Bill would privatize state retail liquor sales

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A bill to privatize retail liquor sales in Pennsylvania was introduced yesterday by a Montgomery County senator who wants the proceeds earmarked to meet the state's Medicare obligations and to fund a "wholesale structural reform of our state's health care system."

Republican Sen. Rob Wonderling said Pennsylvania should get out of the retail liquor business because it is not a core government function.

Under his bill, 30-year franchises for about two-thirds of the 623 state stores would immediately be sold to the highest bidder, while the remaining stores would be offered to a private equity firm. The equity firm would have a 51 percent share, while the state retained a 49 percent share.

The intent for the "hybrid" approach, according to Mr. Wonderling, is to have the equity firm get the stores that are running efficiently, then sell them for the highest possible price.

The state would retain control of the wholesale liquor operation, and there would be no change in how beer is sold.

To prevent sales to underage buyers, the bill would require everyone purchasing alcohol to show proper identification and clerks selling alcohol would have to undergo special training. No stores selling alcohol could be located within 500 feet of a church, school, hospital, charitable institution or playground under the bill's provisions.

Pennsylvania Liquor Control Board spokesman Nick Hays said board members had not seen the bill and so could not comment on it.

Pennsylvania has one of the most restrictive liquor control systems in the country, with retail sales of wine and spirits limited to the 623 stores statewide. The liquor is subject to a 30 percent markup, plus the so-called Johnstown Flood Tax that legislators put in place in 1936 to help Johnstown recover from a flood. The tax, originally 10 percent, is now 18 percent and amounted to $239 million last year.

With nearly $1.6 billion in sales, the self-sustaining PLCB was able to contribute $482 million -- including the flood tax money -- to the state treasury last fiscal year. But the system also has come under criticism for its pricing and selections.

Following a four-part Pittsburgh Post-Gazette series on the PLCB last week, dozens of readers voiced their frustration about not finding wines they wanted, or paying more than they would in neighboring states.

Others say state stores offer good deals through programs such as the Chairman's Selection, which uses Pennsylvania's purchasing power to get discounted prices.


Steve Twedt can be reached at stwedt@post-gazette.com or 412-263-1963.


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