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. Upon its creation, Governor Gifford Pinchot stated that the purpose of the Board was to "discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible." [1]
The Board is composed of three Governor-appointed members and one CEO. 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. It has its headquarters in the Northwest Office Building in Harrisburg.[2]
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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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. This includes:
The PLCB policy of "zero tolerance" for sales to minors and intoxicated individuals has resulted in store employees challenging, or "carding", approximately 753,000 suspected minors for the period 10/21/09-6/30/10. This policy and effective implementation are considered to be an excellent deterrent to underage drinking in Pennsylvania. However, according to Stacey Witalec, Director of External Affairs at the PLCB: "... because our stores are not licensed establishments, BLCE does not perform compliance checks in them.", so their deterrence factor is really unknown.
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”.[4] The objectives of the new initiatives are to improve the appearance and marketability of the Wine & Spirits stores, to improve PLCB’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 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. The Bureau of Consumer Relations will solicit feedback from customers, while maintaining its role as a mediator of complaints.
For nearly thirty years, starting with the administration of Governor Richard Thornburgh, efforts have existed to abolish the Board and privatize liquor sales in Pennsylvania. Critics of the Board argue that the Commonwealth would generate $1.7 billion in income by selling state liquor stores to private entities while continuing reap $102 million in annual sales taxes from alcohol sales and $251 million in liquor tax revenues. Further, it has been cited that customers could benefit from lower prices, longer hours, and wider selections at privately-run liquor stores. In addition, privatizing liquor sales would allow the Commonwealth to recoup taxes from sales in neighboring states with wider selections such as New Jersey, Ohio, and Delaware, to Pennsylvania residents. Despite these arguments, efforts to privatize have largely stalled. According to Thornburgh, "the principal roadblock to reform has traditionally been an odd coalition of state store employee unions, fundamentalist anti-alcohol groups, and organizations such as Mothers Against Drunk Driving, all of which perceive that they have legitimate interests which are not susceptible to statewide budgetary considerations. It would take some courageous leadership to stare down this combination, something I do not see in the Commonwealth today." [5]
Opponents of privatization argue that the PLCB is the goose that lays the golden egg, and although it is claimed the Commonwealth would quickly gain $1.7 billion by selling the liquor stores, keeping the stores public would generate significantly more money over time.
The PLCB's operating expenses over time, however, the percentage of actual profit from sales has dwindled from a 7.65% profit margin on gross sales in FY 2000–01 to less than 2.5% in FY 2009–10. In 2000–01, gross sales were $1,140,203,662 and actual profit from sales was about $78 million. However, with nearly $1.9 billion in sales in FY 2009–10, the Board generated only $49.5 million from sales.
Without an immediate infusion of revenue via new fees or increasing the cost of wine and spirits in the Commonwealth, the Board will likely finish FY 2010–11 with a negative retained earnings for the second year in a row. Net retained earnings (historically explained as "operating cash on hand used to purchase product" by the Board) for 2009–10 was -$8.2 million.
The remaining amounts of revenue (the $380 million "golden egg") is actually generated through the collection of sales tax and the often maligned "Johnstown Flood Tax." This revenue, proponents argue, would continue to be collected by private industry.
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