In the summer of 2010, the Pennsylvania Liquor Control Board (PLCB) began rolling out wine vending machines in supermarkets, portraying them as a consumer-friendly alternative to the state)s liquor stores. Fourteen months later, Pennsylvania Auditor General Jack Wagner reported that the "wine kiosks" were operating at a loss, costing taxpayers more than $1 million so far.
"We think the wine kiosk program has failed," Wagner said at a press conference in August, "and it needs dramatic, radical changes if the program is going to continue to exist." His report attributed the failure largely to disruptive, persistent mechanical problems, but the cumbersome, intrusive purchase process may also help explain why the kiosks were not as popular as anticipated. When they are working, the machines dispense a limited selection of wines at limited locations and times to customers who present ID, look into a camera monitored by a state employee, breathe into a blood-alcohol meter, and swipe a credit card.
The PLCB expected to have 100 kiosks in grocery stores throughout the state, each selling at least 35 bottles a day. But only 32 machines were ever up and running at one time, and only 12 ever hit that sales target for even a week. In June the Wegmans supermarket chain withdrew from the kiosk program, bringing the total number of machines down to 22. Two months later Walmart canceled plans to install 23 kiosks. Meanwhile, the PLCB is embroiled in a financial dispute with the contractor that operates the machines, saying it owes the state the amount lost on the venture.
Jay Ostrich, director of public affairs for the Commonwealth Foundation, a free market think tank, sees the kiosk program as Exhibit A in the case for privatization. He told the Pennsylvania Independent that the program "is really a symptom of a much greater illness in that the PLCB has continued to try to mimic private enterprise and has been a complete failure at doing so."