Saturday, March 6, 2010

The Memphis 44 Resurrection Raids: and why you should care

This past Thursday the Bureau of Liquor Control Enforcement and the PLCB carried out three simultaneous raids on Memphis Taproom, Resurrection Ale House, and Local 44. The raids were the result of a complaint that the three bars were selling beers that are not registered with the State. (No one has, at this point, stepped forward to take credit for lodging this complaint; I'm assuming that they're hiding behind "Anonymous.") Each bar was visited by five armed officers -- again, simultaneously, presumably so no one would call the other bars so they could somehow hide cases or kegs -- who proceeded to check beers against the list of registered brands, and confiscated ones they couldn't find on the list. They evidently didn't look too hard: Brendan Hartranft, owner of Memphis, told me yesterday that they seized bottles of Duvel, a beer that's been imported into the US for over 30 years, and is clearly on the list.

I'm an old fart, so when I heard of this, I immediately thought of the raid on The Farmhouse in Emmaus, about 15 years ago. In that case, the folks at the Farmhouse -- which was quite the advanced beer spot in those days -- were doing a series of beer dinners, and had scheduled a winter beer dinner. Traditionally, the holiday beer dinner is the one where you pull out all the stops, and they wanted to have beers no one else had. They tried doing that the legal way -- by getting the beers registered -- but the PLCB dragged their feet and wouldn't clear the paperwork. Finally, the decision was made to get the beers without registration -- maybe not the best idea, but there you are -- and the result was that in the middle of the dinner, over 50 guests were shocked to see three carloads of armed BLCE march into the dining room, where one of them loudly proclaimed "This dinner is OVER!" The guests were asked to leave, and The Farmhouse was shut down for a full inventory of their alcohol. Other than the one unregistered beer...nothing was found. The manager told me that when the head enforcement agent left, he stopped long enough to shake his finger in the manager's face in rage, and yelled at him, "I know you have untaxed alcohol in here, and I'm going to find it!" He never returned.

So what's this tell us? First, that the PLCB is incompetent. Beers were seized at the three bars that were on the registered list, and I know of at least one beer that was not registered that was not seized at any of the three bars. As co-owner Leigh Maida said, "Some of what they confiscated at one location, they left alone at another. Some of what they took is listed plain as day on the PLCB list of registered beers." Brendan told me he does not intend to take back the beers that were wrongly seized. "I don't know what they've done with them," he said. "I don't even know they're my beers."

Second, that the PLCB has no sense of proportion. This violation is approximately equal to a parking ticket -- unregistered brands, for crying out loud? -- but they put fifteen officers on it for three hours, and who knows how much preparation time. Meanwhile there are countless nuisance bars, there are bars serving mislabeled liquor, there are bars all over Pennsylvania where patrons are being overserved...and they blew hundreds of dollars of our money out their butts following up an anonymous tip that someone was serving "unregistered brands"? Come on, guys: if you had the cyber-brains the Bensalem cops have, you could be cruising BeerAdvocate or Facebook and picking up a case like this every week! Seriously, just checking out BeerMenus.com would probably make your quota. But then you wouldn't be available for some "anonymous tipster" to launch you against someone they want to screw, so forget that, right?

That's a direct lead to Third, the idea that someone -- oh, let's say it: that some rival bar or restaurant owner, or maybe a brewer with their nose out of joint (An anti-Memphis44Resurrection commenter at Uncle Jack's site notes "They [Brendan and Leigh] started all of this when they drove to Baltimore to pick up an illegal keg and thumbed their noses at the local brewery" (and there have been suspiciously similar comments made in a number of Philly blogs/forums over the past six months). Which local brewery is left as an exercise for the student...) would deliberately rat out another small beer business leaves a very bad taste in my mouth. That's nasty. That's low. That's...shitty. And there's no excuse for it. None.

Which leads us, however, to the big one, Fourth: this is clearly a violation of PA liquor law. Just take a look, right here, and you'll see it's number 9 on the list of UNLAWFUL ACTIVITIES. There's not even any wiggle room here: "It is unlawful to sell, offer for sale or deliver any brand of malt or brewed beverages unless such brand has been registered by the manufacturer or franchised agent thereof with the PLCB." Period. If sale or offer of an unregistered beer has taken place, a crime has been committed. If you sell a beer without the proper paperwork being filed and approved and the $75 fee paid, you're in the deep stuff. It doesn't matter that many many bars and distributors across the Commonwealth are doing it all the time -- and they are, I know it, they know it, and God bless them, because the beer's good -- it is breaking the law.

Well... Why? Why is there a law? I think we're assuming that this is a tax issue. If a brand isn't registered, tax is not being paid, and nothing gives state booze agencies the giddy-up quicker than the thought of losing some pennies (we are talking about pennies, too: PA does have one of the lowest beer taxes in the country). But that's not what's happening in almost every case. The beer's going through channels, tax is being paid, it's just that the state doesn't even realize that it's being paid tax on unregistered brands. (If you're guessing that the state doesn't really care, so long as it gets its taxes...you're right.) It's not even the $75. The real problem is that the state wants the paperwork done, and the fee paid, even for brands that come in once a year, in tiny amounts -- again, no sense of proportion -- and the paperwork takes too long to clear (stop me if you've heard that before).

So let's say it. Brand registration is bullshit. It's a pain in the neck in a state liquor authority full of pains in the neck. Bring the beer in, pay the taxes, sell the beer to the customers. Done. Who needs the registration step? If every beer is taxed, the state gets all the tax revenue, and there is no incentive to break the law because the PLCB is being a pain in the ass with paperwork.

The real problem here is not the PLCB, of course. They went over the top with this one, and they cheerfully allowed themselves to be used as some assclown's goon squad -- which is really troubling -- but they were just following orders. Who gave the orders? The Pennsylvania Legislature, which continues to balk at simplifying and rationalizing The Almighty Liquor Code.

People have suggested sending your complaints to the PLCB through their comment address. You can do that, it's here: RA-LBconsumer@state.pa.us. But who you really should send your comments to is your state legislator. Ask them why brand registration takes so long and costs so much that it discourages businesses from registering. Ask them why brand registration is even in The Almighty Liquor Code. Ask them why the PLCB saw fit to mount such a ridiculous raid for such a pointless infraction. And be sure to ask them why the PLCB would disrupt a business on the word of an anonymous tipster, when that's a practice that's just ripe for abuse.

This is bad enough as an isolated incident. But it speaks volumes about how backwards booze law is in PA, and about how badly it is enforced. Simplify the Code. Abolish the PLCB.

39 comments:

Rick Lyke said...

Four questions for the heroic raiders of the lost beer:
(1) How did your actions protect the citizens of the Commonwealth of Pennsylvania?
(2) Are 100% of taxes collected on registered beers?
(3) Does registering a beer suddenly make it "safer" for consumption?
(4) What would you be doing if you were not on the raid? (My guess is sitting behind a desk surfing the web.)

Gregg said...

Nice column Lew; it would make a good op-ed in Harrisburg's daily fishwrap if you want to replace a few of the more colorful descriptors.

Joe Roberts, CSW said...

What this tells me is that some cops were thirsty for Duvel!

Syllogism said...

Does anyone know of a beer that has been rejected for registration? Is this the process that they worry about the NAME of the beer... decide whether its actually a beer or liquor? Approve the label of a beer? I would love to see what the registration looks like, and would love to hear/read an interview with these paper shuffling tools!

Lew Bryson said...

No, this is the process where they take forever to process the paperwork and charge you $75 for the right to sell your beer in Pennsylvania. I'm going to follow-up on this, and I hope to interview someone in Harrisburg about it.

sam k said...

"...some assclown's goon squad!" Brilliant, and speaks volumes. These guys think they're Eliot Ness. Carrying unconcealed firearms into this confrontation unnecessarily escalated the tension and potential danger.

Remember what happened to the ATF at Waco? Not quite the same, but not too far out of the realm, either.

Totally unrelated (sorry), but try to get a response from the PLCB by filling out one of the comment cards available in the state stores. They ask for your contact information if you'd like a response to your comment.

I've sent two, one through the mail a year ago, and the second hand-delivered by my local store two months ago. Still waiting.

Why do we permit ourselves to conform to a system that seems more in touch with cold war-era East Berlin than with American free commerce in the twenty-first century?

Chuck Cowdery said...

I wouldn't expend too much energy worrying about the tipster. The need to tie an enforcement action to a complaint is boilerplate and not how it really works. The raid was conceived by the regulators to send a message.

Lew Bryson said...

Not so sure about that in this case, Chuck. This situation's been fulminating for months, and it's come to a head.

As Brendan said; do these guys really want to screw with a guy who's opened three successful restaurants in under two years? "I mean, I never sleep! How do you get ahead of a guy who never sleeps?!"

Anonymous said...

Lew for your interview...it would make great TV...you should hire a camera crew!

Rich said...

BTW...if they bought the brands from a distributor, shouldn't they raid the distributor? The distributor should be the ones making sure that what they pass along to consumers is "legal" and "registered". Does this mean if I walk into a distro and buy a case that is not registered that the PLCB could raid my house??? I'm scared now.

Lew Bryson said...

They won't raid the wholesaler; where's the fun in that? Wholesalers are really big and have lawyers ready to take on bullshit like this.

No, actually, they don't raid wholesalers because until they go to the retailer, they don't "know" where the unregistered beers are coming from. Then they find out who sold them, and backtrack. Is this a good argument for registering brands, so they could backtrack and raid wholesalers? Well, no...because the only crime it would be good for is selling unregistered brands, so that's pretty damned circular.

But you have nothing to worry about, Rich. They won't raid your house, because it's not illegal to have unregistered beers, just to sell them. So you're probably fine. Probably.

Anonymous said...

I agree that this is a major waste of the tax payer dollar and does nothing for public safety. However the tap room was bragging about getting beer illegally that is a clear (unfair) advantage to their business. If I was their competitor and I'm working my butt off to have a great bar the legal way I would be pissed if my competitor acquired beer illegally. When you break the law and then brag about it your asking to get raided. It sounds like Brendan got whats coming to him. I'm all about rational open liquor laws but until they are enacted you have to play like the other kids.

Lew Bryson said...

You know, Anonymous, that sounds good, but it doesn't wash. This is the same song that's being sung on every booze/food blog/bulletin board in Philly -- sung solo, I might add -- but it's all about ONE KEG OF BEER. A keg that Leigh and Brendan have already admitted publicly was a mistake, that they've paid for, that the State already cited and warned them about. It's over. It's done.

Meanwhile, bars across the whole STATE are serving beers that are not registered (I know they are, and I'll be drinking them this week when I go to Pittsburgh)...and these three bars get singled out? And on such a tiny, "who cares" violation?

Get real. Taxes were paid on these beers, and they were bought from their wholesaler. Who's not playing by the rules? Your argument is so full of holes I could strain soup with it.

TJ's said...

"Taxes were paid on these beers, and they were bought from their wholesaler. Who's not playing by the rules?"

Cheers to that Lew!

Brendan said...

it's a vendetta by the PLCB against Brendan harntranft, settling a score. As detailed at this blog and at the Philly Weekly, which did a huge cover story on the neanderthal PLCB, BH has baited them in the past, he continues to speak out against the corrupt and incompetent racket, and he made their whole organization look stupid.

So IMO, this is the PLCB trying to have the last hamhanded laugh. i predict it backfires.

Brad said...

Lew/Rich,

But the distributors are still selling or offering to sell the unregistered brands, so it would appear they, like a retailer, are running afoul of the code. I get what you're saying about power and lawyers, but from a purely rational standpoint, it sure would be a lot more efficient and sensible to find out which wholesaler sold the forbidden beer, and go there to round up all the bad beer and not just what you can snag from a bar or two.

I don't even live in PA but after I read the Daily News article I called and left a message with the enforcement board to tell them how ridiculous they look for not even having the competence to properly conduct their raids.

I just hope everyone expressing outrage in the comments section over on Philly.com also put forth some of that effort toward contacting their elected representatives.

Lew Bryson said...

No argument, Brad. There's more than one wholesaler involved, and even the PLCB should be able to follow-up and figure out who sold the beers. I doubt this is over. I just hope the rage from consumers over this out-dated and unnecessary registration issue stays hot.

Anonymous said...

I think if Brendan and Leigh have to get named, the other side ought to get named, too. It's potentially devastating to their businesses, and I think their lawyer should demand the name of the "citizen" so there's someone to sue.

Oh and also the PLCB should be dissolved for matters such as this. They're highly incompetent.

Steve Hawk said...

Hey Lew, reading further into that Unlawful Activities list - there is so many ridiculous laws I never even knew about. Advertising strength of beer and advertising without sufficient quantity - to happy hour laws. Wow what a mess. This whole thing is like reading one of those old marriage handbooks from the 20's... and I'm pretty sure #23 is aimed directly at me . -"It is unlawful to hawk"

Lew Bryson said...

Steve, the very best possible outcome of this situation would be for everyone to do what you have done. The Almighty Liquor Code is full of this kind of thing. It needs an enema.

Xtian said...

The suggestion to contact your legislators is an excellent one. If you need to find out who they are, or need their contact info, go here:
http://www.votesmart.org/search.php

Anonymous said...

I'm a PA expat living in the evil (in terms of sports) NYC. One of my friends pointed me here. I use to do some bartending in PA and developed a quest for the good beer. I felt like I came off the mormon compound going into bars, talking to the owners and even going to the grocery store. This should be a rallying cry for the beer community. Yea, it sounds like Brendan broke the law but if they made logical laws maybe they wouldn't be broken. Can someone make up a form to hand out at bars that petitions the lawmakers? Surely the more attention this gets the more people will rally for sensible liquor laws. Has anyone contacted the local NPR stations, it sounds like a good local interest story? Good luck and hopefully the next time I'm in PA I can raise a pint of newly legal beer.

Anonymous said...

It wasn't until I moved from PA three years ago (after living there for my first 44 years) to Massachusetts that I discovered how the rest of the world lives. Instead of buying a case of beer only I can buy one bottle, or a six pack or a mixed six pack. And at the convenience store or grocery store - and wine too! And the selection is HUGE. Time for PA to adopt the way most of the rest of the states in the USA work.

Lappy said...

I agree with the comment about the blind eye turned to the distributors. If you buy a product from a legally operating business don't you have the right to believe its legal? A lot of bars carry unregistered brands and have no idea they're doing it. It's like walking into CVS and buying cold medicine and then getting busted outside for possessing an illegal drug.

Bryan Kolesar said...

That's a good one Chris. This case is certainly shining a light on Distributors, the role that they play, and the potential for them not fulfilling their contractual and ethical obligations. Though, as the bar owner, if there's a list out there (the integrity of which is rightfully in question), I would want to know whether the products that I'm selling are on that list or not. Now maybe I won't check it every week with every new release....or maybe I will. It's not a 5 minute job, but it shouldn't be a 5 day job either. If I know that there's the potential for trouble and there's a list that could be used against me, if I don't have time to do it, I'll delegate to an employee who might be looking for a couple of more hours of work a week.

On a related note, the level of disorganization when it comes to information management that I've seen in the industry is astounding. Particularly at the distributor level and organizations whose "job" it is to collect information about the industry. (don't misconstrue this as a blanket statement about all). The format in which spreadsheets are kept that I've seen, for example, allow me not to be surprised when things play out here as they have in this case related to misinformation, miscommunication, etc.

Boto said...

Sometimes I think Connecticut is worse than PA. Our rules are so ridiculous that brewers regularly avoid our state. There are a series of "Bad Elf" beers that have come out over the last few years. They tried to have their beers approved in CT. They were rejected because of the cartoon elf on the label. It might entice children to drink was their logic. It's no wonder why many brewers don't even try here. I drive to Mass on a regular basis to buy beer. BTW, I am a PA expat. I am amazed that I found a state that is in many ways worse than PA for obtaining beer!

Tenacious said...

I read the daily news article today where I work-a beer distributor in PA. Just by the facts laid out in the story, the PLCB could raid our store. This sounds like some type of vendetta. Either the PLCB doesn't like Brendan, or like you said it's some brewery that was scorned. Either way it's bullshit. What idiots these cops must have been. I wonder if they think they are serving justice?

Marty said...

Well Lew, its a good reason to be a homebrewer. But as in Philly, here in the Burg' there is 7% sales tax along with (and I am sure you will love this when going to the Church, Sharp Edge, Haufbrauhouse,ect) a 10% pour tax added to each booze you purchase in this fine county. Having been to other states and many AHA confrences, seeing how other states get so many more choices is just depressing. And when you try to explain to them what we have to go through to get booze, they give you that puzzled dog look and I think they just feel sorry for you.

My beers are unregistered, but then I cant sell them either. I tried to see when brewers that I met at conferences would have thier beers here. Some said they were trying, others just laughed. I think I will go to Ohio or Maryland to get the beers, but Maryland is talking about a whole new round of tax increases on booze. So it looks like those of us who like to have a drink are going to be looked upon to save the masses from government and mis-management.

Rich said...

We should just all fight for a unified system at the federal level. Wouldn't it make things a lot easier for the breweries if they had to go through one approval process and then that's it, they didn't have to do it for all 50 states. It sounds ridiculous to me. Not that I'm for any kind of control to begin with, but if there is control it should somehow be unified...wouldn't that make sense?

CLBetley said...

I am not a lawyer, and agree that a unified federal standard would at least be a good start at simplification. But http://en.wikipedia.org/wiki/Twenty-first_Amendment_to_the_United_States_Constitution seems to suggest that the terms of repeal of Prohibition gives all states the right to do as they please with regulation of alcohol, regardless of how silly it is.

So changing that would require yet another Constitutional amendment.

Lew Bryson said...

CLB has it right, Rich: it will be much easier to rewrite the PA Code than to get a combined federal booze standard. States will fight it, anti-booze outfits will fight it. It won't happen.

Jay Zeis said...

Do you know what the punishment would be? Is it a removal of the liquor license or a fine?

)Sorry if it was covered earlier and I missed it)

Lew Bryson said...

Wasn't covered, Jay, and it's a good question: no one appears to know.

Rich said...

I'm not saying that a unified system would be easy, heck, just trying to get something going in PA is tough enough...I also don't necessarily agree with it and I understand that the 21st give's the states the power. HOWEVER, don't you think that ONE unified registration system, that is OPTIONAL (but encouraged) for states to adopt would make things easier for the brewers and distributors. Heck, if a brewery could register beers in 25 states in one shot you bet they are going to do it. Plus, it would encourage other states to join as they lose brands.

Lew Bryson said...

Actually, Rich, I really like that voluntary uniformity idea. That's worth looking at. Thanks!

Jeff Rosenmeier said...

"The manager told me that when the head enforcement agent left, he stopped long enough to shake his finger in the manager's face in rage, and yelled at him, "I know you have untaxed alcohol in here, and I'm going to find it!" He never returned."

Craft Beers of Mass Destruction!

North said...

A unified federal system? Think back a couple of years to when homebrewing was illegal. With a federal system it still would be. Creating such a system would ensure that no state could take the lead, paving the way for the less creaive legislators to follow. Tying the leaders to the laggarts is rarely a productive step. Plus, do you really trust the feds to get it right?

EastEndBrewing said...

Registration is in reality, a rubber stamp process. I submit out Fed label approval with a relatively simple PALCB form, along with $75 per brand, and in a bit, I get a letter saying it's been added. Sometimes they butcher the names a bit, which scares me in this context, looking at the great Duvel registration screwup of 2010, but what can I do? Take my business to another state?

A larger problem for us is we brew a LOT of small brands in teenie tiny quantities. Sure, it's more admin work, and more $75 fees, but the bigger thing is timing. Say I release a new one-time-only, small batch, hand bottled beer in December, just before the holidays. Let's say all the bottle shops buy it up, and because it's a bigger beer, some tuck some away for cellaring long term.

So how long do I need to keep re-registering this beer? Until I run out and stop selling it to consumers here at the brewery? Until my distributor runs out of it? Until every single bottle shop that's gotten some has sold their last bottle? How many years might that be, and how in the heck do I know who's been keeping what in their secret stash?

I actually see some value in the state knowing that the label has met Federal approval (though I suppose the Feds already have that part covered... protecting the consumer from bogus label claims and the like), but the system is based on big breweries that make one, two, maybe three kinds of beer per year - just like it was in prohibition-era US, which is exactly when this outdated code was written.

Anonymous said...

East End brings up a great point! If its on the Brewer [Supplier] to pay the yearly registration for aged cellar beers, then the brewer has to be able to formulate, and then state in writing on the bottle, some kind of aging boundary line per beer.

Please..it would be helpful regarding people who hoard...seriously, I know a couple people who have this problem and I want to help them be able to pour something out well past its prime. Thank you.