Decision comes after spirits industry letter highlighting negative impact of price increases on consumers and businesses
Several spirits suppliers were notified yesterday that the Pennsylvania Liquor Control Board (PLCB) is no longer seeking to increases prices in August as previously outlined in an early March correspondence to suppliers.
This change of course follows a joint letter sent from the Distilled Spirits Council of the United States (DISCUS) and American Distilled Spirits Alliance (ADSA), which outlined the compounding impacts increased prices would have on consumers and businesses that are already struggling to cope with the fallout from COVID-19.
“We are thankful the PLCB heard our concerns and came to the realization that now is not the time to increase spirits and wine prices on consumers and businesses,” said Chris Swonger, president and CEO of DISCUS. “The decision to halt price increases was the right action to take, and we appreciate the PLCB’s careful consideration on this matter.”
“ADSA members appreciate the PLCB’s decision to reverse course and not raise prices during this unprecedented time,” said Matt Dogali, president of ADSA. “This was clearly the right decision and highlights one of the many problems with flexible pricing. For now, we are thankful, but we hope in the coming months we can finally address the problems that flexible pricing has created, including these arbitrary price increases.”
In April, an independent analysis of data found that the PLCB had increased its markup on spirits by an average of 9.8 percent since flexible pricing became law under Act 39 in 2016, creating higher prices for Pennsylvania consumers.
The analysis, created by Pennsylvania company, S.E. Koontz Software, Inc., found that consumers paid an average of 7.6 percent more for spirits since the implementation of flexible pricing. Similarly, the markup on the largest wine brands increased by 14 percent, with consumers paying an average of 10.3 percent more for those wines.
The increases in shelf prices for consumers for both wine and spirits in Pennsylvania occurred even though spirits prices have gone down, and wine prices have increased by less than 1 percent in the same time frame nationally.
S.E. Koontz Software, Inc. was engaged by DISCUS, ADSA and the Wine Institute to investigate what impact variable markup pricing has had on consumer prices.
The full report can be found here.