Liquor Privatization Must Provide Greater Choice, Convenience While Protecting Small Businesses, Preserving Access in Rural Areas

An Op-Ed by
Senator Joe Scarnati -- President Pro Tempore

As I have traveled throughout my Senatorial District lately, I have spoken with many individuals and groups who are supportive of increased consumer choice and convenience when it comes to purchasing alcohol in Pennsylvania. I share this goal.

That is why many were encouraged when, after years of hard work and long debate on the issue, the House of Representatives recently passed HB790. While far from perfect, this legislation was an important first step in advancing the cause of privatizing our state liquor system, which I also support.

However, something no one should support is rushing to enact legislation with the potential to create an equally burdensome and inconvenient system while threatening the existence of our small businesses and decreasing access to Pennsylvanians living in rural areas.

What I have heard most often from people is that they just want to be able to pick up their groceries, a bottle of wine and some beer at the same location. It is important to understand that HB790 will not afford Pennsylvanians that convenience.

In order to sell wine, a grocery store will need to spend up to nearly $200,000 for a Wine Only License. As if that cost wasn’t burdensome enough for most grocers, if they want to sell beer as well, then they would need to also purchase a separate Restaurant License which would allow them to sell no more than two twelve packs to-go.

In addition, to even be eligible for a Restaurant License, the grocer must first erect a minimum 400 sq ft area separated from the rest of the store by a four foot high barrier, containing a minimum thirty seat restaurant which sells meals available for consumption on the premises to be paid for at separate cash registers.

Got all that?

Me neither.

And that’s part of the problem.

One thing Pennsylvanians aren’t asking for is a system even more confusing than the current one. In addition to being overly complicated for consumers and retailers, these numerous rules, requirements and regulations make it far too expensive for most private business owners to participate, especially those in rural areas.

Anyone who has traveled to other states and purchased alcohol can tell you, Pennsylvania’s current system is flawed. At the same time, it is important to recognize that this is the system we have operated under since 1933.

Dramatically changing that system without negatively impacting private small business owners and their employees will take a delicate balance. Many beer distributors have been operated by the same families for generations and they have invested their entire livelihoods in their success.

Currently in Pennsylvania, there are approximately 1,200 distributors licensed to sell beer in the state. These small business owners have, in most cases, paid tens of thousands of dollars for the right to sell alcohol in our Commonwealth. HB790 would flood the market with thousands of new licenses, greatly devaluing current distributor licenses.

Beer distributors I have spoken with cannot afford the exorbitant cost of the new wine and spirits licenses needed in order to even attempt to compete in the new marketplace. Moreover, they do not have the space required to stock the additional product, nor the capital available to expand their current businesses to accommodate it.

All of the aforementioned issues will be magnified in rural areas of the Commonwealth, such as the 25th Senatorial District, which I represent. If privatization isn’t done appropriately, elimination of the state liquor stores could result in my constituents having to drive longer distances to reach fewer outlets, selling a decreased selection of products.

I will continue to work alongside Senate Law & Justice Committee Chairman Chuck McIlhinney and the rest of our Senate Republican colleagues to craft a privatization proposal which increases consumer choice and convenience for all areas of the Commonwealth, while protecting our small business owners who have invested so much in their communities.

Pennsylvanians who have been waiting eighty years deserve nothing less.

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