Pennsylvania Liquor Control Board
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The Pennsylvania Liquor Control Board (PLCB) is an independent government agency that manages the beverage alcohol industry in Pennsylvania. It is responsible for licensing the possession, sale, storage, transportation, importation and manufacture of wine, spirits and malt or brewed beverages in the Commonwealth, as well as operating a system of liquor distribution (retailing) and providing education about the harmful effects of alcohol consumption. The PLCB was established in conjunction with the 21st Amendment and the repeal of prohibition. In 1933, just four days before the sale of alcohol became legal in Pennsylvania, the Board was officially organized. The Board is composed of three Governor-appointed members. They are appointed to staggered four-year terms ending the third Tuesday in May, and are subject to a two-thirds confirmation vote in the commonwealth Senate.
On-premise retail licenses and off-premise wholesale licenses are distributed via a quota system. Under this structure there is one retail license granted for every 3,000 inhabitants and one wholesale license granted for every 30,000 inhabitants within a given county. There are over 20,000 businesses in Pennsylvania which are licensed by the PLCB to handle alcoholic beverages. Restaurants and food operations that are licensed to serve or sell drinks in Pennsylvania must purchase their liquor from the PLCB. If a wine or spirit is not on the list of registered brands, then it cannot be bought or sold in Pennsylvania.
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[edit] Wine & Spirits
The PLCB holds monopolist rights to the distribution of all wines and hard liquor in the commonwealth. To this end, the agency owns and operates Wine & Spirits retail locations, commonly referred to as "state stores," in all 67 counties. This government corporation is the largest purchaser of wine and liquor in the United States and, after the Liquor Control Board of Ontario, which operates in a slightly more populous Canadian province, the world. Wine & Spirits stores were allowed to conduct business on Sundays starting in February 2003 through the enactment of Act 212 of 2002, approved by the Pennsylvania General Assembly in December 2002.
In Fiscal Year 2005, sales were almost $1.6 billion, with approximately $80 million being transferred to the commonwealth treasury. In addition to this profit, 18% liquor tax (included in the shelf price) and 6% sales tax are collected. PLCB revenue is contributed to the Pennsylvania Department of Health's drug and alcohol programs. It also fully funds the Bureau of Liquor Control Enforcement (BLCE), the section of the Pennsylvania State Police responsible for the enforcement of all liquor laws.
Young adults who are "carded" at Wine & Spirits stores have their identification data entered into the point of sale register. It is used to generate a "Declaration of Age" form to be signed by the purchaser and witnessed by the clerk. Identification data is not stored in the system, but the form is assigned a serial number concurrent with that assigned to the subsequent transaction. This discourages the purchaser from later transferring merchandise to minors, makes the clerk accountable for age verification, and allows the agency to maintain statistics on the number of people "carded" in a selected timeframe.
People who are employed by retail establishments run by the PLCB are Commonwealth of Pennsylvania (state) employees/civil servants. Depending on their position classification, they work either full-time or part-time and receive benefits commensurate with the jobs listed at PCLB Employment Opportunities. Unlike privately-owned and -operated liquor store employees in most other states, these positions provide some form of benefits and some civil service protection against layoffs. The cost of alcoholic beverages sold in "state stores" reflects these benefits.
[edit] "Benefits" to Customers
The PLCB is one of the largest purchasers of wine and spirits in the United States, but fails to pass the significant volume purchase discounts on to customers. The Board generates economies of scale through the sharing of administrative costs between marketing, licensing and alcohol education functions.[1] Despite this, wine and liquor sold in neighboring states is consistently up to 40% less expensive than in Pennsylvania. It is illegal to transport any alcohol beverage purchased in another state into Pennsylvania[citation needed]. Lack of competition in beer sales, and inability of distributors to sell six-packs, pushes the price of many six-packs sold at taverns to over $10.
[edit] Economic Contributions to Pennsylvania
The state liquor tax of 18% is included in the shelf price of each item. The PLCB transfers all tax moneys and all operating profits (revenues remaining after operating expenses and payments to other Commonwealth Agencies) to the State Treasury.
Sales by the Wine & Spirits stores in 2006-2007 were up by 7.2% to $1.69 billion and the PLCB provided almost $487 million to the Pennsylvania General Fund. This is the highest amount ever contributed by PLCB and consisted of $337 million in liquor and sales taxes and $150 million from the state stores fund, which is driven by profits from Wine & Spirits store sales. Board Member Thomas F. Goldsmith said “… we generated enough revenue to fund the entire state Department of Conservation and Natural Resources and the Office of Attorney General for a year – with room to spare.”[2]
The PLCB contributes to the economy in other ways. State and Local Sales Taxes are collected and reported to the Revenue Department. Approximately 630 stores are leased from private landlords. The resulting lease payments infuse over $34.9 million to the Pennsylvania economy. Warehousing services for three distribution centers in Pennsylvania are contracted to others. This outsourcing contributes an additional $25.4 million. [3]
The PLCB is responsible for licensing Pennsylvania businesses to handle alcoholic beverages. Approximately 21,000 businesses producing an approximate annual business volume or $13 billion are licensed.
[edit] Programs to Deter Underage Drinking
The enforcement of liquor laws is the responsibility of the Pennsylvania State Police, Bureau of Liquor Control Enforcement. This function is fully funded by the PLCB out of operational revenues.
A bureau established by the PLCB provides educational material to youth, legal consumers and beverage alcohol servers. These include:
- The L.C. Bee program - a preventive program introduced to elementary school children. (“L.C.” is an eight foot tall bee who helps children understand the dangers of alcohol.) This program is staffed by PLCB employees who volunteer their time.
- RAMP (Responsible Alcohol Management Program) is directed at establishments selling alcoholic beverages.[4]
The PLCB has a policy of "zero tolerance" for sales to minors and intoxicated individuals. Store employees required more than 884,780 suspected minors to produce age-verifying information in calendar year 2005. The effective implementation of the zero tolerance policy is a deterrent to underage drinking in Pennsylvania. [5]
[edit] New Initiatives under “PLCB 75" [6]
PLCB will introduce new marketing, licensing and alcohol education programs in 2008, coinciding with the agency’s 75th anniversary and grouped under the title “PLCB 75”. The objectives of the new initiatives are to improve the appearance and marketability of the Wine & Spirits stores, to improve PLBC’s licensing and alcohol education, and to find ways to increase the revenue generated for the benefit of Pennsylvanians. Market research will be used to develop a new look for store interiors and the arrangement of inventory and stores will be branded in a fashion similar to other major retailers. Employee training will be accelerated so that the staff of the premium collection stores will be able to offer expert advice to store patrons.
Alcohol education programs will focus on the critical social issues of underage and binge drinking. The PLCB will work closely with school, community leaders, law enforcement and licensees to help them identify and prevent high-risk behavior in teens and young adults.
Licensing and consumer relations will also be improved. “Licensees account for one-quarter of the PLCB’s business and we want to improve our service to these important customers,” Chairman Stapleton said. The Bureau of Consumer Relations will solicit feedback from customers, while maintaining its role as a mediator of complaints.
“Our stores will keep changing for the better, our licensing and education efforts will continue to improve and we’ll keep looking for ways to increase the revenue we generate to benefit all Pennsylvanians,” Stapleton said.
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