A rum deal for Pennsylvania

The state-run Liquor Control Board of Pennsylvania acts as distributor and retailer for alcohol in the state. The monopoly claims that bulk buying keeps the final price to the consumer low. Last month our Senior Visiting Philadelphia Wine Consumer reported his disappointment with the prices in Pennsylvania despite the promotional materials.

Thanks to an article yesterday on the state’s difficult decisions in this post-5/16 era (oh yeah, that was the date of the recent Supreme Court case on direct wine shipments), we now have a better understanding of why. Consider these markups:

Currently, if a case of wine costs the LCB $100, there is the standard 30 percent markup plus a $10.80 per case “bottle handling” change, plus the 18 percent flood tax (enacted in 1936 and never repealed), plus a “rounding up” feature (to the nearest 99 cents) plus the 6 percent sales tax (or 7 percent in Allegheny and Philadelphia counties).

That brings the $100 case of wine to $166.42, which makes it hard for restaurants to add a profit margin to a glass of wine and keep it affordable to customers, he said.

Yikes. They were doing great with the 30% markup, which is low for the industry but the per case tax and the flood tax (?!) certainly are sobering. But with $200 million in revenue from the flood tax alone, any efforts at repeal are likely to meet with stiff resistance–if not a stiff drink.

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