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December 4, 2012 | By | Posted in General News

WATCHBLOG: Liquor Control Board using tax dollars to advertise their own brands

By Eric Boehm | PA Independent

HARRISBURG – The Pennsylvania Liquor Control Board, the Prohibition-era hangover that maintains a monopoly on wine and liquor sales in the state, spent more than $4.72 million on advertising during the last fiscal year.

The total includes more than $474,600 for the promotion of the PLCB’s own private brands of wine and spirits, which compete with private sector brands for space on the state-owned liquor store shelves and get a boost from advertising paid for by taxpayers, according to documents obtained by the Pittsburgh Tribune-Review.

Here’s the rest of the details, which the Trib published over the weekend.

The LCB spent nearly a half-million dollars last fiscal year, about 10 percent of its advertising budget, to promote five of its own private-label brands — TableLeaf, Dialed In, LA MERIKA, Hayes Valley and Las Parcelas, records show. No money was spent on two other wine brands, Zita and Vinestone, or Copper Sun vodka.

Even though (PLCB CEO Joe) Conti said he was “99 percent sure” no LCB money was spent to promote or develop the brands, ads placed by his agency for its in-house products appeared in high-profile, hard-to-miss locations in newspapers and magazines, on billboards, public transit vehicles in Pittsburgh and Philadelphia, radio shows and the Internet radio service Pandora, as well as in online sponsorships, records show.

It’s the latest in a run of public relations disasters for the PLCB, which has been targeted by some Republican lawmakers and Gov. Tom Corbett for privatization next year (though plenty of other attempts to rid the state of the liquor monopoly have failed over the years).

The controversial “wine vending machines” the board installed in a few dozen grocery stores around the state were a flop with customers and accountants – and were pulled from the stores about a month after Conti defended them in front of a legislative panel last summer. It was later revealed that the contract for the machines was signed despite internal assessments that warned they would be a bad investment and without independent research on sales estimates.

Financial records show the PLCB is less profitable than the state claims, but the board voted earlier this year to raise the price of many brands on its shelves.

And now the state Ethics Commission is investigating the board, which may or may not have led to the abrupt resignation of former board chairman Patrick Stapleton in October.

Contact Boehm at Eric@PAIndependent.com and follow @PAIndependent on Twitter.

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Eric Boehm is a reporter for PA Independent. He can be reached at Eric@PAIndependent.com or at (717) 350-0963.

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