The business of alcohol

The state Liquor Control Board reported a hike in sales during the pandemic. (Photo courtesy of the Herald-Standard)

A toast to the state Liquor Control Board for its record-breaking performance.

The LCB reported that unaudited sales totaled $2.91 billion for fiscal year 2020-21, which ended June 30. That was $349.4 million, or 13.7%, more than FY 2019-20.

Sales for the most recent fiscal year also were $238.5 million, or 8.9% higher, than the LCB’s previous record of $2.67 billion in fiscal year 2018-19.

Net income for 2020-21 totaled $264.9 million – $56.1 million, or 26.9% higher than, 2019-20. That jump was attributed to higher gross profits from sales, which were offset by higher operating expenses, license fees and other revenue sources.

Shawn Kelly, spokesman for the independent government agency, has a viable explanation for the falloff in FY 2019-20 and the record-setting upswing a year later at the estimated 600 Fine Wines and Good Spirits stores across the commonwealth.

“Stores closed for several months in the early days of the pandemic,” he said, referring to the second quarter of 2020. “We closed our e-commerce center and e-ordering until we got a grasp on COVID, and that slowed what was a record pace. “We instituted curbside pickup before we reopened when (counties entered the green phase of operations).

“That affected our fiscal year of 2019-20, why sales decreased for the first time in years and years. We were able to keep stores open the entire (fiscal year) in 2020-21. That explains some of the growth.”

Store closures weren’t the only factor, Kelly added. “Sales to licensees are included. Not only did retail stores close, but bars and restaurants were not buying as much wine and spirits.”

That is past, and Kelly, speaking from Harrisburg, said the wine and spirits operations have regained their equilibrium and “returned to more normal operations. That’s part of growth we’re seeing.”

A total of $813.4 million in contributions from the sales will go to state and local governments and other beneficiaries. And $764.8 million is earmarked for the General Fund, for schools, health and human services programs, law enforcement, public safety initiatives and other services.

Word of the record-setting effort came less than a week after the LCB established a two-bottles-per-day purchase limit on 43 items to in-store customers, bars, restaurants and other license holders.

“Why did this happen? It could be a variety of things,” Kelly said. “Vendors can’t get glass, manpower issues, not enough resources to bottle or ship. In some instances, there are transportation issues.”

“We’re talking about a small portion of our catalog, though.”

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