Pa. audit says overhaul costly wine kiosks or scrap them

Posted: August 31, 2011

HARRISBURG - The Pennsylvania Liquor Control Board's oft-criticized wine kiosks have cost taxpayers more than $1 million and should be scrapped unless dramatic improvements are made, according an audit by state Auditor General Jack Wagner.

"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 Tuesday at a news conference in the Capitol.

The audit found that wine-dispensing machines 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 32 kiosks than it took in, resulting in an operating shortfall of about $1.1 million, Wagner said.

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

Joe Conti, the Liquor Control Board's chief executive officer, said Tuesday that he thought Wagner's audit was "very fair and very balanced," and added that he agreed with the bottom-line finding that the kiosk program needed to change or be put on the chopping block.

"We will see what happens, but it's certainly a troubled program at this point," he said.

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, which stock more than four dozen varieties of wine, were brought back online. But consumer confidence had lagged, along with sales in some of the locations.

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 was host to 10 of the kiosks; those 10 included stores in Warrington, Downingtown, and Easton.

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


Contact Inquirer staff writer Angela Couloumbis at 717-787-5934, acouloumbis@phillynews.com, or @AngelasInk on Twitter.

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