PA Monopoly Markups on Booze Violate International Law

Privatize liquor sales, PA! ….Privatize!!!

source: The Center Square

A consortium of international trade associations representing their countries’ wine and spirits producers is pushing Pennsylvania Gov. Tom Wolf to consider changes to the pricing model the state’s liquor regulatory board has put in place.

The trade groups, in a letter to the governor, claim the Pennsylvania Liquor Control Board’s practice of flexible pricing runs counter to international trade law, which they say requires the board to apply the same markup it applies on the lowest marked-up American spirit.

The state is one of 13 in the U.S. where the government manages retail package sales.

“To be entirely clear, we do not question the right of Pennsylvania to establish a monopoly importer, distributor and/or retailer of wine or spirits for the state……….. However, as a statutory monopoly, we would suggest the PLCB does have certain obligations pursuant to its preferential market position. In addition, the PLCB fits squarely under the definition of a state trading enterprise (STE) under international trade rules.”

Wine and Liquor Trade Groups
Letter to PLCB

The letter was signed by the leaders of Spirits Canada, Spirits New Zealand Inc., SpiritsEUROPE, Australian Grape & Wine Inc., Scotch Whisky Association, Great Britain’s Wine & Spirits Trade Association, global public policy body FIVS and CEEV, the European Union’s trade association for wines. It also comes at a time when some lawmakers in Harrisburg are pushing for a change back to the old policy.

Three years ago, the Pennsylvania General Assembly passed a law allowing the PLCB to switch from using a standard formula to set prices for bottles of whiskeys, wines and liquors to a variable pricing model that takes into account market factors. That’s allowed the board to set a price for premium spirits, such as Pappy Van Winkle bourbons, that’s comparable to the price set by retailers elsewhere.

In 2016, under the old pricing format, the PLCB transferred $100 million into the state’s general fund in addition to the state and local taxes generated by the sales. In 2017, under the new format, the board transferred $216.7 million.

T Trade groups: Pennsylvania’s state monopoly markups on wine, spirits violate international law

Calamity Jane