LCB asks to 'modernize' with more Sunday sales, pricing leeway

Posted: April 14, 2011

HARRISBURG - Staring down the threat of privatization, the Pennsylvania Liquor Control Board's top official implored a panel of legislators Wednesday to give him the ability to "modernize" the agency to become more profitable and customer-friendly.

Joe Conti, the agency's chief executive officer, told members of the Senate Law and Justice Committee that the LCB wanted the legislature to give it more flexibility in pricing and hiring, let it open more stores on Sundays - as well as keep them open later - and allow Pennsylvanians to finally have wine shipped directly to their homes.

Those changes and others, Conti testified during the committee's hearing, would let the LCB get products to customers at better prices and boost the agency's bottom line - which in turn would increase the money it kicked in annually to state coffers.

"We are in the middle of a real phase of modernization," he said. "These initiatives are the final initiatives we need to get where we'd like to be three to five years from now."

His remarks came the same week that a preliminary report by a federal Centers for Disease Control (CDC) task force recommended against further privatization of alcohol sales. The task force, whose findings were promptly touted by LCB aides and allies, said evidence showed that privatization led to increased per-capita alcohol consumption.

Conti, himself a former legislator, did not reference the preliminary report in his remarks to the Senate panel. Also left largely unsaid Wednesday was the LCB's hope that its push for changes could help stave off efforts by the Corbett administration and some top Republicans in the legislature to help plug a $4 billion deficit by selling off the state's 615 liquor stores.

Whether legislators come through for the much-maligned LCB remains a big question mark. Senators on Wednesday seemed receptive to some of the initiatives but stopped short of endorsing anything outright.

And historically, tinkering with the liquor code has been a process fraught with difficulty.

At the moment, there is no working bill to privatize the LCB - though House Majority Leader Mike Turzai (R., Allegheny) said this week there could be one as early as this summer. "Who honestly thinks we in state government should be in the sale of wine and spirits?" Turzai asked Monday during a debate on privatization.

Among the changes the LCB is seeking is how it prices wine and liquor. The board now is required to slap 30-percent markups on all products on its shelves. LCB officials want to be able to vary this - for example, by marking up wines by 20 percent and some hard liquors by 40.

They also want lawmakers to let them create so-called "loyalty clubs," to offer customers discounts.

And they want legislators to let them make new hires outside civil service - as well as set their wages. Conti stressed that this would not disturb collective-bargaining agreements.

Also on the LCB wish list: expanded hours for stores open on Sundays. Now, they close at 5 p.m.; the agency wants to stretch that to 7 or 8.

It also wants more stores to open on Sundays (only 25 percent, or roughly 160 stores, do so now). This step alone, Conti said Wednesday, would bring a multimillion-dollar increase in yearly sales.

And in its effort to run more like a business and give customers more choice, the board wants legislators to address at last the issue of direct shipments to customers from out-of-state wineries.

For years, Pennsylvania has dragged its feet on complying with a U.S. Supreme Court decision saying such shipments are legal. The state bars most out-of-state wineries from shipping directly to residents, but it lets small in-state wineries do so.


Contact staff writer Angela Couloumbis at 717-787-5934 or acouloumbis@phillynews.com.

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