Despite recent local media hoopla over looming increases to be tacked onto the price of wine and spirits, the changes will only entail minor readjustments to the handling charges paid by manufacturers to the state.
According to CEO of the Pennsylvania Liquor Control Board Joe Conti, this is the first time the logistics, transportation and merchandising fee, or handling charge, has been changed since it was instituted 17 years ago. Such readjustments will bring in an estimated 50 to 75 million dollars in increased revenue for Pennsylvania, Conti said.
Because the PLCB assessed that the existing charges didn’t fully account for all the shipping, storage and handling of spirits, prices in liquor stores will be increased by 40 cents per item, raising the original $1.20 to $1.60. However, Conti said that when looking at a 750 mL bottle of Smirnoff, which costs about $20, the consumer would hardly notice a price increase.
He explained that price readjustment doesn’t necessarily translate into increase. The handling charges associated with special liquor orders, which make up the wine purchased by restaurants, will actually decrease to a fraction of the original rate, from $1.30 to $0.25. As it turns out, the PLCB primarily deals with wine paperwork, while the physical product hardly passes through its hands at all during its shipping and handling, enabling considerable fee cutbacks.
“The tough part of the issue is that each [spirit] distributor now has to decide if they will raise prices, and if so how much,” Conti said. Each has until Oct. 1 to file new prices with the PLCB, though no one can predict what actions each will take, due to federal law which prohibits their collaboration in consulting one another in setting prices.
As for wine, prices on wine lists may come down “if restaurants want to be fair,” Conti said.
“Basically, this won’t cause any dramatic impact,” he said, citing the fact that he and the PLCB board readjust prices every two weeks based on increases instituted by liquor suppliers themselves. Numerous times per year, liquor companies raise prices on their own accord, causing frequent fluctuation of prices seen in stores.
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