Pa. Liquor Privatization Debate May Exclude Beer

HARRISBURG, Pa. (AP) — Pennsylvania's government monopoly over the sale of liquor and wine faces its toughest test in recent memory, but the looming clash in the Legislature is likely to have little impact on the one alcoholic beverage that already has been privatized — beer. Regardless of the state stores' fate, a combination of competition and court rulings is driving a transformation that is giving beer drinkers more options and convenience than they've ever had before.

HARRISBURG, Pa. (AP) — Pennsylvania's government monopoly over the sale of liquor and wine faces its toughest test in recent memory, but the looming clash in the Legislature is likely to have little impact on the one alcoholic beverage that already has been privatized — beer.

Regardless of the state stores' fate, a combination of competition and court rulings is driving a transformation that is giving beer drinkers more options and convenience than they've ever had before.

Still, beer marketing in Pennsylvania is a puzzle of regulations that limits which types of businesses can sell beer and in which amounts — an enduring source of complaints from beer drinkers and sellers.

In the approaching debate over privatizing liquor stores, licensed beverage distributors and food stores — often combatants in the fight for more flexibility in selling beer — are hoping lawmakers will heed their arguments for more consumer-friendly beer laws. Both sides also have expressed interest in selling wine and liquor.

The leading proposal would allow retailers licensed to sell liquor and wine to also hold beer licenses, but it would not change the beer laws. The sponsor — House Majority Leader Mike Turzai, R-Allegheny — does not want beer issues to dilute the debate over privatization of liquor and wine, said his spokesman, Steve Miskin.

"It's going to be a tough enough fight without bringing (beer) into it," he said.

In recent years, a growing number of supermarket chains and other food stores have been buying liquor licenses and making investments — such as adding "cafes" where beer may be consumed on the premises and hiring separate cashiers to ring up beer purchases — that entitle them to sell takeout beer by the six-pack. Dozens of stores now do this, including all 14 Wegmans supermarkets.

The trend is eroding the profits of many of the local beverage distributorships that have long been the primary source of retail beer in Pennsylvania — even though they sell beer only by the case or in larger volumes.

The Pennsylvania Malt Beverage Distributors Association, which represents many of the more than 1,200 distributors, has stepped up its lobbying for the right to sell six-packs.

"Beer is 80 percent of our business or more. ... (The new competitors) are able to sell beer in a quantity that is more convenient for customers and we're not able to do that," said Mark Tanczos, president of the association and owner of Tanczos Beverages in Bethlehem.

Forty-five other states allow beer to be sold in supermarkets and convenience stores, said David McCorkle, president of the Pennsylvania Food Merchants Association, which speaks for 1,000 food retailers who own 5,000 stores. Given a choice to sell beer or liquor, they would choose beer first, he said.

"Beer sales are the priority, frankly, for the supermarkets and convenience stores," McCorkle said.

Rochester, N.Y.-based Wegmans won a state Supreme Court ruling in December that threw out a lawsuit filed by the distributors' association challenging the legality of the chain's beer sales.

"The sale of beer in six-packs in our Market Cafe has been enormously successful, and in fact, exceeded our expectations," said company spokesman Jo Natale.

Wegmans plans to open its 15th Pennsylvania store in King of Prussia next year. Like two other Wegmans stores in suburban Philadelphia, the new one will offer not only beer but a full bar service.

Other chains that sell beer in at least some of their Pennsylvania stores include Pittsburgh-based Giant-Eagle Inc., Sunbury-based Weis Markets Inc. and Carlisle-based Giant Food Stores Inc.

The stores offer a wide range of beers, including exotic but expensive "craft beers" that are more likely to sell by the six-pack than in 24-bottle cases.

Most of all, customers "appreciate the convenience. ... It saves them an extra shopping trip," said Weis spokesman Dennis Curtin.

Altoona-based Sheetz Inc., the only convenience-store chain that sells beer in Pennsylvania, fought in court with distributors over the on-premises consumption requirement before the Pennsylvania Liquor Control Board granted its current license to sell beer at one of its Altoona stores last year.

The main building houses a 9,000-square-foot restaurant, where beer, other beverages and ready-to-eat food can be purchased and consumed, and a 1,000-square-foot convenience store that sells bread, milk and similar items.

Because Pennsylvania's post-Prohibition laws bar the sale of alcoholic beverages and gasoline on the same property, the largely automated gas pumps are situated on an adjacent tract that Sheetz owns. Customers who need help can get it from the convenience store clerk next door, said Louie Sheetz, the company's executive vice president.

"In the end, what you have here ... is the same customer transaction convenience that we have in our stores in North Carolina" — one-stop shopping for gasoline, a sandwich and a six-pack of beer, he said.

Sheetz, which has 209 of its 400 stores in Pennsylvania, thinks the beer laws should be part of any overhaul of the liquor and wine system.

"You've got to wonder why beer wouldn't be part of that movement," he said.

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