Source: Pocono Record
By ERIC BOEHM
May 09, 2011
A new pricing policy implemented by the Pennsylvania Liquor Control Board could force you to pay a little extra for your next bottle of Pinot Noir or Cabernet Sauvignon. Restaurants and wine producers are criticizing the new policy, which changes the way the state assesses the so-called “bottle handling fee.”
It’s one of four different taxes applied by the state to alcohol. The new plan will do away with the old system, in which the fee was assessed at a fixed rate depending on the size of the bottle of wine or alcohol, and will use a percentage-based system instead. For instance, if the handling fee of a $10 bottle of liquor is $1, the fee would be 10 percent, or $1. If the cost of the liquor increases to $11, the 20 percent fee would be $1.10.
The new policies will take effect in August.
David Wojnar, vice president of the Distilled Spirits Council of the United States, said the need for the increase was not made clear and the state board did not consult suppliers before implementing the new policy. He said the rate now also is disproportionate to what other states with private liquor stores require. “The fact remains that for a typical 750 (milliliter) bottle of distilled spirits, the $1.20 fee currently assessed is at least double the comparable handling costs incurred by private sector wholesalers,” Wojnar told the Senate Law and Justice Committee.
Increased costs for producers and suppliers will ultimately result in higher costs for consumers, said Terri Cofer Beirne, eastern counsel for the Wine Institute, a political advocacy group representing California wine producers. “When we’re faced with increased local taxes and fees, we have to respond and pass the cost onto consumers, unfortunately,” Beirne said.
Joe Conti, chief executive officer of the PLCB, told the committee he was “somewhat mystified” by the concerns because the board did not view their actions as a direct price increase. “(The prices) are the same. Our board did not raise prices. We converted from the dollar fee that has been in place for 19 years and we replaced it with a percentage,” Conti said.