E-Malt.com News article: USA: Pennsylvania breweries oppose liquor privatization bill

Even as the state House of Representatives is poised to vote on a bill to put liquor sales in private hands, the beer industry is fighting the legislation, pennlive.com reported on March, 20.

Anheuser-Busch and MillerCoors, the two giants of the American beer market, have put their names on a letter objecting to the bill. The letter states that the bill as it stands now is “detrimental to the beer industry.” Combined, Anheuser-Busch and MillerCoors account for three out of every four beers sold nationwide.

The Brewers of Pennsylvania, an advocacy group for Keystone State breweries such as Yuengling, Troegs Brewing Co., and Appalachian Brewing Co., has signed onto the letter and distributed it to lawmakers. The Pennsylvania Beer Alliance, which represents the state's beer distributors, has also signed the letter.

In the letter, the brewers don't spell out objections to the idea of privatization itself. Rather, they say the bill as it stands would hurt the beer industry.

The brewers state that the legislation would hurt beer distributors and tilt sales unfairly to the wine industry. The bill allows for hundreds of additional wine and spirit licenses.

In the letter, the beer industry contends that the bill doesn’t provide a level playing field for beer sales in grocery stores.

Grocery stores would be able to sell unlimited amounts of wine anywhere in the store, the brewers say. Conversely, the bill spells out that beer sales would remain in a restaurant section of the store, and sales of beer would be limited to the maximum equivalent of a case (24 bottles).

The privatization bill “would create approximately 800 new 'Grocery Store' licenses authorizing the sale of unlimited amounts of wine anywhere in a grocery store and, thereby, creating a very uneven playing field in the grocery store segment,” the letter states.

“And because it pertains only to wine, there will be supermarkets where wine will be the exclusive alcohol beverage option and no beer will be sold.”

In addition, the letter states that the bill poses a threat to beer distributors, who may have to devote half their shelf space to wine and spirits. Some distributors say they can’t afford a costly expansion to maintain their current beer selection and add wine and spirits.

Beer distributors sell about two-third of all beer sold in Pennsylvania, so the industry is wary of doing anything to hurt distributors.

In a revamped liquor market, the question of shelf space could be even more important to the state’s smaller breweries, such as Troegs, ABC, Stoudt’s Brewing Co. in Lancaster County and Victory Brewing Co. in Downingtown. All are members of the Brewers of Pennsylvania.

The state’s microbreweries rely on distributors to reach customers. If distributors have to clear shelf space for wine and spirits, smaller microbrews could be the casualties.

Republican lawmakers who have pushed for privatization have insisted that privatization would lead to bigger business. They argue that the private industry would do a better job selling beer and wine and they contend that it’s time to get the state government out of the liquor business.

Pennsylvania’s business advocates, including the Pennsylvania Chamber of Business and Industry, strongly support privatization. They argue it will lead to more choices and convenience for customers.

Under the bill, beer distributors would get first crack at 1,200 wine and spirit licenses. After a 12-month period, the licenses would go up for grabs to the general public.

Beer distributors would also be able to sell beer by the six-pack and in growlers.


22 March, 2013