License Auctions Raising Concerns
In the fall of 2016, Giant Foods made the high bid in the LCB zombie auction for a license in Bristol Township, Bucks County — $301,000.
This year, another restaurant license in the same township sold at auction for $33,344.
An article, “Falling auction prices trigger concerns”, in the Central Pennsylvania Business Journal, claims the average winning bid of the state’s zombie licenses has dropped from $212,000 to $74,000 since they were begun just two years ago.
In most of the state these are licenses from failed businesses, many of which were in declining markets. Meanwhile, other restaurant owners had licenses either for sale, which were being ignored. Big buyers were going to the auction. The article quotes the Pennsylvania Restaurant Association as saying the former high auction prices “made it even harder for smaller restaurants to get their hands on liquor licenses.” Will the auction prices now begin to devalue the business investment in the license?
The article says there are still 1,000 potential zombie licenses. Perhaps its time for the Board to develop data to determine whether the program should continue as it exists, or whether it deserves a hard look bearing proper respect to the state’s license investors.