Liquor

HARRISBURG — Despite increased competition from beer and wine sales in grocery and convenience stores, the state’s Liquor Control Board reported its best year in sales ever in 2017-18.

Sales in the most recently completed fiscal year total $2.59 billion, including liquor and sales tax revenue. That was a $67.8 million or 2.7 percent increase over the prior year and previous retail sales record.

The LCB has achieved year-over-year sales growth each year for at least the past two decades.

While grocery and convenience stores have created new competition for the LCB’s wine and spirits stores, they are customers of the LCB’s wholesale operations. The LCB’s 2016-17 annual report noted that at that time, the LCB’s wholesale operations were serving 245 grocery and convenience store locations "whose average weekly orders totaled more than $1.1 million and 11,000 cases.”

The LCB’s 2017-18 annual report has not been released yet.

Net income for the year totaled a record $158.2 million. That was $53.4 million — 50.9 percent — more than the LCB reported in net income in the prior fiscal year.

In addition to generating $517 million sales and liquor tax, the LCB provided another $185.1 million in transfers to the general fund.

Not everyone is impressed by the LCB’s annual financial report though.

Republican gubernatorial candidate Scott Wagner has announced he’d like to privatize the LCB’s wholesale operations as part of his plan to generate new money for schools.

Wednesday, Andrew Romeo, a Wagner spokesman, blasted the LCB for inflating its sales numbers by including the tax revenue. The state would get that tax revenue whether the LCB ran the liquor system or not.

“The PLCB is again showing a final net income below $200 million, yet their sales are $2 billion — this shows how unprofitable our state stores are,” Romeo said.

Elizabeth Brassell, a Liquor Control Board spokeswoman, said the LCB reduced its operating expenses and generated new revenue from auctioning expired liquor licenses.

“We’re improving our way of doing business,” she said.

The 2016 liquor reform law allows the Liquor Control Board to auction up to 50 of the licenses a year. Auction revenue recognized thus far from all previous auctions totals $22.1 million. The LCB is currently accepting bids for 33 expired licenses for an auction in which the winners will be announced on Nov. 1.

In addition to allowing for the expired license auction, when the state moved to make it easier for groceries and convenience stores to sell beer and wine, it also gave the LCB greater freedom to set prices.

John Finnerty reports from the Harrisburg Bureau for The Meadville Tribune and other Pennsylvania newspapers owned by CNHI. Email him at jfinnerty@cnhi.com and follow him on Twitter @cnhipa.

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