LCB approves a price increase, the first in 18 months

HARRISBURG - For the first time in more than 18 months, the state Liquor Control Board has approved an increase in prices on more than 300 wines and liquor brands.

At its semimonthly meeting Wednesday, LCB officials were unanimous in voting for the price hikes, requested by vendors of the alcoholic beverages in the face of increasing transportation and other costs associated with putting liquor on retail shelves.

For the last year and a half, the three-member board has been rejecting price-increase requests, given the bad economy.

"We have done our best to hold down prices," said board member Patrick J. Stapleton III, who called the increase "a necessary thing to do" to continue providing the best selection for consumers.

Newly minted Board Chairman Joseph E. "Skip" Brion, appointed in the fall by Gov. Corbett, said he struggled with the idea of raising prices, but ultimately wanted to avoid a scenario where vendors began pulling out of Pennsylvania.

"Our job is to work with the consumer . . . and make sure the consumer has enough product to choose from," he said.

The price increases are mostly in the $1 and $2 range, but go as low as 50 cents and as high as $5. They take effect in February.

Generally, vendors can come to the LCB four times a year asking permission to raise prices.

But in late 2010, the LCB put a moratorium of sorts on such increases as the state - and the country - grappled with the recession.

Before 2010, the board often received price-hike requests, many of which it approved. So can consumers can expect more price increases three months from now?

Not necessarily, said Brion. "We will take it on a quarterly by quarterly basis, and examine the economics and examine the business realities we face."

Agency officials noted Wednesday that even after raising prices on alcoholic beverages, vendors can - and often do - provide discounts to keep customers happy.

The increases could bring some relief for state coffers, generating a $5 million annual return.

About $3 million of that would be profit, the rest taxes.

The price increases come against the backdrop of an attempt by a number of high-profile Republicans to privatize the LCB.

Jay Ostrich, spokesman for the libertarian Commonwealth Foundation in Harrisburg, called the price hikes "the latest example of a tone-deaf, out-of-control government agency that could care less who is picking up the tab."

The move to auction off the wine and liquor stores has been championed by Corbett and House Majority Leader Mike Turzai (R., Allegheny). It has pushed the agency to work on its image and to lobby for modernizing laws that date back to the end of Prohibition.

Recently, the LCB quietly rolled out a pilot program allowing customers to select from a limited list of products and, for a fee, have them shipped to their homes.

Before, customers could only have liquor shipped to a nearby State Store for pickup.

Over the last few years, the agency has also made an effort to spiff up stores, increase selection, and open higher-end retail locations.

The agency is also seeking legislative changes, including more flexibility in pricing and hiring, and letting stores stay open later on Sundays.