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Report gives rare glimpse inside LCB

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Wednesday, Oct. 30, 2013, 12:01 a.m.
 

After a year of intense debate about the future and, at times, the transparency of the state Liquor Control Board, the agency on Tuesday released a rare detailed report.

It's the first time in years that the LCB has put out an annual report, and it's unclear exactly when the last report was put out, according to top LCB officials.

The 56 pages contain explanations about how departments operate and provide sales figures, marketing efforts, regulatory issues, employee demographics and financial statements.

“I don't know whether this answers all of (the questions), but at least it's a beginning of what the LCB does under its current format,” LCB Chairman Joseph “Skip” Brion said. “There was no push from anyone to try to get this done. ... This is a state agency; we should be as transparent as possible.”

It was after Brion testified before state House and Senate committees for budget and privatization hearings that he said he realized not everyone understood how the LCB works. He sees the annual report as a “first draft” that could be expanded or improved.

While the LCB has touted its sales figures and the state programs and agencies that are funded by that revenue, areas such as advertising have rarely been laid out publicly in detail.

Some insight came through a Tribune-Review analysis that found the LCB spent more than $474,600 to place ads for its highly controversial in-house brands, or about 10 percent of its marketing budget last year.

The in-house brands of wine and spirits drew fire from critics who said it was wrong for the public agency, which controls sales of liquor in the state, to compete with the private-sector companies that it regulates.

The in-house brands, including the flagship brand Tableleaf, and the money spent to advertise the products, received no mention in the report.

“I don't know that I would suggest curbing (advertising in-house labels). ... I would advertise other brands we have in our stores, as well,” Brion said.

“I have always, since I've been here, questioned some of the advertising issues,” said Brion, who was named to the board by Gov. Tom Corbett and took his seat in October 2011. “I understand we're a monopoly and we sell alcohol to the citizens of ... Pennsylvania in that monopoly format.”

The report shows the agency bought 20,594 commercials on 45 radio stations as well as 6,181 commercials on 55 TV stations and ran print ads in 12 newspapers statewide. On social media, the LCB reached an estimated 13.7 million people on Twitter, 112,600 people on Facebook and logged more than 4.5 million clicks on its retail website, finewineandgoodspirits.com from July 2012 to June 2013.

One full-color newspaper insert in April that advertised a selection of wines boosted the dollars spent on those wines by nearly 30 percent that week, the report states.

The total spent on advertising isn't included in the report, but spokeswoman Stacy Kriedeman said ad spending totaled about $5.8 million last year, up from about $4.7 million in 2011-12.

Each round of free-standing newspaper inserts costs about $47,100 to produce and buy the ad space, she said.

Even so, Brion said he's come to appreciate the value in driving customers into state stores or getting them to purchase a second or third bottle. He said he'd like to see the agency curb some of its advertising habits, such as buying billboard space on Interstate 95 near Philadelphia, when those leases run out.

“Sharing information is always a good thing,” said Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Bradford Woods, who has pushed legislation to privatize alcohol sales.

“It's good they are back on track to being more open, but regardless, the state should not be in the business of selling fine wine or good spirits,” Miskin said.

Critics say the LCB, which owns and operates 602 liquor stores in Pennsylvania, doesn't need to advertise and that it contradicts its function as the regulator of alcohol by promoting it.

Kari Andren is a staff writer for Trib Total Media. She can be reached at 724-850-2856 or kandren@tribweb.com.

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