Pa. Liquor Control Board profits climb thanks to new pricing power

The Pennsylvania Liquor Control Board's operating profit climbed 39 percent in the year ended June 30, as the agency benefited from its new ability to negotiate prices with suppliers and to raise prices on consumers beyond limits that were in place until 2016.

While the PLCB's sales net of taxes climbed just 2.7 percent, to $2.07 billion, its gross margin — the difference between the prices it gets and what it pays suppliers — was up 5.8 percent, the agency said Wednesday. Along with higher revenues from the sale of expired liquor licenses and a gain from a health insurance settlement, the gross margin improvement boosted operating profits to $138.1 million from $99.32 million.

The gross margin of 31.84 percent was the highest its been since 2009.

PLCB's absolute bottom line, however, remained in the red after the agency wrote a $185.1 million check to the state's general fund. The $29.35 million loss in fiscal 2018 was significantly smaller than the $114.3 million loss the previous year, when the PLCB turned over $219.2 million to general fund.