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Liquor Control Board chief uncorks private-label probe

The chairman of the state Liquor Control Board has initiated an internal investigation into how the agency brought eight controversial, in-house brands of wine and spirits to market over the last 21⁄2 years.

Joseph E. “Skip” Brion ordered the probe of the LCB‘s trademarked TableLeaf wine and seven additional private brands, some of which debuted as recently as last week.

The LCB has 35 products under eight in-house labels: TableLeaf, Dialed In, LA MERIKA, Hayes Valley, Zita, Las Parcelas and Vinestone wines, and four flavors of Copper Sun vodka.

Vinestone, a 3-liter boxed wine, became available last week.

Brion‘s call for answers was made amid criticism that the LCB was wrong to spend public funds to dabble in the private sector and unfairly compete against the companies whose products it sells.

A Chester County attorney nominated for his post in July 2011 by Gov. Tom Corbett, Brion became head of the three-member board in November after all but one of the private labels had been approved.

He said he was not told about any of the private brands until he was about four months into his job.

Brion said he wasn‘t told that a July vote to approve the sale of Vinestone wines meant he was approving an LCB private-label brand.

All eight LCB brands were approved by board members, but meeting minutes show the brands were listed alongside other new products without information identifying them as LCB private labels.

As part of the investigation, Brion said he‘s spoken with staff members and the LCB‘s legal counsel.

“I‘d rather not talk about that in the newspaper right now,” Brion said when pressed for specifics.

Brion said he also talked to officials in the wine and spirits industry about the private-label issue.

“(The industry) is hoping there are no merchant (private) labels. The industry, I think, would like to see their products on the shelves,” Brion said. “I agree with some of the issues they bring forward that maybe we shouldn‘t be in the business of private labels, but we are.”

Brion said that “down the road” there may be a decision by the board to end the private-label program, but for now the agency is not developing any more private brands.

“I‘m not convinced … that we need to have the merchant labels to do what we need to do under the liquor code,” Brion said.

In recent interviews, LCB executive director Joe Conti and marketing director Jim Short offered conflicting stories about how TableLeaf was developed and who was involved in the decision-making process. Some of those cited by the executives denied they had any role in the project.

Conti would not comment about Brion‘s call for an investigation.

Published reports indicate the state Ethics Commission is investigating allegations that Conti, Short and former board member Patrick “P.J.” Stapleton accepted gifts and favors from vendors.

Brion acknowledged the ongoing ethics probe but declined to comment about whether the agency‘s private-label program is part of the investigation.

Conti and Short declined to comment about the ethics probe.

Stapleton‘s attorney, Henry Hockeimer Jr., said Stapleton “is cooperating with the investigation” and that “he has not done anything wrong.”

Critics outside the industry have questioned the need for private labels.

The LCB has defended its private labels as successful products that fill specific needs within wine and spirits categories.

Former LCB Chairman Jonathan Newman, who resigned from the agency in 2007, said he believes there was a “complete lack of process” and that the private-label program “doesn‘t smell good.