Liquor Privatization Details

On Thursday, Feb. 26, the Pennsylvania House of Representatives made a historic vote to pass House Bill 466 by a vote of 114-87.

>> Comments from Majority Leader Dave Reed
>> Comments from Speaker Mike Turzai
>> Overview on FreeOurBoozePA.com

 
The current state-run liquor system in Pennsylvania was created in 1933 by then-Gov. Gifford Pinchot, who said the PA Liquor Control Board's mission was to make liquor sales “as inconvenient and expensive as possible.” 

Currently only two states, Pennsylvania and Utah, have complete control over wholesale and retail operations. 

House Bill 466
marks the most expansive wine and spirit privatization legislation to be considered by the PA House since the end of Prohibition and the institution of the current state store system.

 


Details on the Legislation

New Licenses
- Creates 1,200 Wine and Spirits licenses.
- Beer distributors would be given first shot at these licenses for the first year.
- After one year, remainder of unused licenses sold to public.
- Licenses would allow sale of wine or liquor or both, but a license is not separable for different sellers (one for wine, one for liquor).
- Does not expand locations where beer may be sold (remember, the PLCB is already allowing “R” license sales in groceries and convenience stores).

Costs

- License fees depend on county classification.
- Fees for beer distributors (first year):
o Wine -- $7,500 to $37,500
o Liquor -- $30,000 to $60,000
o Both -- $37,500 to $97,500
- Fees for public (after one year):
o Wine -- $97,500 to $187,500
o Liquor -- $142,500 to $262,500
o Both -- $240,000 to $450,000
- Renewal cost (every two years): $1,000
- Hours (Monday-Saturday) would be 9 a.m. to 11 p.m.
- Sunday Sales Permit (9 a.m. to 9 p.m.): $1,000 annually

Grocery Store (Wine) Licenses

- Grocery stores could be licensed to sell wine (maximum 12 bottles per transaction)
o Up to 12 bottles of wine for consumption off premises
o No wine purchases at self-checkout
- Fees would range from $97,500 to $187,500 (depending on county classification)
- Hours (Monday-Saturday) would be 7 a.m. to 11 p.m.
- Sunday Sales Permit (9 a.m. to 9 p.m.): $1,500 annually
- Renewal fees: $4,000 (County Classes 1-4) and $2,000 (County Classes 5-8)
- Number of licenses: 1 per 15,000 people with minimum two per county

Wholesale Divestiture
- Begins 12 months after legislation enacted
- Cost of license will be dependent upon the applicant’s book of business
o Sum of the wholesale profit margin on each product of a brand
- One Wine and Spirits Wholesale License to each successful applicant
o Applicant or affiliate of applicant may not hold Wine and Spirits Retail License or any other license authorizing the sale of wine and spirits
- Renewal fee of $5,000 every two years

State Store Closings
- When number of privately licensed stores (W&S and grocery) equals the number of state stores, the PLCB shall close the state stores or provide rationale for their continued operation.
- All state stores must close within six months of when the number of W&S stores plus licensed grocery stores equals 2 times the number of state stores in a county.
- The PLCB shall not operate fewer than 100 state stores.

Employee Help

New Licenses:
- Creates 1,200 Wine and Spirits licenses.
- Beer distributors would be given first shot at these licenses for the first year.
- After one year, remainder of unused licenses sold to public.
- Licenses would allow sale of wine or liquor or both, but a license is not separable for different sellers (one for wine, one for liquor).
- Does not expand locations where beer may be sold (remember, the PLCB is already allowing “R” license sales in groceries and convenience stores).