Liquor Control Board price jump draws backlash

Paula Wolf//January 13, 2023

Liquor Control Board price jump draws backlash

Paula Wolf//January 13, 2023

The Pennsylvania Liquor Control Board’s decision to announce an across-the-board 4% price increase to go into effect Jan. 15 on 3,500-plus items in state stores is being criticized, citing questionable timing and lack of transparency.

In a press release, Andy Deloney, senior vice president and head of state public policy for the Distilled Spirits Council of the U.S., said:

“Ten days is not nearly enough time for spirits producers to plan for and adjust to price increases. This last-minute push by an outgoing administration will have implications not only for spirits producers, but for the Pennsylvania hospitality industry and its consumers. These decisions should be part of a larger discussion with impacted stakeholders, yet this across-the-board increase was done without any consultation or collaboration.

“We are extremely disappointed in the process by which this increase was determined and hope the PLCB will adjust future plans to include consideration of the partners most heavily impacted by their unilateral decision-making.”

Deloney noted that “Pennsylvania consumers have long traveled to bordering states with more favorable markets for spirits products. Increasing prices only exacerbates cross-border sales and continues to drive consumers elsewhere.”

PLCB spokesman Shawn Kelly had called the move “a fair, consistent, across-the-board increase.” He said it will allow the Liquor Control Board to generate revenues needed to offset annual 8% increases in operating costs over the last four years, and projected cost increases in the current year related to personnel, distribution, leases, credit card fees, etc.

In a response to the Distilled Spirit Council’s criticism, Pennsylvania Liquor Control Board Chairman Tim Holden, on behalf of the board including members Mary Isenhour and Randy Vulakovich, issued the following statement:

“DISCUS’s objection to the PLCB’s January price increases is surprising at best, disingenuous at worst. Every single one of the 14 DISCUS director members from which the PLCB buys product increased costs and retail prices within the last two years without PLCB input. Also, since the January price increases were announced, a number of DISCUS members have approached the PLCB about additional cost increases, disappointed that they didn’t get a ‘cut’ of the planned PLCB increases.”

Joe Massaro, president and CEO of the Pennsylvania Restaurant & Lodging Association, also weighed in, calling the “unexpected decision” to raise prices “disappointing.”

“Despite liquor licensees representing nearly 30 percent of the PLCB’s product sales, many feel as if they are not treated as the wholesale partners they truly are. Licensees do not have the luxury of shopping around for better prices on alcohol product, since the PLCB monopolizes the market, which is why PRLA continues to advocate for an increase to the wholesale discount.

“We appreciate those legislative champions who have contacted the PLCB with concerns about this increase and hope the General Assembly will consider acting quickly to help mitigate the impact of this decision on our still vulnerable restaurants and bars.”

State Sen. Mike Regan (R-31, Cumberland and York counties) had released a letter prior to the Liquor Control Board’s announcement, asking that the price increase be removed from the board’s meeting agenda.

The State Senate Law and Justice Committee chairman, Regan called it “an arbitrary decision by your executives to impose an additional 4% tax on these popular products, bringing the total tax to nearly 30%.”

“I am very troubled by the lack of transparency and timing of the announcement,” he continued, noting the Wolf administration ends Jan. 17. “Imposing a last-minute, additional liquor tax on Pennsylvania consumers, in the waning hours of an administration, undermines the public’s faith in government and is bad public policy.”

Regan said lack of transparency “has continued to be a concern I have voiced to the board. During my time as both chairman and a sitting member of the committee, the board has lacked transparency in situations such as closing state stores and rationing products. … Any decision on additional liquor taxes should be left to the new administration and the Legislature, which Pennsylvania’s Constitution vests sole power to levy taxes.”

Paula Wolf is a freelance writer