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Pennsylvania is poised to turn off the spigot on its government-run liquor monopoly. The only hurdle that remains is the GOP-led state Senate. Last month, the Republican-run state House of Representatives made history by passing a bill that would privatize the sale of wine and liquor in Pennsylvania for the first time since Prohibition. HB 790 passed largely along party lines, 105-90. Not a single Democrat voted for it. The bill calls for a gradual sell-off of licenses to private entrepreneurs. Beer distributors get first crack at the licenses, but eventually, all 600-plus PA State Stores would close.
Senate Majority Leader Dominic Pileggi has made it clear that liquor privatization is not a top priority for his chamber. However, Gov. Tom Corbett’s pushing hard for a vote timed to the state budget which must be passed by June 30. Corbett also reportedly has been telling donors and senators privately that he needs passage to win re-election.
House Majority Leader Mike Turzai crafted the bill that passed that chamber. HB 790 allows beer distributors to purchase the liquor licenses in the first year. After 12 months, supermarkets, big-box retailers, and individuals would be able to enter the liquor arena. State stores would shutter, although there’s a possibility some LCB rural outlets would stay open.
Democrats oppose the plan claiming it will lead to higher prices, more drunk driving and underage drinking, and lower state revenues. The state’s wine and spirit stores bring in some $170 million a year in profit to the General Fund. Plus, liquor privatization will cost about 4,000 state store workers their jobs, although there are provisions in the bill for tax credits to companies that hire state store employees and retraining assistance for displaced clerks. Gov. Corbett boasts that the sell-off will generate up to $800 million that he wants to target in grants to public schools through “Passport for Learning" block grants.
If you're looking for simplicity, this bill surely doesn't achieve it. Confusion still reigns and convenience remains elusive for alcohol consumers. For example, customers would still have to go to multiple places to get the wine, spirits and beer they want. Click here for a fuller description by Pennlive.com's Sue Gleiter of the ins and outs of the inconvenience.
David McCorkle, president and CEO of the Pennsylvania Food Merchants Association, will join the panel. His organization represents about 1200 supermarkets and convenience stores throughout Pennsylvania. McCorkle wants the Senate to approve a much more robust liquor-privatization plan. “We’d like to see any retailer who qualifies for a license able to obtain one. That’s what consumers are looking for -- convenience, selection and price,” McCorkle explained. He said retailers are interested primarily in being able to sell beer more widely because that is the number-one interest of consumers who come to their stores. Secondly, they want to be able to offer wine, and as a third option, liquor. “It’s all based on customer interest, what Pennsylvania consumers tell us they want at our stores,” he added.
Mark Tanczos, president of the Malt Beverage Distributors Association of Pennsylvania, also will appear on the program. His family has owned and operated a beer distribution company, Tanczos Beverages, in the Lehigh Valley for more than 50 years. He notes on the company's website, "The business we are in is not like a dentist office. We sell fun! And it's a great atmosphere to work in." Many Pennsylvania beer distributors, like Tanczos, are family-owned, multi-generation small businesses who view this legislation as their death knell. They fear the competition posed by grocery and convenience stores and big-box retailers who can trump them on price, advertising and shelf space.
Utah is the only other state that completely controls the sale of alcohol. The Senate Law and Justice Committee, chaired by Republican Sen. Chuck McIlhinney, will begin hearings on liquor privatization on April 30. McIlhinney seems to subscribe to the “let’s just modernize the system” camp. His competing bill enables beer distributors to buy a special license to sell wine and liquor. He wants to keep the state in the wholesale wine and spirits business.
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