Should beer distributors get into the wine business?
Wine and beer, never fear. Beer and wine, mighty fine.
When it comes to alcohol sales, Pennsylvania’s lawmakers seem intent on reversing decades of regulatory dysfunction all at once, not giving much thought to any objective except raising state revenue.
At present, the Liquor Control Board transfers about $90 million a year into the state treasury. Customers pay about $376 million in taxes on the sale of wine and spirits. Combined, that amounts to about $466 million annually.
The new thinking is that it’s more lucrative for the state to sell liquor licenses than it is to sell liquor — the consumer will pay a state sales tax regardless of who sells the wine, beer or liquor.
Consequently, regulations are being rewritten — laws like Act 39 of 2016, which allows limited wine sales at licensed restaurants, hotels and grocery stores.
The objective: combined sales tax, wholesale and licensing revenue of $500 million or more.
Act 39 did not expand wine sales to beer distributors. Sen. Tom Killion, a Republican representing Chester and Delaware counties, thinks that was an oversight. He believes the distributors should have the right to sell wine too. At least, he thinks the LCB should have the right to offer beer distributors a license to do so.
Killion’s proposal, Senate Bill 1359, would allow beer distributors to buy a $2,000 license and sell up to four bottles of wine at a time.
It doesn’t mean they will, or even that they should.
It’s difficult to imagine wine and beer sales coexisting inside the typical rough-and-tumble confines of a distributorship. Marketing of beer by the case conjures images of big-rig trucks, forklifts and pallets; wine denotes a more graceful, delicate, “china-shop” touch.
Are wine and beer sales compatible — specifically when the wine is sold by the bottle, limit four to a customer, and beer by the 24-pack?
Legislators touting privatization say it will enhance consumer convenience. But there’s no convenience in making a side-trip to the beer distributor. True convenience would be wine and beer sales at your local grocer or convenience store.
Senate Bill 1359, if approved, turns the compatibility question into a $2,000 gamble.
A similar question recently was tested and lost. Pennsylvania casinos were offered a $1 million annual license to extend alcohol sales around the clock. All 12 operating casinos turned down the offer.
“We’re not going to pay $1 million for the privilege of selling alcohol after 2 a.m. and I don’t know of any other casino that will,” said Mark Juliano, CEO of Sands Casino in Bethlehem. “Who advises these legislators? This one doesn’t make a lot of sense.”
In a statement backing his proposal, Killion said: “Pennsylvania beer distributors have invested thousands of dollars into their businesses for years and played by the crazy rules set by the state.”
It could be argued that the crazy rules gave shape to the concept of retail beer distributorships. Why continue imposing crazy rules to impede them?
Wouldn’t the beer, wine and spirits-selling establishments operate more profitably — and generate more tax revenue in the process — if the state simply got out of their way?
