HARRISBURG - The state Liquor Control Board has cut service at unprofitable liquor stores in rural and population-losing areas to stem a flow of red ink - a development not lost on those debating the privatization of the state liquor monopoly.
The agency scaled back operations at 47 stores across Pennsylvania that lost money in fiscal 2009-10 to realize a combined savings of nearly $10 million, said chief executive officer Joe Conti.
Overall, the LCB generated total sales of $1.5 billion at its 650 retail stores in fiscal 2009-10, a 3.6 increase from the previous year.
The result of the cutback is that some unprofitable stores are open just three days a week while others have more limited hours.
Seven of these stores are in Northeast Pennsylvania: Forest City in Susquehanna County; Canton in Bradford County; Dushore in Sullivan County; Mount Carmel in Northumberland County; and Mahanoy City, Frackville, and Ashland, all in Schuylkill County.
Store financial losses in 2009-10 respectively were Forest City $2,200; Canton $2,000; Dushore $2,700; Mount Carmel $2,100; Mahanoy City $62,000; Frackville $23,000; Ashland $15,000, according to the LCB.
When looking at ways to pare losses at the targeted Northeast stores, the LCB decided in the majority of cases to keep them open for three days a week from 11:30 a.m. to 6 p.m. That's the situation for the stores in Forest City, Canton, Mahanoy City, Frackville and Ashland.
The store in Mount Carmel is now open six days a week from 11:30 a.m. to 6 p.m.
There's been no changes in hours at the store in Dushore, however. The nearest LCB store is 18 miles away. Officials are trying to avoid situations where customers would have to drive more than 10 miles to purchase wine or liquor.
By these changes, the LCB is attempting to balance normal business practices with a policy going back decades to provide service to customers across Pennsylvania, regardless of whether they live in a sparsely populated area or not.
"It's normal business to try to consolidate stores," said Conti.
In many cases, the unprofitable stores had a smaller amount of floor space than newer stores and are not situated in a desired marketing area, he added.
When cutting back store operations, the LCB has looked for opportunities to juggle the three-day workweek so that the same employees could rotate duty among stores within proximity of each other.
That's the case in Mahanoy City, Frackville and Ashland where each store is open three staggered days built around the weekend, said Conti.
The LCB initially considered closing those three stores, but then opted to reduce the days after consulting last year with Schuylkill County lawmakers, said Rep. Neal Goodman, D-123, Mahanoy City.
Supporters and opponents of privatization strongly disagree about whether a free-market system would provide better service to rural areas.
Gov. Tom Corbett said recently he hopes legislation to dismantle the nearly eight-decade-old liquor sales monopoly can be enacted this year. He has said the state shouldn't be in the liquor-selling business.
"The vast majority of our 47 money-losing stores would not exist in a privatized environment," said Conti.
Furthermore, he said even the unprofitable stores have a larger selection of items than would be found in a private liquor store in a rural area in a state like West Virginia.
The sponsor of the main privatization bill, House Majority Leader Mike Turzai, R-28, Pittsburgh, doesn't accept that argument.
"I think in the private sector where there is a demand you will see the demand being met," he said.
Turzai introduced a bill last session to auction off 750 retail licenses and 100 wholesale distribution licenses, but he said those numbers could change with a new bill version depending upon the results of a privatization study being done by the Corbett administration.
Goodman is skeptical that private owners would bid large sums for stores in rural areas.
"My gut feeling, I'm not going to have eight to 10 stores (in Schuylkill County) under the private system," he said.
However, a policy analyst for the Harrisburg-based Commonwealth Foundation which supports privatization said it's ridiculous to think private stores wouldn't appear in rural areas.
Pennsylvania would need about 3,000 liquor stores - five times the current number - to be in line with other states when looking at liquor stores on a per capita basis, said Nathan Benefield, the foundation's director of policy research.
He said the only reason the 47 stores are unprofitable is that they are incompetently managed by a state monopoly.
Contact the writer: rswift@timesshamrock.com