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March 19, 2013 | By | Posted in Legislature

Privatization plan doesn’t toast to beer consumers, brewers say

By Melissa Daniels | PA Independent

HARRISBURG – It’s no secret Pennsylvanians love their beer.

But the industry behind those beers doesn’t love the plan to privatize Pennsylvania’s state-run wine and liquor system.

MADE IN PENNSYLVANIA: Yuengling Lager is made in Pottsville, Pa., and is the oldest operating brewery in the United States.

MADE IN PENNSYLVANIA: Yuengling Lager is made in Pottsville, Pa., and is the oldest operating brewery in the United States.

The privatization bill set to go before the full state House for debate on Wednesday would open up the sales of wine and liquor in grocery stores and elsewhere for the first time since Prohibition. But some restrictions on how beer is sold would stay in place.

The original plan presented by Gov. Tom Corbett in January would have allowed beer sales at grocery stores, pharmacies, big box stores and gas stations in addition to beer distributors and the small number of grocery stores that currently sell beer by obtaining a restaurant license.

But lawmakers stripped most of that language out of the proposal on Monday – meaning consumers wanting to buy beer will still have limited options, even as wine and liquor sales become more open.

Liquor Control Committee Chairman John Taylor, R-Philadelphia, said these changes were made because beer distributors were made vulnerable, potentially losing their business to competition from other stores.

“What really kills beer distributors is the real proliferation of beer in grocery stores,” Taylor said. “So that’s really not happening here. That’s the real big difference between the governor’s plans and this one.”

But what’s good for the distributor is not necessarily good for the brewer.

A collection of brewers operating in the state authored a letter to Pennsylvania lawmakers on Tuesday urging opposition to the privatization bill.

They argue the plan would create an unlevel playing field between beer and wine, which would have to share shelf space in beer distributors, and possibly grocery stores. The brewers say this isn’t what consumers want, or expect.

“House Bill 790 would result in the beer segment losing as much as 50 percent of the floor and shelf space within beer distributorships, which account for more than two-thirds of our sales within Pennsylvania,” reads the letter. “It also would establish hundreds of new ‘Wine and Spirits’ outlets where only their products would be sold.”

The letter was circulated by Anheuser Busch, MillerCoors, Pennsylvania Beer Association and Brewers of Pennsylvania.

Brewers of Pennsylvania is the membership association representing breweries throughout the state. Members include popular names like Yuengling, Troegs Brewing Company and Victory Brewing Company.

In the privatization plan currently under House consideration, the state would create 1,200 new wine and spirit licenses. Existing beer distributors get the first crack at purchasing these licenses, and would have a year to buy one if they wanted to expand their business to include those products – meaning less room for beer on the shelves.

The one win for brewers – and beer-buying Pennsylvanians – is that beer could be sold at gas stations. Right now the state has a ban on selling alcohol wherever liquid fuels are sold, but the proposal would lift that.

And the proposal offers package reform permits for distributors, as well as bars or grocery stores that sell beer. The permit allows sales of six-packs, 12-packs and 64 oz. jugs.

In the letter, the brewers also take issue with the proposal to let grocery stores purchase licenses to sell unlimited amounts of wine in any part of the store. To sell beer, a grocery store has to become a licensed restaurant facility, a requirement that would stay in place under the privatization plan.

Contact Melissa Daniels at melissa@paindependent.com

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Melissa Daniels is a reporter for PA Independent. She can be reached at 717-350-0962 or Melissa@PAIndependent.com

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