The UFCW PA Wine and Spirits Council is voicing strong opposition for a reckless proposal passed by the House of Representatives today that would dismantle the Pennsylvania Liquor Control Board (PLCB), which last year provided generated $564 million in state revenue, and hasten the demise of Wine and Spirits Stores.

"This legislation would worsen the state's current fiscal crisis and destroy a valuable revenue-producing asset," said Wendell W. Young IV, President, UFCW Local 1776. "Wine privatization would only further increase our structural budget deficit, leaving taxpayers to hold the bag for years to come."

Young said the bill would not generate any revenue for the Commonwealth. According to analysis by Public Finance Management (PFM), commissioned by former Gov. Tom Corbett, the state would need to come up with $408 million in new revenue annually to make privatization fiscally neutral.

Wine accounted for 42 percent of total sales in the stores or more than $848 million in revenue in the last fiscal year. The most popular brands – those most likely sold by the big box chains – accounted for approximately $518 million of total wine sales.

"This privatization proposal will begin draining dollars from the state immediately, and by reducing foot traffic in the Wine & Spirits stores, weaken this asset," Young said. "Modernizing the PLCB makes the most sense for Pennsylvania, especially given the state's multi-billion dollar budget deficit.

"Instead of destroying this revenue-generating agency, let's open more stores inside of or adjacent to grocery stores or beer distributors to improve convenience," he said.

States that have outsourced the sale of wine, including Iowa and West Virginia, ultimately lost the entire asset to the private sector. Iowa, within just three years after wine sales were privatized, experienced a 25 percent drop in revenues to the state.

Young added that the PLCB pays all of its own expenses: those associated with the State Police Bureau of Liquor Enforcement; state drug and alcohol programs; and all employees' costs, including benefits.

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Al Brooks
  June 11, 2016 1:48pm

The PFM report didn't look at anything like HB1690, your point is a straw-man. However, if you really believe the PFM report then you should look at page 111 which said: "Privatization was deemed successful from a revenue standpoint, with profits increasing by $125 million over the first 11 years of privatization compared to estimates under State control of the stores. At the time of the 10-year review, the conclusion was that most of the increase in profits was the result of eliminating the state stores and the costs associated with them." Deemed successful and made more money. Loo