Millions Blown in Border Bleed

It’s time for another look at common myths opponents use against getting the government out of the booze businesses. Find more myths debunked here and here.

Myth #5: Shoppers aren’t crossing the borders to buy their booze in other states.

FACT: Pennsylvania loses tens of millions of dollars annually in liquor sales and tax revenue because residents willingly break the law and cross the border to buy alcohol in other states.

A survey conducted for the PLCB showed that 45 percent of residents in Philadelphia and its surrounding counties purchase some or all of their alcohol outside of Pennsylvania. The PLCB’s own numbers showed that consumers purchased approximately a quarter of their wine and spirits in other states. This border bleed equals more than $180 million in lost sales, and more than $40 million in lost state tax revenue annually from just a handful of counties.

And the PLCB isn’t the only group admitting that border bleed exists in Pennsylvania. The Public Financial Management (PFM) report highlights other similar findings:

  • A 2010 study commissioned by the Wine and Spirits Wholesalers of America found that 23.6 percent of the wine purchased by consumers in Pennsylvania comes from out of state, resulting in the loss of $17.3 million in excise taxes.
  • A 2011 analysis by the Distilled Spirits Council of the United States (DISCUS) estimated that cross border purchases by Pennsylvania residents total over 900,000 cases of spirits and over two million cases of wine, about 16.5 percent of total sales representing approximately $313 million in retail revenue.
  • A 2004 study prepared for the Pennsylvania Food Merchants Association determined that 29.4 percent of the Commonwealth’s consumption of wine comes from cross border sales, as well as 20.8 percent of distilled spirits.

Ending the government monopoly will generate more revenue in Pennsylvania by ending the need for residents to bootleg wine and spirits across state lines to get the price and selection they want.

The Pennsylvania House already voted to end the state government’s Prohibition-era liquor system, by passing HB 790. The next step to bringing the state’s liquor laws into the 21st century lies in the Senate, which will need to approve the legislation.

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