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May 15, 2013 | By | Posted in Legislature

What’s in your package? PA beer distributors call for six-pack sales

By Melissa Daniels | PA Independent

CHEERS: Privatization debates in the Pennsylvania General Assembly could mean changes to where Pennsylvanians can buy six packs.

CHEERS: Privatization debates in the Pennsylvania General Assembly could mean changes to where Pennsylvanians can buy six packs.

HARRISBURG — A simple six-pack of beer is becoming a focal point of the most substantive legislative debate on Pennsylvania alcohol laws since Prohibition.

A Tuesday afternoon Senate Law and Justice Committee on liquor privatization, headed by Chairman Chuck McIlhinney, R-Bucks, featured numerous testifiers discussing the already-private industry of beer sales.

Chief among the concerns from the beer distributor industry and taverns is package reform, or allowing establishments who sell beer to sell different amounts. Under current law, beer distributors cannot sell less than a case, and bars or grocery stores with the ability to sell bottles cannot sell more than a 12-pack.

The Senate, under McIlhinney’s leadership, is evaluating House Bill 790, which the House of Representatives passed in March. That bill would privatize the state store system of the Pennsylvania Liquor Control Board by selling off the state stores. It also includes varying levels of package reform and changes to grocery store alcohol sale licenses.

But a rewrite of that proposal is at hand in the Senate, where achieving full-on privatization is dubious. As McIlhinney put it, it’s become not just privatization, but “alcohol reform.”

His goal, he said, is to get 26 votes to pass a plan – and that might mean giving beer sellers what they’re looking for. McIlhinney said he plans to work some type of package reform for beer sales into his proposal, which he plans to draft in early to mid-June, following a third committee hearing.

“What I’ve seen evolve now in the private beer industry there needs to be some package reform between what types of packages you can sell at the beer distributors and the bars,” McIlhinney said. “The beer distributors always wanted to sell six packs, but didn’t want the taverns to sell cases and vice versa. I think at this point they’re talking a little bit more freely about it.”

Mark Tanczos, president of the Malt Beverage Distributors Association of Pennsylvania, represents about 450 beer distributors throughout the state, about a third of those who operate.

Tanczos said his organization has been lobbying for package reform – the ability to sell six-packs – since the law was created in 1936. He’s hopeful, with all the discussion going on, this might be the year they get it.

The key will be compromise, he said.

“All the proposals that have been out there, first of all start off with package reform for beer,” Tanczos said. “We, at a minimum, hope that happens.”

What beer distributors don’t want is convenience stores or gas stations getting in the beer business, Tanczos said. This could obliterate the “specialty retailer” niche that beer distributors rely on, the kind that has kept them in business.

“We have no other way to make a living and we have other outlets selling more conveniently than us,” Tanczos said. “And that’s been a challenge.”

Another wrinkle is grocery stores, which are already permitted to sell beer if they obtain an “R” license, which requires them operate a restaurant-like facility in order to sell up to two six packs of beer per customer. Throughout the commonwealth, there’s 160 such grocery stores, according to the PLCB.

Jason Hopp, vice president and general counsel with Pennsylvania-based Redner’s Markets grocery chain, said the business would like to see “R” licenses become more flexible in terms of the size of store to which they apply.

Amy Christie, executive director of the Pennsylvania Licensed Beverage Association, which represents alcohol-selling bars, taverns and restaurants, said privatization and package reform discussion pops up “every five or ten years,” but the HB 790 discussion has stronger momentum than past talks.

If legislators are open to reform alcohol laws, Christie said the key is to keep the changes equal across all tiers of alcohol sellers.

If beer distributors are allowed to sell six-packs, then taverns should be allowed to sell cases to create a level playing field, Christie said. And while grocery stores selling six-packs of beer may provide competition to neighborhood bars, they should operate under the same license.

“If anything happens in this debate, increase what our businesses can sell,” she said. “Increase the level of business that our members are able to produce and the number of jobs that we’ll be able to keep people employed at.”

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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