The Pennsylvania Liquor Control Board has been criticized broadly for years for many of its policies, perhaps none more than those involving retail sales of wine and liquor. The complaints are usually that prices are too high and selection too limited. With a new administration arriving in Harrisburg in January 2011, changes in the Liquor Code, some radical, seem inevitable.
In the past decade the LCB has taken many steps to abate criticism by vastly increasing its selections, especially of wines; by creating wine and spirit stores which have self-service; and by permitting beer to be sold in restaurants within supermarkets such as Whole Foods and Wegmans. (In a very recent decision, Wegmans was successful in resisting a challenge to its sale of beer.) In another innovation the LCB has recently employed unmanned, self-service wine kiosks which are just beginning to appear in places such as shopping malls.
At 11th and Locust Streets in Philadelphia, the LCB has installed as a prototype a wine shop which is totally within a restaurant, Garces Trading Company. Patrons can buy wine and drink it with dinner in the restaurant or take it out, and it’s been an overnight hit. It is as controversial as it is innovative and successful, and the concept is being challenged in court by restaurateurs in the area.
Even with these changes, the agency is still far from solving all of its problems; however, legislation which is soon to be introduced should help repair its image measurably, assuming passage:
- Believe it or not, an 18% “Johnstown Flood” surcharge on every bottle of wine or liquor that the State Store sells still exists. (I assume we’re talking about the flood of 1977, not the granddaddy of them all in 1889! Even so . . .) This charge, which almost assures that the State Stores’ prices cannot be competitive with those in nearby states, would be eliminated. The surcharge would be replaced by a tax imposed by the gallon of alcohol, a system in effect in 26 states.
- The automatic 30% mark-up and certain handling fees would be eliminated from State Stores’ products, making them more competitive.
- In what would probably be the most controversial change, the LCB would auction off 750 State Stores’ and 100 liquor wholesale licenses, ultimately privatizing the sale of wines and spirits; the estimated revenue from these sales is $2,000,000,000, and the State would be out of the liquor business.
- Another rather abrupt departure from what’s always been is the proposal to permit retail licensees (restaurants and hotels) to sell wine by the bottle for off-premises consumption.
- The proposed bill would also provide additional revenue to the liquor enforcement and inspection agencies and for alcohol education.
Because alcohol can be a lethal substance when it’s abused, no one seriously challenges the regulation of its sale in restaurants, hotels, and bars. Where the LCB has been most vulnerable is in its State Stores; though polls have consistently shown that a large majority of the public would eliminate them, it has proved impossible to do so in decades of legislative sessions. This proposal to sell and privatize the State Stores comes from the new Majority Leader in the House of Representatives; and since the Governor-elect has expressed his support of the proposals, we may see changes as radical as any since the end of Prohibition.
This bears watching.
— Ken Butera