Pennsylvania permits the shipment of malt and brewed beverages to Pennsylvania residents by wholesalers or retailers of another state or country. This license permits the holder to ship up to 192 fluid ounces per month to any one resident for his or her personal use. No more than 96 fluid ounces of a specific brand may be shipped to any one Pennsylvania resident in one calendar year.
Gone are the days of having to buy a whole case of beer or a keg at a beer distributor in Pennsylvania. On Tuesday, Governor Wolf signed House Bill 1196 into law, which will allow beer distributors to sell six-packs to customers.
What does this mean for beer distributors, retailers, and consumers in Pennsylvania? Among other things, earlier retail sales hours. Retail licensees can begin selling on Sundays at 9:00 a.m. rather than 11:00 a.m. Sporting venues can sell mixed drinks. Breweries can sell products of other licensed breweries, limited wineries, limited distilleries, and distilleries without having to secure a brewery pub license. A person licensed in another state may apply for a license to ship beer to customers, with certain restrictions. Distributor licensees can sell malt or brewed beverages in any amount to an unlicensed customer for off-premises consumption. This includes four-packs, 32-ounce bottles, growlers, and six-packs.
This is another win for distributors who, earlier this year, the PLCB declared that they were permitted to sell 12-packs of beer. The new law goes into effect in 60 days.
We’ve entered a new era in Pennsylvania. Yesterday, Governor Tom Wolf signed legislation into law that allows wine sales in licensed private establishments in the Commonwealth. Under the law grocery stores, restaurants, hotels, and takeout beer licensees are permitted to sell up to four bottles of takeout wine per customer. This is exciting news for Pennsylvanians as the sale of wine in grocery stores has not been permitted since before Prohibition.
The law also permits wine wholesalers to ship wine directly to consumers in Pennsylvania. The Commonwealth’s Wine & Spirits Stores can expand their hours of operation on Sundays and holidays, and are given more freedom in setting prices. Casinos will also be able to apply to sell alcohol 24 hours a day, 7 days a week. The law goes into effect in August, and is estimated to bring in $150 million to the Commonwealth in the first year.
New licensing procedures will be established by the Pennsylvania Liquor Control Board (PLCB) in response to the legislation. Existing licensees, and businesses seeking new licenses, should prepare for licensing changes related to the sale of wine, direct shipment of wine, and casinos that wish to sell wine around the clock.
This is a big win for anyone who sells wine or lives in Pennsylvania. The law opens a whole new market for businesses to expand their sales and brings needed convenience to Pennsylvania residents.
Bianca A. Roberto, member of the Business & Corporate and Beer & Spirits Groups, authored the article Raise a Glass: Pennsylvania’s Archaic Liquor Laws are Finally Changing, which was published in the Philadelphia Business Journal on October 27, 2015.
The article describes the impact that local brewers, distributors and retailers of beer have had on Pennsylvania’s economy in the last year. This impact has been both significant and positive, as the beer industry brought more than $9.2 billion into the Commonwealth in 2014. Even more positive, the industry employs nearly 41,000 people, and also helps generate jobs in similarly aligned industries like agriculture, finance, insurance and real estate.
Despite all this growth, Pennsylvania has extremely stringent liquor laws. Luckily, this does seem to be changing slowly, as “the Pennsylvania Liquor Control Board (PLCB) declared that beer distributors are permitted to sell 12-packs of beer.” Previous to this, these Pennsylvania beer distributors had been limited to only selling beer by the case or keg, and 6-packs could only be sold in bars, supermarkets or convenience stores permitted to sell them, usually at a higher cost.
Ms. Roberto also added, “the Concord Township Board of Supervisors approved beer sales at the Wawa located at 721 Naamans Creek Road in Chadds Ford. If approved, customers will be able to purchase up to two 6-packs of beer at the Delaware County store.”
You can read the full article by clicking here.
On Tuesday evening, the Concord Township Board of Supervisors in Delaware County, Pennsylvania approved beer sales at the Wawa located at 721 Naamans Creed Road in Chadds Ford. Customers will be able to purchase up to two 6-packs of beer at the Delaware County store. The Naamans Creek Road store is the first Wawa in Pennsylvania to be approved for beer sales.
Beer sales at Wawa could mean a whole new and vast market for local beer brewers. If Wawa chooses to expand the sale of beer to its other locations, local brewers could put their product in front of a large new set of consumers.
But what does this mean for beer distributors in Pennsylvania?
Earlier this year, the PLCB declared that beer distributors are permitted to sell 12-packs of beer. The distributors are required to purchase the beer in 12-pack shipments in order to resell to the consumer in that quantity. This was a huge win for Pennsylvania distributors who had been limited to selling beer by the case or keg. While the Pennsylvania liquor code permits bars, supermarkets and convenience stores to sell beers by the 6-pack, it tends to be sold at higher costs than those charged by distributors.
Given Wawa’s vast reach and popularity in Pennsylvania, this could be the start of a whole new area of competition for beer distributors in Pennsylvania. Similar to a restaurant, Wawa would be permitted to sell beer from 7:00 a.m. to 2:00 a.m. Monday through Saturday, and 9:00 a.m. to 2:00 a.m. on Sundays, while beer distributors are generally limited to sales from 9:00 a.m. to 10:00 p.m. Monday through Saturday, and 12:00 p.m. to 5:00 p.m. on Sundays. It may also be more appealing for customers to make one stop at Wawa to purchase beer, food, gas and other everyday items, rather than making an additional stop at their local beer distributor.
The upside for PA beer distributors is that sales have not yet been approved by the Pennsylvania Liquor Control Board, and Wawa officials have stated that they are currently only seeking approval at the Delaware County location.
Recently, the Pennsylvania Senate passed House Bill 189, which amends the Pennsylvania Liquor Code to permit wine producers to ship wine directly to Commonwealth residents and reduces the special liquor order markup for licensees. Before wine-makers can start shipping their wine, they will need to obtain a direct wine shippers license, which must be renewed on an annual basis. Once the license has been obtained, the licensee may ship an unlimited amount of wine to any Pennsylvania resident who is over the age of 21 for their personal use.
Of course, Bill 189 requires the recipient of the wine to provide proof of age prior to delivery. While the direct wine shipper must verify the buyer’s age in a manner approved by the Pennsylvania Liquor Control Board, the PLCB’s website does not yet provide guidance on the specific method to be used. Under the current law, customers are required to pick up ordered wine at a Pennsylvania Wine and Spirits Shoppe where they must provide proof of age and complete an affidavit attesting to the use of the alcoholic beverage by someone of legal age. The shipped wine must include a special label which states: “Contains Alcohol: Signature of Person 21 Years of Age or Older Required for Delivery.”
Direct wine shippers must agree to collect the 6% sales tax, any local sales taxes imposed by counties of the second class or cities of the first class, the 18% liquor tax and shipping charges on all products shipped into and within the Commonwealth. The markup on Special Liquor Orders is reduced from 30% to 10%, which means restaurants and bars will pay less when ordering products that are unavailable at the state store. The PLCB projects the reduction could reduce revenue by approximately $16,500,000 annually based on the $67,000,000 in special liquor orders in 2013-2014. The reduction could also mean a more extensive selection of wine and spirits in Pennsylvania bars and restaurants.
In Jim Jay Enterprises, Inc. t/a Thunder Rolls v. Pennsylvania Liquor Control Board,the Commonwealth Court of Pennsylvania addressed the revocation of a bar’s restaurant liquor license for failure to appropriately address security issues related to criminal/illegal activity at the licensed premises. Over the course of approximately two years, numerous altercations between patrons, both physical and verbal, were reported and responded to by local police, two incidents of drug activity, reports of gambling, and one incident of a minor entering the bar, occurred in and around the licensed premises. The licensee also had one adjudicated citation. When the licensee requested a renewal of its liquor license, the Pennsylvania Liquor Control Board denied the request on the basis that the licensee had not timely and adequately addressed the security and gambling concerns at the bar.
Despite a favorable result for the licensee on appeal to the trial court, the Commonwealth Court upheld the LCB’s decision not to renew the license based on the bar’s history of violations and its failure to remedy the same. The LCB’s decision not the renew the license hinged on the fact that the bar lacked proper surveillance and security personnel to control the fighting, public intoxication and other violations at the licensed premises. While the licensee did have some security in place – surveillance cameras inside the licensed premises, a list of banned patrons, and a bouncer/security guard on occasion – it was not enough for the LCB, which noted that the licensee failed to take “appropriate substantial corrective measures to address the problems and issues at its licensed premises in a timely manner.”
All licensees should note that, when addressing the renewal of a liquor license, the LCB has “the authority to consider whether a licensee has taken substantial steps to address [certain] criminal activity…” Further, if a licensee knows of illegal activity by an employee or patron, the licensee must take substantial steps to attempt to prevent the wrongdoing.
For many years, farmers have purchased brewers’ leftover grains to use as animal feed. This relationship is beneficial for both the environment and the parties – it allows the farmers to feed their animals at a reasonable low cost, and it gives breweries a way to dispose of their used grain. It’s a win-win for everyone.
Enter a newly proposed rule by the Food and Drug Administration (FDA) that could completely disrupt farmers’ and brewers’ harmonious relationship. On October 29, 2013, the FDA proposed a new rule to “Establish Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventative Controls for Food and Animals.” Under the proposed rule, breweries would have to adhere to the same new Current Good Manufacturing Practices (CGMP) that animal food manufacturers are required to follow, and which address the manufacturing, processing, packing and handling of animal food. The proposed CGMPs require covered facilities to maintain a food safety plan, perform hazard analyses, institute preventative controls for mitigation of hazards, and monitor controls, verify that such controls are effective, take corrective action to fix ineffective controls and maintain records documenting their corrective actions. With this new rule, the FDA hopes to reduce health risks to animals and humans by better regulating the handling of animal food.
So what does this mean for brewers? In order to continue selling grain to farmers, brewers would have to adhere to the new FDA regulations, and very likely increase the cost of the grain and/or their beer being sold. If too costly for a brewery, this could mean the end of sales to farmers all together and the disposal of the used grain without the ability to put it to another beneficial use.
For more information on Stark & Stark’s Beer & Spirits group click here.
If you’re liquor licensee in Pennsylvania, you’re likely subject to the Pennsylvania Liquor Control Board’s (PLCB) Nuisance Bar Program (“NBP”). The NBP was established in 1990 and is run by the PLCB. The NBP provides a method for the PLCB to manage licensed establishments that may have “abused” their licensing privilege. The program’s objective is to help licensees avoid being labeled as a “nuisance bar” by changing their business practices and to close establishments that are determined to be a “nuisance.”
Being considered a nuisance has, in large part, to do with the number of citations that an establishment receives. The Pennsylvania State Police Bureau of Liquor Control Enforcement (PSP-BLCE) enforces the Liquor Code (the “Code”). It is the PSP-BLCE that will issue citations for violations of the Code. Violations can include drug transactions on the licensed premises, serving after-hours or serving alcohol to minors. A licensee who receives a citation should contact counsel to discuss its options.
Licensees should keep in mind that the PLCB actively encourages the establishment’s neighbors and other concerned citizens to report suspected violations to the PLCB and local law enforcement. It’s also important to remember that licensees are required to renew their liquor license every two years. It is at the time of renewal that the PLCB will look at any citations received by, and any complaints made against, the licensed establishment to decide whether to renew the license. Using certain criteria, including, whether a licensee has received three or more citations for sales to visibly intoxicated persons, sales to minors, noisy or disorderly operations, after-hours sales, immoral conduct and/or entertainment, and the establishment being frequented by minors, the PLCB will determine whether a licensed establishment has abused the privilege of its liquor license. If it is determined that the licensee has abused such privilege, then the PLCB can suspend or revoke/terminate the license.
So, what does this mean for a licensee? Don’t be a nuisance. Follow the rules and regulations established under the Liquor Code. And, if you are issued a citation for a violation of the Code, contact an attorney who can help you handle the claim(s) accordingly, and in a way that protects your establishment’s best interests.
Sports stadiums and other event venues are there, predominantly, to hold events for the entertainment of their patrons. Many of these venues hold various liquor licenses and permits for the sale of alcoholic beverages on the premises. In order for a licensee, its servants, agents or employees to permit dancing, theatricals or floor shows of any sort, certain moving pictures, or moving pictures shown through machines operated by patrons by the deposit of coins, the licensee must obtain a special permit from the Pennsylvania Liquor Control Board to provide such entertainment. It is always prohibited for a licensee to permit any lewd, immoral or improper entertainment to be displayed in the licensed premises or in any place operated in connection therewith. While certain licensees are excluded from the special permit requirements, no licensee is exempt from the prohibition against lewd, immoral or improper entertainment. Licensees who permit such prohibited forms of entertainment to be displayed by performers in their venues are subject to steep fines and possible suspension or revocation of their license.
For more information on Stark & Stark’s Beer & Spirits group click here.