Audit: Wine kiosks cost taxpayers $1 million

HARRISBURG - Auditor General Jack Wagner on Tuesday released an audit of the Pennsylvania Liquor Control Board's oft-criticized wine kiosks, saying they have cost taxpayers more than $1 million and concluding that if radical changes aren't made to them, they should be scrapped.

"We think the wine kiosk program has failed, and it needs dramatic, radical changes if the program is going to continue to exist," Wagner said at a press conference in the Capitol this afternoon.

The audit found that wine kiosks fell short in large part because of numerous mechanical problems late last year that, in an embarrassing move, forced the LCB to shut them down for a month.

Beyond that, the audit also found that the machines never lived up to the goal of making it more convenient for customers to buy wine, nor did they deliver on the promise of making money for the LCB and state government.

As of this summer, the LCB has spent more to operate the kiosks than it took in, resulting in an operating shortfall of about $1.1 million, Wagner said.

The LCB is currently locked in a nasty legal dispute with the Conshohocken-based contractor that provided the kiosks, leading to the very real - and very likely - possibility that the kiosk program will end.

Since the kiosks were placed last year in supermarkets across the state, there have been problems.

On the consumer end, it took time for shoppers to get used to buying wine from a machine - one that required them to show ID and take a breath test.

Then, there were the myriad mechanical problems that forced the LCB to abruptly shut the kiosks down last year right before the winter holidays. That shutdown prompted Wagner's audit.

The machines were brought back online, but consumer confidence has lagged, along with sales in some spots. And over the summer, in a major blow to the LCB, Wegmans pulled out of the program. The supermarket chain said the machines often malfunctioned, leading to a significant number of customer complaints. Wegmans had hosted 10 of the 32 wine kiosks statewide; those 10 included stores in Warrington, Downingtown, and Easton.

Wal-Mart also announced recently it was abandoning plans to install kiosks in its stores.