Wednesday, July 23, 2014

Beer distributors get most breaks

March 22. 2013 6:44PM
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The latest version of Pennsylvania liquor reform is a beer distributor’s dream. Want to add wine and spirits to the inventory? Go ahead. Just want wine? That’s OK, too; the license for hard liquor will be held in abeyance in case the beer distributor has a change of heart.

Under an amended liquor privatization plan that could come up for a vote as early as today, beer distributors get all sorts of advantages over other private merchants looking to obtain any of the state’s proposed 1,200 retail wine and spirits licenses. And consumers would be left with not as much convenience as they deserve.

First, the 1,138 beer distributors get first crack at the licenses. They have 12 months to apply, and only after that would the option open up for others.

Second, the rates that distributors would pay for a license are a fraction of what it would cost other businesses. For instance, a beer distributor in Allegheny County would pay $82,500 for a wine and spirits license, but another applicant would be charged $397,500. And only beer distributors would be eligible for four-year financing from the state by paying a 5 percent fee.

Third, the beer distributors would continue to be insulated from competition on selling beer. Although grocery stores could get licenses to sell wine, their ability to sell beer would be restricted, as it is now, to separate registers in a cafe section of the market.

Lawmakers were wrong to think the bill would be a slam-dunk if they kowtowed to the state’s beer distributors. The trade associations that represent them still don’t like the legislation. Why? The groups want to keep things just as they are, which is why they’ve been among the impediments to reform for a long time.

The sad thing about House Bill 790 — amended from the better plan proposed by Gov. Tom Corbett — is that the liquor system it would deliver is an improvement over what Pennsylvania has today. Although the movement away from state-owned, state-operated stores would be too gradual and slow, at least it would eventually get the state out of the wholesale and retail alcohol business. In other words, things would be worse if nothing changes.

That may be a weak argument for urging the House to pass the measure, but advancing the legislation would mean the Senate could start making significant repairs to this necessary reform. And Gov. Corbett should put his muscle behind that.

Pittsburgh Post-Gazette

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