Over the course of the past year, buying booze in Pennsylvania has gotten exponentially easier. Amendments to the the Commonwealth’s labyrinthine liquor code have allowed for beer sales at gas stations, six-pack sales at beer distributors, shipments of wine direct to consumer addresses and — in the most drastic shakeup of the state monopoly so far — wine sales at grocery stores.
Will spirits be next?
A pair of matching bills now pending in the the state House and Senate would create a new category of license that would allow grocery and convenience stores to add hard liquor to their shelves.
“We have already expanded beer and wine with positive public reaction, this to me seems like the next logical step,” Pa. Sen. Randy Vulakovich told Billy Penn. The Allegheny County Republican is sponsor of SB306, the Senate version of the bill.
Rep. Mike Reese, sponsor of House counterpart HB438, agreed. “The primary focus is to provide to my constituents a one-stop shop experience,” said the Central Pa. Republican.
Both bills were originally introduced last year, but it was too late in the session to hold meaningful hearings or take action, according Pa. Rep. Adam Harris, chairman of the House Liquor Control committee. As the legislature gears up to address this year’s budget shortfall, it’s likely these measure will be given a closer look.
“We had a meeting this week with our leadership team about getting some liquor bills — ones that generate revenue! — moving,” Harris said, noting that he had arranged for committee leadership to meet to “report out Rep. Reese’s bill” at 11:30 a.m. on April 3.
“Now that we are in a new session, we do plan to make further improvements and move the industry further into the private sector,” confirmed House Speaker Rep. Mike Turzai, a co-sponsor of Reese’s bill.
As currently outlined, the new “spirits expanded permit” would be available for an application fee of $2,000 to establishments that already sell booze for off-premises consumption. These funds, along with the annual renewal fee of 2 percent of total spirits purchases, would be deposited in the State Stores Fund and then go toward the General Fund.
Of course, while the State Stores Fund would gain income from these new fees, it also stands to lose income if people decide to buy their liquor at a grocery store instead of at a Fine Wine & Spirits store. Earlier this month, the Liquor Control Board told the Pittsburgh Post-Gazette that it was seeing lower rates of wine sales growth than projected before the change.
That doesn’t mean state store retail wine sales have dropped, though, said communications director Elizabeth Brassell, who confirmed to Billy Penn that they were still growing, just at a slower rate. It also doesn’t mean wine in grocery stores are having a negative impact on state funds.
“We are selling wine to an entirely new class of customer — grocery stores and convenience stores buying significant quantities of wine at wholesale,” she said, “so the wine market has likely expanded, overall.”
Similar to the expanded wine license, the new spirits license comes with volume limits attached. At grocery stores, consumers would be able to purchase up to 3,000 mL of booze (four regular-sized bottles) at a time.
Sen. Vulakovich’s office has not yet generated what’s called “a fiscal note” on the expanded spirits permit bill, so the senator couldn’t provided an estimate for the potential revenue increase. However, he does believe it would end up being be a net positive for state funds — in part because it provides convenience.
“Having a taxable item like spirits available with wine and beer in a place like a grocery store would, to me, increase the likelihood of added revenue,” Vulakovich said. “People move at a much faster pace than 10-20 years ago, if you have young children who are involved in activities or are have other involvements your time to shop is limited. Not everyone has time to stop at a State Store.”
And grocery stores are psyched.
“In general, our customers like the convenience of one-stop shopping, and we would embrace any legislative changes that allow us to sell products that our customers want,” said Kerry Shepski, marketing team leader for Whole Foods. Her company does offer hard liquor in several other states, she confirmed.
“We’re firmly of the belief that pairing wine, beer and spirits is a part of crafting food experiences. We are surely supportive and bullish on such bills,” offered Sande Friedman of Philly gourmet grocer Di Bruno Bros., which recently added wine to its lineup.
So far, only Republicans have signed on as co-sponsors for SB 306 and HB438. But legislators are optimistic that they’ll be able to evince support from colleagues on both sides of the aisle.
“Obviously the idea of liquor privatization was initially pushed by Republicans, but our more recent modernization initiatives have been supported by both Republicans and Democrats,” Sen. Vulakovich said.
In the House Liquor Control committee, there’s been a more progressive, conciliatory tone ever since Rep. Harris and co-chair Rep. Paul Costa (D-Braddock) began working together.
“One similar idea we seem to be in agreement on is the possibility of doing privately owned ‘franchise stores,’” Harris noted. This concept, which hasn’t yet been drafted into a bill, will be discussed on April 3 along with the expanded spirits permit.
“I look forward to working with Paul, our committee and the entire House to both improve customer convenience here in PA,” Harris said, “while hopefully closing our budget shortfall at the same time.”