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Liquor Control Board ads remain contentious issue

| Monday, Feb. 3, 2014, 12:01 a.m.

To government watchdogs, not all public dollars shelled out for advertising are created equal.

When the state spent $5.8 million to promote Pennsylvania tourism last year, it met with barely a whisper from lawmakers.

But when it was revealed the state Liquor Control Board spent that amount to tout its wines and spirits, critics howled.

Now a Cumberland County lawmaker wants a disclaimer on LCB ads.

“I find the PLCB ads to be particularly troublesome, because if you see them when they come on TV ... it just says ‘Fine Wine and Good Spirits,' ” said state Rep. Stephen Bloom, R-Carlisle. “It doesn't say ‘Pennsylvania state government.' For me, that's a particularly troubling instance of Pennsylvania taxpayers probably not realizing they paid for that ad.”

The LCB, however, said its customers pay for the advertising through liquor sales.

The LCB and its supporters say advertising products sold in its more than 600 stores — it posted sales topping $2 billion — is good business.

“We are competing for people's limited discretionary income with other retailers,” said LCB spokeswoman Stacy Kriedeman.

A 30-second television commercial that aired last spring touted Chairman's Selection wines, highly rated but limited quantity wines sold at deep discounts.

“Choosing wine can be confusing,” the male voice-over said as bottles of wine slid into view. “Relax. Choose a Chairman's Selection wine from PA Wine and Spirits stores.”

A print ad that ran in newspapers was headlined “Wine Without the Worry” and pictured four Chairman's Selection wines, their prices and a smartphone-scannable code for more details.

Records show the LCB spent $620,944 buying airtime for TV advertising and $606,886 in magazines and newspapers in 2012-13. Digital billboards and signs cost $135,000. The figures don't include commission and creative development fees paid to Bala Cynwyd-based Harmelin Media.

For Republicans who want to turn the LCB's operations over to private industry, advertising to promote alcohol sales shows the agency's inherent conflict of interest with regulating sales and educating consumers, said Steve Miskin, spokesman for Majority Leader Mike Turzai, R-Bradford Woods.

That conflict does not exist in other state agencies, Miskin said.

State-store revenue pays for LCB advertising, liquor law enforcement and drug and alcohol programs. The money also funds educational programs, some aimed at young people, who critics say might be negatively influenced by LCB ads.

And the agency makes annual lump-sum payments to the state's general fund, which amounted to $80 million last year.

Pennsylvania and Utah are the only states that monopolize the wholesale and retail sales of wines and spirits.

Vickie Ashby, spokeswoman for the Utah Department of Alcoholic Beverage Control, said the agency does not advertise because state law bars it from promoting alcohol consumption.

Wine and liquor sales in Utah, where the majority of residents are Mormon and generally don't drink alcohol, generated about $346.8 million in 2012-13.

“It's really perverse, advertising to promote drinking and gambling,” said Nathan Benefield, director of policy analysis for the conservative Harrisburg-based Commonwealth Foundation. “Government shouldn't be in these kind of businesses in the first place.”

Ads that promote the state's lottery have not received as much criticism.

Records show the state Department of Revenue spends more than six times as much as the LCB to advertise the lottery, posting about $36 million in ad spending for the 2012-13 fiscal year. That includes more than $2.6 million in commissions to the Pittsburgh-based ad agency MARC USA.

Lottery ads tout instant games, multistate jackpots and senior programs funded by proceeds.

State Rep. Joseph Markosek, D-Monroeville, says the state is in the business of selling alcohol and lottery tickets, so it has to do what's necessary for profitability.

“We need to act like a business when it comes to some of the techniques businesses use to increase their profits, i.e., advertising,” he said.

But Bloom makes a distinction between LCB and lottery advertising. He said lottery ads say “Pennsylvania” and feature the keystone-shaped logo, leaving little doubt about who paid for them.

Lottery records show that in 2012-13, the agency spent about $4.3 million on TV commercials promoting jackpots and instant lottery games and about $2.6 million extolling the benefits of the senior programs paid for by lottery sales. Nearly $6 million went to ads on billboards and bus shelters.

Those figures do not include commission or production costs.

Fans at Pittsburgh Steelers or Philadelphia Eagles games might notice a bright yellow sign that says “Play to Win!” with logos of eight games, including Mega Millions and Cash 5, atop the Pennsylvania Lottery logo. The lottery spent about $5.6 million on sponsorships such as signs and program ads at community and sporting events.

Advertising spending “is a fraction of sales, a fraction of profits for senior programs,” said Elizabeth Brassell, spokeswoman for the Revenue Department. “We believe it's an invaluable tool to get to that sales and profit.”

Beyond products, state agencies spend public money to advertise public benefit programs, voter referendums and state laws.

“You can't live in a bubble. You have to advertise and promote,” said Audrey Guskey, associate professor of marketing at Duquesne University. “You have to stay in the face of consumers. It's part of who we are as a society. It's part of being successful as a business.”

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

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