Young Urges Legislators to Move Forward with PLCB Modernization

HARRISBURG, Pa., May 12, 2011 /PRNewswire/ -- Pennsylvania's legislature should enact legislation allowing the Pennsylvania Liquor Control Board to modernize operations, enabling the agency to contribute tens of millions of additional revenue to the state, Wendell W. Young, IV, Chairman of the United Food and Commercial Workers Pennsylvania Wine and Spirits Council, said today.

"The PA Wine and Spirits shops are tremendous public assets that generate more than $500 million a year for taxpayers.  But we can do more.  Now is the time for the General Assembly to get serious about modernizing the PLCB," Young said.  "Through modernization, the legislature can prevent some of the drastic cuts to public schools, colleges and critical healthcare programs that are now being contemplated."

In the past decade, the Wine and Spirits shops have made great strides on behalf of consumers, including store modernization, Sunday hours, on-line ordering and stores in supermarkets.  The shops offer up to 6,000 products in stock, and access to more than 30,000 products at competitive prices.

Pennsylvania continues to lead the way as a state that appropriately manages the sale of wine and spirits. The Commonwealth has one of the lowest alcohol-related death rates in the nation and ranks near the top of states in total revenue generated from the sale of wine and spirits.

But more work needs to be done to improve the shops on behalf of consumers and taxpayers, Young said.

The PLCB has proposed changes to the agency's enabling legislation that would give it more flexibility in pricing, allow for more stores to be open on Sunday and expand Sunday hours.  The agency also is seeking approval to have wine shipped directly to customers' homes.

Currently, under the state's Liquor Code, the PLCB must apply its markup equally on all products. Under market-based pricing, the PLCB would be given flexibility to apply different markup rates to different products based on local demand.

The PLCB also has proposed changing the way it pays for inventory, moving to a "bailment" system.  Under this new system, wine and spirits distributors would maintain ownership of their products while they sit in the PLCB's storage distribution centers.  Every major retailer in the nation relies on a bailment system.

A shift to the bailment system would result in a one-time revenue addition of $50 to $75 million. In all, the modernization proposals would generate an estimated $50 to $75 million a year in revenue.

"Consumers win. Taxpayers win. These are just common sense ideas," said Young. "Our members look forward to working with lawmakers to see that the PLCB is allowed to operate as a world class retailer."

Young noted the ill-advised efforts to privatize the Wine and Spirits Shops appear unlikely to gain any widespread support, especially in light of the April 12, 2011 recommendation from the Centers for Disease Control.

An independent panel of experts appointed by the Director of the CDC issued a recommendation against the further privatization of alcohol sales based on what it called "strong evidence" that privatization results in "increased per capita alcohol consumption, a well-established proxy for excessive consumption."

Young said: "We know that privatization makes no sense. It jeopardizes 5,000 good, family-sustaining jobs. It jeopardizes more than $500 million in tax revenue and, according to the CDC taskforce and dozens of peer-reviewed studies, it jeopardizes public health and safety.  We need to move on and make sure that the PLCB can operate in a fair and responsible way."

The United Food and Commercial Workers Pennsylvania Wine and Spirits Council represents the more than 3,500 members of UFCW Locals 1776, 23 and 27 who work in the PLCB's 620 stores and distribution centers.  

SOURCE UFCW Wine and Spirits Council