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Wine Boutiques are Latest Effort to Stall Liquor Store Privatization

Last year, the Pennsylvania Liquor Control Board (PLCB) initiated a program that established “wine boutiques.” These boutiques allow a small PLCB-controlled liquor store to sell wine in conjunction with a restaurant that does not serve alcohol. The wine selections are created to compliment the restaurant’s menu. Garces Trading Company, a restaurant in Philadelphia, operates with the first state wine boutique. A group of restaurant owners, calling themselves the Coalition of Restaurant Owners for Liquor Control Fairness (CROLF), filed a lawsuit against the PLCB in the middle of June.

There are a number of reasons that make the PLCB’s latest endeavor questionable.

  • The boutique concept violates a long standing code which prohibits drinking of alcoholic beverages on liquor outlet premises. The suit alleges that the boutique within Garces Trading Company does not adhere to appropriate standards.
  • The concept gives restaurants with a wine boutique a competitive advantage. Alcohol serving establishments must apply for an expensive liquor license or liability insurance. Wine boutiques can sell wine at-cost, while restaurants must buy wine from the PLCB, and then raise prices to generate profit.
  • The PLCB is a regulatory agency, monitoring alcohol sales at restaurants with the power to prosecute. With a boutique, CROLF argues, the PLCB is seeking to compete with the same establishments it regulates.
  • There appears to be no formal application or advertisement for the program, contrasting with the PLCB statement that the process for a wine boutique is open. Garces Trading Company appears to be hand-selected to operate with a wine boutique.

So far, Garces is the only restaurant to operate with a wine boutique, but the PLCB appears to be looking for venues in the Pittsburgh strip district. Handpicking political favorites to operate a boutique does not offer a competitive market or level playing field for restaurants. A government agency imitating businesses is no substitute for choice and competition.