Another liquor privatization bill enters the fray in Pennsylvania

Jun 24, 2015

(Delcotimes) - A new liquor privatization bill would allow beer distributors to turn their businesses into one-stop shops where consumers could buy unlimited quantities of beer, wine and liquor.

Their potential competitors wouldn’t get the same latitude.

Sponsored by state Sen. Scott Wagner, R-York, the bill would also allow grocery stores, hotels and bars to sell takeout wine and liquor, but it limits how much consumers can buy at one time to three liters of each.

“The attempt is to mirror the current system as closely as possible,” said Jason High, Wagner’s chief of staff and the architect of the privatization bill his boss introduced Monday.

Instead of creating 1,200 wine and spirit licenses, with beer distributors getting first crack at them - as House Speaker Mike Turzai’s privatization plan does - Wagner’s would only allow existing licensees to build upon their inventories.

Part the strategy is to avoid mixing wine and spirit policy changes with the already-privatized but heavily regulated beer industry. While a powerful public sector union has stymied privatization, many beer distributors are wary of legislation that would increase competition.

Right now, beer distributors sell cases of beer and 12 packs while six-packs are sold in various places, including bars, delis, bottle shops and grocery stores that obtain a restaurant liquor license. Pennsylvanians largely must buy wine and liquor from about 600 state-owned stores.

It’s a confusing arrangement - especially to visitors who just want to buy a frothy beverage - but one that Pennsylvanians have lived with for decades.

Republican lawmakers have had their hopes set on selling off the state-owned wine and liquor system for years, only to find it an elusive goal. It’s on the table again as the June 30 state budget deadline nears, but its future is uncertain because Democratic Gov. Tom Wolf favors the modernization of state stores instead.

The House has already passed Turzai’s privatization plan for the second straight session, but the Senate has been less adamant about freeing booze.

Last week, though, Senate President Pro Tempore Joe Scarnati, the top Republican in the chamber, said GOP legislative leaders were close to agreeing on a privatization plan. He wouldn’t say specifically how it might compare to Turzai’s original bill, but noted it would include closing state stores and the sale/lease of the wholesale system.

Wagner’s bill could serve as a construct, but any proposal would probably be attached to Turzai’s bill, Scarnati said. High echoed those comments Monday, when he said that what the Senate could pass would be “close in concept” to Wagner’s legislation.

Retail permit fees in Wagner’s legislation pale in comparison to those found in Turzai’s plan, but both would phase out state stores and divest the state of its wholesale booze system.

Yet neither create a true laissez-faire system for booze sales, thanks to limitations on who can sell what or how much they can send out of the store at a time. Turzai’s bill, for example, allows grocery stores to sell a maximum of 12 bottles of wine at a time and no liquor.

“It’s a far cry from what a real free market would look like,” Leo Knepper, executive director of the conservative nonprofit Citizens Alliance of Pennsylvania, said about the privatization proposals.

Consumers really want more options - like the ability to buy beer, wine and liquor in any quantities at supermarkets, convenience stores and pharmacies and other retail places, said David McCorkle, the president and CEO of the Pennsylvania Food Merchants Association, a trade association.

That isn’t the type of talk circulating in Harrisburg, but lawmakers still have a window to tweak the privatization proposal before the budget deadline, McCorkle said.

“They have the time, but we’ve got to get them on the right page,” he said.


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