Feb. 26, 2015

HARRISBURG-- Rep Warren Kampf (R-Chester/Montgomery) joined his colleagues in passing legislation, for the second session in a row, to end the state monopoly on liquor sales by privatizing the state liquor store system.

“It is imperative at this time that Pennsylvania finally join 48 other states in giving its residents the convenience of purchasing wine and spirits in the private sector,” Kampf said. “In addition to the obvious arguments against a state-owned liquor system – for example promoting the sale of alcohol while also policing it - the fiscal challenges of the state government, including massive funding needs to meet public pension contributions and increased Medicaid contributions, are so severe that the sale of a public asset of this size is critical to the future of our state.”

The PLCB has recently produced financial documents that demonstrate in a few short years it will operate at a loss. This is incredible given the demand has remained steady and revenue continues to increase year over year. It is also good reason that the value of this asset needs to be realized now by sale.

“Taxpayers shouldn’t have to subsidize the LCB, and that is where we are headed, and of course consumers deserve convenience,” Kampf said. “The plan will give consumers improved selection and apply market pressures that make the wholesale sector more efficient and effective. Government should devote its energies to enforcement, compliance and education, instead of selling alcohol.”

House Bill 466 would privatize the wine and spirits system by creating 1,200 wine and spirits licenses with the possibility of 600 additional licenses being issued after all state stores close. The bill would allow supermarkets to sell wine. Spirits would be sold at private wine and spirit stores, or in combination with beer at beer distributors.

Liquor privatization would likely generate at least $1.1 billion in upfront revenues, $600 million in wholesale licenses, $440 million in retail licenses, and $137 million in grocery licenses.

“This bill would also likely dramatically reduce the millions of dollars in liquor sales that escape to neighboring states,” Kampf said.

The bill would reduce what is known as “border bleed” as fewer consumers would travel across state lines to buy wine and liquor. Out-of-state purchases account for $313 million in losses from retail revenue to Pennsylvania.

“With fewer Pennsylvanians going out of state to buy wine and spirits, and the increased competition from private stores, consumers will see better prices and increased selection,” Kampf said. “Corporate and individual income taxes, which are not paid by the current state system, would also come in from the private entities and individuals owning the new licenses.”

The bill now moves on to the Senate.

Representative Warren Kampf
157th District
Pennsylvania House of Representatives

Media Contact: David Foster
RepKampf.com / Facebook.com/RepKampf