Pennsylvania Liquor Control Board Announces Six-Month Moratorium on Fee Increase and All Retail Price Increases

Urges General Assembly to Enact Reforms Enabling PLCB to Generate More Profit for PA by Modernizing Business Practices

HARRISBURG, Pa., Nov. 18, 2010 /PRNewswire-USNewswire/ -- The Pennsylvania Liquor Control Board today announced a six-month moratorium on a pending increase in the Logistics, Transportation and Merchandising  fee it charges wine and spirit manufacturers.

This step will give the incoming Corbett administration and the General Assembly time to pass legislation that would enact long-sought business-practice reforms that would enable the PLCB to generate higher levels of profit for Pennsylvania.

The LCB also announced that for the same six-month period, ending June 30, 2011, it will not approve any proposed price increases by the makers of the wine and spirit products sold in the LCB's more than 640 stores.

"For 17 years, the LCB has generated substantial profits for the state's General Fund without once increasing the operating fee we charge the makers of wines and spirits to distribute their products from our warehouses to our stores," said LCB Chairman Patrick "PJ" Stapleton. "But nearly two decades of rising costs are beginning to constrain our ability to continue generating profits at those levels."

The PLCB is pleased to have found one-time operational savings that will enable it to forego this fee increase for the next six months, and still return nearly $500 million to the General Fund on close to $1.9 billion in revenue.

The Board urged the incoming Governor and General Assembly to use that time to pass legislation that will enact business-modernization reforms that will enable the PLCB to sustain and even increase those profits in future years, without a fee increase.

"We hope our private sector business partners will join us in using this time to make the case for these best-practice modernizations," Stapleton said.

The PLCB was able to achieve short-term savings by shifting its vendor payment plan to a 60-day payment schedule, which still ranks as a favorable payment-terms policy, compared to other governmental entities. The cash-flow savings from the shift will enable the PLCB to generate an expected year-end profit transfer for 2010-11 of $105 million.

The PLCB long has sought legislative action that would result in business-modernization reforms that would help it to operate more efficiently. Those reforms include:

• Simplified pricing procedures with an eye towards the potential phase-out of the Johnstown Flood Tax.
• Utilizing best practices for procurement of goods, products and services. The current constraints limit the agency's ability to get the very best prices for Pennsylvania consumers.
• Reform human resource, including current civil service procedures.  It is important to note that the LCB would continue to operate in compliance with all its collective bargaining agreements.

Over its 77-year history, the LCB has been able to provide wine and spirit products at competitive prices for Pennsylvania consumers, while still generating substantial profits for the state General Fund. Those profits help to fund public education, public safety and other vital services, and to keep taxes down.

Recognizing the dangers alcohol poses if not consumed responsibly, the PLCB also remains focused on raising public awareness to the dangers of problematic and binge drinking.  Through its efforts, the Board issued nearly one million minor challenges in its retail stores during the last year, ensuring those who are underage are not able to purchase alcoholic products.

"We are proud of our operating record, and proud of the increasingly modern shopping experience we are able to provide our customers," said Stapleton.

Media contact: Stacey Witalec or Stacey Kriedeman 717-783-8864

SOURCE Pennsylvania Liquor Control Board