PLCB Responds to Global Trade Groups on Pricing, Cites Inaccuracy

We asked the Pennsylvania Liquor Control Board to respond to concerns raised by eight bev/al groups from outside the U.S. that PLCB’s pricing strategies may violate world trade rules.  Here is the response:

“Over the last three years since the PLCB was granted flexible pricing authority by Act 39 of 2016, we have been able to both maintain fair and competitive prices for consumers on a wide selection of products that deliver value, variety and quality, while growing profit and revenue to meet increased funding requests of the PLCB since Act 39 to balance the state budget.

“Our transparency and openness regarding our approach to flexible pricing is demonstrated by the annual reports and public testimony we’ve offered on the matter over the last three years, and we remain committed to productive and collaborative negotiations with suppliers regarding product cost and retail pricing.

“To address one specific inaccuracy in the letter submitted by the coalition, the $80 million increase in income before operating transfers referenced between fiscal years 2014-15 and 2017-18 is not fairly characterized as an “increase in PLCB mark-ups.”  That line on our financials reflects income from all revenue sources, notably including tens of millions of dollars in revenue from license auctions and increased license fees, both of which were also authorized by Act 39.

“While companies represented by alcohol industry groups often focus solely on their bottom line (such is the nature of their business), the PLCB’s top priorities are best serving Pennsylvania consumers of wines and spirits and the broader Pennsylvania population that benefits from the revenues generated by the PLCB.”