Pennsylvania House committee backs bill to end flexible pricing in state-run liquor stores

By a party-line vote, a bill that would end the Pennsylvania Liquor Control Board’s ability to set prices based on its own passed a state House committee Thursday.

House Bill 1512, sponsored by state Rep. Jesse Topper, R-Bedford, now proceeds to the House floor after a 15-10 vote in the House Liquor Control Committee.

Topper’s bill comes three years after the lawmakers and the Wolf Administration approved a plan to allow the board, which operates packaged liquor stores in the state, to set its own prices for wines, whiskeys and other spirits. Prior to that, the PLCB could only markup prices by a set percentage across the board.

The new pricing structure has allowed the PLCB to generate a significant amount of new revenue for the state’s general fund while working to lower some prices. However, some critics have questioned whether consumers are being unfairly taxed by a non-elected board that has a monopoly on many alcoholic products.

PLCB manages more than 600 Fine Wine & Good Spirits stores across the state. Pennsylvania is one of 13 states in the country that controls retail sales for personal, off-site consumption.

“The aim of my bill is to fix this issue by repealing the flexible pricing provision and reinstitute consumer price protections,” Topper said.

Not surprisingly, Topper’s bill has the support of producers, who have also criticized PLCB and claimed the state changes prices with little or no notice to companies.

“Allowing the PLCB to set prices based on secret internal formulas is difficult for producers, but the group that is harmed the most are the citizens of the commonwealth,” said Matt Dogali, the president and CEO of the American Distilled Spirits Association. “We want to thank Chairman (Jeff) Pyle, Representative Topper and committee members for recognizing there is a problem with flexible pricing. Passing HB 1512 is the first step in fixing this problem and returning to a fair system that protects the consumer from hidden price increases on their favorite distilled spirits.”

Topper’s bill does have some opposition. In testimony during a committee hearing on the bill last week, Wendell Young IV, the president of United Food and Commercial Workers Local 1776, said flexible pricing gives the PLCB the ability to negotiate a lower wholesale price, just like a private sector business.

The union represents more than 3,500 retail workers at the PLCB stores.

“Instead of repealing the flexible pricing policy, we should be looking for ways to strengthen it to help Pennsylvania acquire the very best pricing from suppliers while delivering significant amounts of additional revenue for our Commonwealth,” Young said.