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Liquor law solutions

Outdated system may not be so easy to fix

September 16, 2012
By MATT HUTCHINSON (mhutchinson@sugnazette.com) , Williamsport Sun-Gazette

Pennsylvania's system of buying wine, spirits and beer is so outdated and inconvenient, that it's almost easier to buy a bottle of wine in New Zealand and fly it back than to pick up the same thing in New Jersey.

It may sound like a far-fetched example, but one critic who advocates for the abolition of the state Liquor Control Board says it's very much true. By law, Pennsylvania residents are prohibited from purchasing alcohol across the state line.

Lew Bryson, a Philadelphia-area columnist, blogger and author on all things beer and spirits, makes no qualms about his dislike for the LCB and how beer, wine and liquor are sold in the state.

"We're looking at a system that is anti-business, anti-consumer," he says. "I have not experienced great service at the LCB stores, with a few exceptions."

Bryson said the state's divided system of selling alcohol with LCB, or "state" stores for wine and spirits, beer distributors and six pack shops makes no sense.

Neighboring states

Access to alcohol is more prevalent in neighboring states, where wine, spirits and beer are commonly sold in the same location at grocery stores and convenience stores.

Even Utah - which is the only other state in the nation besides Pennsylvania that has a government-controlled monopoly on retail and wholesale sales of wine and spirits - sells beer in convenience stores. That state also sells wine, spirits and beer together at its state and package stores.

Bryson also says that the state is fighting itself as a marketer and seller of alcohol while trying to enforce alcohol regulations.

Efforts to change how the state sells booze became a hot topic earlier this year when some Republican legislators proposed plans to do away with the LCB and auction off new licenses and allow beer distributors to sell six packs of beer in addition to wine and liquor.

But beer distributors aren't even in favor of that.

They're afraid big-box retailers like Wal-Mart and Target will buy up available licenses and offer alcohol with everything else they sell. Distributors would also have to reconfigure their stores if they wanted to sell additional products.

"When the long-term effects of this proposal are analyzed, it becomes quite clear that the plan will have a devastating impact on the future business existence of all beer distributors," the Philadelphia-based Malt Beverage Distributors Association of Pennsylvania states on its website.

"Ultimately, this amendment (to privatize) is really intended to drive beer distributors out of the market and force them to sell their (distributor) licenses to big retailers," the association states.

Locally, State Rep. Garth Everett, R-Muncy, has heard those concerns from small business owners who have distributorships.

"It's complicated and controversial," he says.

Everett says that efforts to help one faction - such as distributors - can end up hurting those in another - such as grocery stores.

"It's really grown into an issue that affects beer distributors. That's who I'm hearing from personally the most," he says. "I'm fundamentally for making this change, but I don't want to see our local beer distributors hurt."

200 amendments

Everett says bills that have been debated aren't perfect. In fact, House Bill 11, which generated a lot of attention before being put to rest until this fall, had 200 amendments attached to it.

"This has to be something at the end of the day that makes it better for the consumer," he says. "Get the Commonwealth of Pennsylvania out of the liquor business. I fundamentally agree with that political science thought that government shouldn't be in the business."

America's oldest brewery also has a problem with how it would be affected with a privitization bill.

Pottsville-based Yeungling brewery would be forced to compete even harder against larger beer producers Anheuser Busch and MillerCoors - both of which are owned by foreign interests.

Dave Casinelli, Yeungling's chief operating officer, said his brewery would potentially be squeezed out by those bigger breweries under new alcohol regulations because they would be able to sell 18-packs that are usually offered at a lower price point.

Yeungling sees the introduction of 18-packs as a "predatory product," according to Casinelli.

1 item affects another

"No Pennsylvania brewer has the ability to (sell) 18 packs," he says. "One of the problems in situations like this is ... you want to open the code and change something, it affects something else. You can't take part in fixing it without affecting others."

Bryson agrees that change is needed, but shouldn't be done in haste. He says there are plenty of models from which Pennsylvania can choose.

Bryson says the only way to make a successful change - at least for consumers - is to have beer, wine and spirits all sold in one place.

"You need to sell all three to have a really successful store," he says.

It's no wonder why Bryson sees Pennsylvania license plates at New Jersey liquor stores.

A 2011 study by the Commonwealth Foundation showed that 45 percent of residents in Philadelphia and surrounding counties purchased some or all of their alcohol outside the state.

"When you're in the system we're in now, every (state) store is the same," Bryson says.

And change doesn't always mean better.

"If it goes private, I can almost guarantee that some people will not have good selection," Bryson says.

Prices could even go up, as they did when Washington voters approved privatization last fall. That state instituted additional taxes on alcohol to make up for lost revenue.

"However, the majority of areas in the state are going to get better," adds Bryson.

 
 

 

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