Pennsylvania’s bad beer regulation system lives on

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Eight years down the road, supermarket beer sales are changing the entire alcohol beverage sales category in Pennsylvania, and not for the better. Given our state’s comically byzantine alcohol laws, Pennsylvanians remain pathetically happy that some of us are now allowed to buy beer in supermarkets. If it seems remarkable that this has only happened some 70-odd years after Prohibition was repealed, a brief explanation of how beer is sold in Pennsylvania will only deepen your amazement. Here goes.

Since repeal, container beer sales have been allowed only at licensed beer stores and taverns. You may only purchase by the case or keg at the stores, and the cases must be as packed by the brewery; no mix-and-match allowed. You may only buy up to a 12-pack at taverns (bars, licensed delis and restaurants) and then, literally, if you step out the door and step back in, you may buy another. To add to the confusion, the Pennsylvania Liquor Control Board (PLCB) arbitrarily decided last year that a “case” is now defined as a 12-pack, despite clearly contrary language in the actual law.

There are further restrictions. The stores may only sell beer, soft drinks, a range of snacks limited by law, glassware, tobacco and lottery tickets. Taverns must also sell beer by the drink and food, and offer at least 30 seats for customers. There are even more details, like draft to-go sales; no licensees allowed to sell auto fuels; and the numerous other varieties of license, but we’ll put those aside.

About 10 years ago, some supermarkets realized that, if they bought a tavern license, they should be able to sell beer to-go. After the PLCB did some fiddling with the requirements – beer sales at separate registers in an area set off from the store, and a café with seating for 30 people (a court ruling later confirmed that the supermarkets must also sell beer by the glass if they sell it to go, a frankly amazing insistence given that taverns are not required to sell beer to go) – they said it was within the regulations. This was immediately challenged by the Malt Beverage Distributors Association, who rightly saw this as a threat to their hold on beer sales, but the Pennsylvania Supreme Court affirmed the ruling.

That sounds like progress – halting, twisted progress, but progress nonetheless. Except that such sales were already taking place in dozens of delicatessens; the rules pretty much excluded smaller grocery stores because of the café requirement; and the new cafés mostly sit as empty, wasted retail space. Not every supermarket has decided to make the substantial investment a license requires: sometimes as much as $200,000 just for the paper, plus whatever the café and separate register area cost in build-out and labor. Others have been stymied by local zoning or municipal board opposition. Eight years on, not one of the 10 grocery stores within 3 miles of my home offers beer; very few stores in the major population centers of Philadelphia or Pittsburgh sell beer, except on the suburban fringe.

What’s even worse is how this ruling affects general sales of alcohol in the state. Tavern licenses are limited by a population-based quota system; one license per 3,000 people in a county. The licenses are transferable within a county, for sale by the current owner at whatever the market will bear.

Therefore, every license bought by a supermarket makes licenses for actual taverns more scarce, and thus, more expensive. There are unintended consequences. Small corner bars, often family-owned, find the price irresistible and sell out. Chain restaurants tend to buy up the licenses, given their deeper pockets, leaving fewer opportunities for independent local businesses. Independent operators that do buy are often tempted to oversell and overserve, to create risky promotions and become public nuisances; or they head in the other direction and become more exclusive, high-end operations. The familiar American institution, the egalitarian watering hole where all are welcome, is disappearing in Pennsylvania.

Small grocery stores, or large ones that either can’t get or can’t afford a tavern license, are effectively shut out of the beer market, making them less attractive to shoppers looking for a one-stop experience. And of course, the traditional beer stores and taverns, many of which have made tremendous efforts to work within the system and build the fantastic craft beer scene Pennsylvania enjoys, are losing business rapidly from the increasingly intense competition from the supermarkets.

An equitable solution is needed, not more arbitrary tinkering by the PLCB, a three-person commission of political appointees who rarely, if ever, have any experience in beverage alcohol sales. The Pennsylvania Legislature has repeatedly declined to consider effective changes in state liquor law – ranging from a new supermarket license to a desperately needed modernization of the entire liquor code – most likely because of the strong political clout of the taverns and the beer industry, who are aided by partisans of the state-owned wine and spirits monopoly. All of these interest groups have an interest in keeping things static as much as possible.

The infuriating thing about all of this is that in no case, not one, has the PLCB, the courts or the Legislature considered the desires of citizens. What we want is simple: what the residents of other states can do – go to a store and come home with groceries, including whatever amount of beverage alcohol we want to purchase, from a bottle for that night’s dinner to a full carload for a family graduation party. No one in Harrisburg is offering any plan to achieve that. Instead, we get one convoluted compromise after another, and we continue to wait on the full fruits of Repeal, over 80 years later.

Guest blogger Lew Bryson is the author of “Tasting Whiskey,” published in 2014, and four books on the breweries of Pennsylvania, New York, Virginia, Maryland and Delaware. 

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  • Albert Brooks

    The Liquor Board of Pennsylvania doesn’t know Liquor retail, Large business or their ass from a hole in the ground. And that is on a good day.

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