a cornerstone of the economy, that our health is important to every community in the commonwealth and that for far too long we have been burdened by unreasonably high costs for a basic raw material needed to operate our business.  

After reviewing wholesale price comparisons from other states, I'm beginning to wonder if an 18% discount is enough!  Consider the following:

* A bottle of Beringer White Zinfandel cost an operator $3.95 per bottle in Maryland.  An operator in Pennsylvania must pay $6.44!  That is an increase of 62.5%!  

*  A bottle of Sonoma Cutrer Russian River Chardonnay is priced at $11.99 for the restaurateur in Virginia.  I pay $18.49 in Pennsylvania.  That is an increase of 54.2%!  

*  A bottle of Storybook Mountain Zinfandel "Mayacamas Vinyard" cost an operator in New York $19.33.  I pay $33.49 for the same bottle as an operator in Pennsylvania.  That is an increase of 73.2%!

Are you starting to feel sick?  What right does the state of Pennsylvania have to make the cost of our business so prohibitive?

In most states, you would buy liter packages for most of your spirits.  Spirit companies sell it cheaper by the ounce if you take the larger package.  Pennsylvania will not purchase thosse packages for upscale products.  They would prefer to buy Absolut, Tanqueray, and Crown Royal in 750-ml size, paying a higher cost per ounce.  The reason?  To create the illusion that our prices are lower that they really are!  

Currently, if a vendor wants to put an item on sale, the vendor is responsible for bringing the price down.  But when we buy that item on sale, the state will not let us get the sale price and our 7% discount.  

The state has 90 days to pay for the items they purchase and the product is delivered right  to their doors.  How do they treat their largest customers?  Cash when purchased and buy yourself a big vehicle in order to pick it up yourself!  The state of Pennslvania is the largest purchaser of Wine and Spirits in the world.  Therrefore, they should get the absolute best price!  Why then do they entice so many operators and citizens to illegally purchase from New York, Maryland and New Jersey?

While we certainly have reason to be encouraged with the early response to our efforts, this is not a time for celebration.  Sixty-seven co-sponsors does not ensure that a bill will get out of a committee, be passed by the House, introduced and passed in the Senate, and then signed by the Governor.  We are embarking on a journey that will take longer than it should We may need to show our purchasing power and how importrant of a cog we are in the large beverage chain.  Perhaps we need to pick a day and cripple the entire system by returning some of the excess products that are in our storerooms.  Many of us that have serious Wine Lists have hundreds of thousands of dollars of Special Liquor Orders on our shelves.  Imagine the handling of those returns!  I hope we ho not have to resort to drastic measures.  I hope that we can build a broad coalition with the hotel industry, the beverage industry, the Chambers of Commerce and the Tourism Council.  I hope that together we can make our voices heard and restore some sense to wholesale beverage purchasing in Pennsylvania!   

 

November, 2001

A CALL TO ACTION

On pages 20-21 a considerable abount of space has been given to an issue that is of paramount importance to the Restaurant Industry.  Actually it is vitally important to the Hotel Industry and the Wine and Spirits Industry.  It is important to the various Chamber of Commerces and Convention & Visitors Bureaus in our great Commonwealth.  The issue is acutally important to every single community that values having nice restaurants that employ their citizens, serve their community and desire to stay open for business.  This issue is important to you!  

The issue is the reinstatement of the 18% discount on purchases of Liquor and Wine for licensed, bulk purchasers.  There is no single remedy that could aid an ailing industry more than a fair and equitable discount on Wine and Spirits.  If you have a liquor license and do business in the state of Pennsylvania, then the odds are that the state is your largest purveyor.  Now I know that many of you are thinking that the stae of Pennsylvania cannot possibly be considered a purveyor.  After all, most purveyors deliver their product to your door.  Not the state of Pennsylvania.  Hell, some offices do not even have fax machines to facilitate a seamless order.  Most purveyors give you 15, 30 or 45 days to pay for the goods delivered.  Not the State of Pennsylvania.  There are no terms.  You pay for your purchases when you pick them up.  Many of us have to pay someone else to pick them up.  But my biggest problem with the state of Pennsylvania is the inflated cost of doing business.  Why should we pay more for products that are basic and necessary for the operation of our businesses.  Do you think a manufacturing plant would stand for that?   Why can't we get the same benefits that bulk purchasers receive in other makets?  Why should that bottle of Beringer Chardonnay or Seagram's 7 cost so much more here than it does almost anywhere else in the conutry?

Our discount was reduced to 7% (before the addition of a 6-7% sales tax) in 1991 as part of the "economic recovery" for the state.  Today, the difficult business conditions over the summer capped by the events and aftermath of September 11 make our industry in need of a stimulus for "ecomomic recovery."  

In 1936 the Johnstown Flood was enacted to help out in a state emergency!  Today that extra 18% tax is still collected, but it is our industry that now has the "emergency!"
We need you help!  The Pennsylvania Restaurant Associationm is leading a coalition of businesses to lobby our government to make the necessary changes.  You need to take a few minutes to tell your story.  Call the Governor's office and tell them how it would help.  Write your own letter to your representive.  Tell them how your business has benn affected in the aftermath of September 11.  Many restaurants and hotels have had to layoff staff and reduce others to part-time.  Let them know that we are a cornerstone industry and the second largest private employer in the Commonwealth. Let them know how this discount will allow you to keep more Pennsylvanians employed and keep you from having to "skip a vintage," as many of us in the fine dining sector are doing!  Perhaps it will enable you to make a capital investment in your business that will in turn spur another business segment of our economy.  If you sell Wine & Spirits tell them how difficult it has been for you to make a living this year.  Tell them how this was the toughest summer in history and how the fourth quarter could not possibly make up for what has been lost.  Tell them how your business would be stimulated if this discount were enacted.  

No time to make the call?  Think about what this would mean to your business.  If you average $5,000 worth of purchases each week from your state store, the increase of the discount from 7% to 18% would mean a weekly savings of $550.  That is a yearly savings of $28,600!  We can win this fight if we unite and tell our story.  Don't know who your representative is?   Call the PRA offices (717-232-4433 or 412-481-0380) and we'll give you the name, e-mail and office address & phone number!  

You are not a member of the Pennsylvania Restaurant Assocation?  You should be!  Over 1,500 members throughout the state are spending our money fighting for you!  Why not join the fight and enjoy the many savings and benefits our Association has to offer!  The second largeest employer in the State of Pennsylvania can hae a voice if we can join together to fight for our interests.       

1.  Many of us in the downtown corridor find ourselves struggling today in a very difficult environment.  The challenges we face are tougher than they have been in years.  The economy has softened.  The population continues to both age and decline.  And competition has never been more intense!  Our loyal customers are "diners". They are naturally going to try the many new national options available to them.   We welcome our new neighbors and encourage them to join our restaurant association.  But in this community we now have many more ways to spend our dining dollar.  When dining at Lydia's, The Original Fish Market, The Pittsburgh Fish Market, Palomino, Cap City, Buca di Beppo or many of the other new dining options that are now available the profits from the sale benefits someone else's town.  That is assuming there are any profits.  The market may now be too saturated for any of us to make a decent living in given the current economy.  Such a rapid pace of new openings would have been difficult to swallow in any case.  But for it to take place just as the economy is yawning and the region is sputtering makes it an especially bitter pill.  We need to grow the population of the region just to keep up with the amenities already created.    

2.  A recent trip to the Philadelphia area to play in the Pennsylvania Restaurant Association Golf Tournament at Chester Valley heightened my jealousy of the suburban Philadelphia region.  The area has grown so much since my high school days at Great Valley.  I had to stop at four different
hotels in Exton before finding a vacancy!  The economic changes in eastern Pennsylvania have been much more dramatic during the past thirty years than they have been in the western part of the state.  It would be great for all of Pennsylvania if the West could catch up.  We seem to have most of the ingredients -- the culture, the educational fabric, the health care, the sports teams and stadiums.  Most importantly, we have a work ethic that would make any region proud!                  

3.  A few columns ago I mentioned the irritating highway signs (legalized littering) that grace our State highway entrance and exit roads distracting drivers to the beautiful city of Pittsburgh.  At the time I thought they were exclusive to our region.  However, after being called to an emergency Pennsylvania Restaurant Association Meeting at Penn State I became even more infuriated about this issue.  There had to be over a hundred (I lost count) of these signs publicizing the "Targeted Enforcement Areas" for Seat Belts, Aggressive Driving and Driving Under the Influence all the way to Happy Valley.  Many visitors to our town are asking if we have a problem with "drunken driving" in this community.  What a great introductory message to our Golden Triangle.  Please join me in asking Governor Ridge and Penn Dot to take these irritating signs down!!  Although designed and printed with great public safety intentions, they are a bureaucratic mistake that makes our region a laughingstock! There has got to be a better way to address public safety issues.  

4.  I have tried every way I know to try to convince the Pittsburgh Pirates that it is everyone's best interest to switch the starting times for at least some of the evening games to 7:35 PM.  The later starting times would better allow the dinner/game combination than the current 7:05 PM.  The Pirates are naturally reticent to change their times after the tickets and schedules have already been printed (unless - of course - there is a chance for national TV exposure).  They have promised to discuss it at the conclusion of the year.  Dinner and baseball never went together at Three Rivers Stadium.  The early start and around the stadium parking were a difficult combination.  But we now have urban foot traffic prior to a game at PNC.  Thousands are parking in the urban corridor, walking through our city and across The Clemente Bridge to PNC.  If the games started at 7:35 we could better showcase our city and they would have time to eat!  Levy Restaurants and ARA (the foodservice vendors at PNC) would have 30 more minutes of serving time as well.  They too would increase their sales despite the fact that some guests would be arriving with a satisfied appetite.       

5.  I continue to hope that the "powers that be" in local and state government recognize that now that the David L. Lawrence Convention Center is being demolished it is appropriate to consider a new name for the new Convention Center designed by Rafael Vinoly. Governor Lawrence should be honored some way in the new center, but it should not bear his name.  This is regardless of the sponsorship opportunity secured from naming rights.  In convention industry circles, the name David L. Lawrence does not evoke memories of a great mayor or governor.  It invokes the memory of a bad convention center!  

Thanks for all the constructive comments.  If you are reading this and not a member of the Restaurant Association, please fill out the enclosed application and fax it in!  There is strength in industry unity.