Review finds Pa. prices for alcohol competitive with surrounding states
July 5, 2014 11:56 PM
Chairman's Selection wines are displayed at the state liquor store in Pittsburgh.
By Emma S. Brown / Pittsburgh Post-Gazette
Supporters of liquor sale privatization take as a given that getting rid of the state monopoly will lead to cheaper alcohol. But a comparison between Pennsylvania prices and those of border stores in surrounding states shows that the Liquor Control Board is competitive for many products.
The Pittsburgh Post-Gazette compared prices from the state's top 12 best-selling wines and liquors with prices in Ohio and West Virginia stores and found that the LCB was cheaper half the time and more expensive half the time.
The state Liquor Control Board has long been a target of frustrated consumers -- like the creators of the "Why the PLCB Should Be Abolished" blog -- who believe its prices are inflated. They have protested, petitioned their legislators and crossed the border to illegally buy their liquor in neighboring states. They cite the 18 percent Johnstown Flood Tax (in place since 1936) as absurd and say the LCB's 30 percent markup is highway robbery.
The assumption that privatization would lower liquor prices did not prove true in the state of Washington, however, where liquor sales were privatized in 2012 after a long battle. On average, Washington charges more per liter of liquor than any other state, according to data from the Tax Foundation.
Pennsylvania has been debating the issue for decades. In June 2012, proposed legislation to restrict the sale of liquor and wine to independent owners reached the state House floor for the first time, and last year the House passed the measure. But last week, Senate leaders said they doubted it would have enough support for a vote anytime soon. The Legislature adjourned for summer recess without taking any action.
To find out how LCB prices compare to those of private stores in neighboring states, the Post-Gazette checked prices of Pennsylvania's top 12 sellers in three stores in Weirton, W.Va., and two stores in Steubenville, Ohio. It used prices on the LCB website for comparisons.
The LCB had the lowest prices in three of six liquor comparisons and three of six wine comparisons. For the remaining brands, Steubenville and Weirton grocery stores offer better deals. The price margins vary -- in some cases, buying from the LCB might save the customer 18 or 20 cents. But a bottle of Jaegermeister Liqueur was $19.99 at a state store and more than $9 more at a Steubenville Kroger, where it sold for $29.05.
To spot-check these trends, the Post-Gazette compared some popular selections that are more expensive. Three of the six higher-tier best-sellers found in state stores were not carried in either Steubenville or Weirton. But Weirton and Steubenville offered better deals on the three brands that were available across the border. For example, Johnnie Walker Black Label 12 Year Old scotch (750 ML) is sold by Pennsylvania for $34.99; at Weirton's Celebrations, it costs $22.09. Redbreast Irish Whiskey Single Pot Still 15 Year Old (750 ML) costs $89.99 in Pennsylvania; the Kroger in Steubenville offers it for $61.95. One of five higher-end wines was not stocked in the Ohio and West Virginia stores. Another was comparably priced at all locations, but the other three were cheaper in the out-of-state stores. For example, Rodney Strong Cabernet Sauvignon Alexander Valley Reserve cost $20 less in Steubenville than on the LCB website.
LCB officials have long argued that its ability to buy in bulk allows it to get good deals that are passed along to customers.
"Contrary to what many PA consumers believe, your state store prices are quite good on the majority of the items, particularly popular ones," Dominick Cerrone, owner of Good Mansion Wines in Wheeling, W.Va., said in an email. "We tell our customers from PA that regularly."
Stacy Kriedeman, LCB director of external affairs, said the agency conducted a study in 2010 in which it compared prices for its top 50 wines and top 50 spirits with prices in neighboring states. Spirits prices were lower in Delaware, competitive in Maryland and West Virginia, and higher in New York, New Jersey and Virginia. Pennsylvania wine prices did not fare as well -- generally lower than West Virginia and Ohio but higher than both Delaware and New York City.
The Liquor Control Board also released the "PLCB Voluntary Collection of Consumer ZIP Code Data," a report conducted in a "neutral month" -- one without a major holiday -- meant to gauge the geographic distribution of customers. Ms. Kriedeman said it showed that out-of-staters buy liquor in Pennsylvania just as Pennsylvanians buy in other states.
"During our last collection in October 2013, we had sales of approximately $3 million to those living outside of the state."
Cross-border sales don't seem to be much of an issue in Western Pennsylvania, perhaps because there isn't a clear-cut price difference. But in Eastern Pennsylvania, LCB enforcement officers are active on the border with Delaware, a neighbor with no sales tax, where prices are measurably lower. A buyer found to be in possession of out-of-state alcohol could be fined $10 per bottle of beer and $25 per bottle of liquor.
Many who support privatization cite reasons other than price to remove alcohol sales from state control. Some argue that the state is participating in an industry that contributes to health problems, addiction, traffic injuries and fatalities. Others say the state should not interfere with the free market. Many maintain that regardless of price, private stores would offer better selection and customer service.
"We have an opportunity to move Pennsylvania into the 21st century by allowing the private sector to sell wine and spirits," House Majority Leader Mike Turzai said in his privatization plan.
Emma S. Brown: email@example.com or 412-263-3778.
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