Pennsylvania is losing an estimated $3.5 million in revenue annually from state residents crossing into West Virginia to buy their alcohol.
A report released earlier this year measured the revenue impacts of cross-border wine and spirits shopping in West Virginia. The study estimated West Virginia gained $3.5 million in revenue just from Pennsylvania shoppers. The study found the state benefited from Pennsylvania and Virginia shoppers, but lost revenue to Kentucky, Ohio, and Maryland borders.
The report concluded,
…cross-border shopping for wine and liquor are significant determinants of sales. Wine and liquor tax rate differentials encourage some consumers living on the border to save money by traveling across a state border to purchase alcohol.
As this study found, “border bleed” can be a significant amount of revenue lost or gained. Dismantling the state-run monopoly and allowing private businesses to sell wine and spirit in a competitive market would help capture some of the revenue lost to border bleed.