On April 1, 2008, the Senate Law and Justice Committee endorsed legislation, Senate Bill 1226, that would increase the licensee discount from 10% to 16% for all purchases at state stores. This proposal is a major legislative priority for the PA Tourism & Lodging Association.
There was a time when the PA Liquor Control Board (PLCB) recognized the need to provide a reasonable discount to licensees as a reward for the high volume of business they conducted on the wholesale level with the State. The original discount awarded to licensees was as high as 16.67% in the 1980s. However, over time this discount was continually reduced by the PLCB. In 1980, the discount was reduced to 12.5%, and rate was again reduced to 7% in 1988.
In recent years, PTLA has successfully lobbied the General Assembly to continue to recognize licensees for their volume purchasing by gradually increasing the wholesale discount to its original level of 16.67%. In June 2005, the Legislature passed legislation supported by PTLA that increased the discount by 3% from 7% to 10%.
The PLCB is generating record profits today, driven in part by the significant wholesale purchases of Pennsylvania's licensees. PTLA believes this is an appropriate time to restore the discount to its original level.
The Rendell Administration has expressed concern about SB 1226 because the PLCB has estimated a 6% discount increase will result in a revenue loss of approximately $25 million to the State.
