Monday, November 12, 2012

The Beer Law Forum at Yards last week

As I warned you, we had another Beer Laws Forums at Yards Brewery in Philly last Thursday, set up by Philly Beer Scene. Senator Chuck McIlhinney was there, as were Bill Covaleski, of Victory Brewing Co., representing the Brewers of Pennsylvania, and Mike Gretz Sr. of Gretz Beer Distributors, representing things from the wholesalers point of view. I was on the panel representing the drinkers, and Tom Kehoe of Yards moderated. 

This was quite timely. Senator McIlhinney is going to be the new chairman of the Senate Law & Justice Committee (which handles liquor control), and to have him this engaged was great. He's obviously actively seeking input on this. We went right to him out of the box, asking why we had no sixpack sales in beer distributors. He started going off about grocery stores and the three tier system, and I interrupted him to explain that we were talking about the case law: why can't beer distributors sell beer by the sixpack? It would seem to be pretty simple.

But that set the tone for the whole night, and a frustration that has become familiar to those of us who want to rewrite The Almighty Liquor Code. It's because, he said, there are 22,000 licensees (tavern and deli licenses and such) in the state who don't want to lose their sixpack business, and they all vote. It quickly became apparent from audience comments that their employees vote too. But what about us, I responded: there are millions of us, and we vote. How can we make that important? It was a question we tried to get answered all night; we got something toward the end.

That led into a fairly simple question by Tom Peters at Monk's Cafe: if a beer is not registered in the state, and they want to get it in for a trial run, or a special event, is there some way to get it in without giving all the distribution rights to a wholesaler? Mike Gretz took that one and seemed to be saying that you could already do this under current state law (but several people in the room who are quite conversant with The Almighty Liquor Code told me that this was simply not so; I'm not sure). 

(Gretz took the opportunity -- as he did at least one other time -- to speak about the family businesses wholesalers represented (and the jobs), and the almost sacred trust of controlling alcohol abuse. I didn't agree with some of it -- it's just a defense of the three-tier system that wholesalers have been using successfully for years -- but I'm not insensitive to it, either. It's just that I can't help noticing that other states have sixpack sales AND sales in grocery stores, and there are no roving gangs of boozed-up semi-zombies there. Food for thought.)

Tom Peters would be quite vocal in support of the tavern owners' interests (understandably so) through the night. What are the tavern owners' interests? They have an asset -- their license -- that is quite valuable, worth tens of thousands (or even hundreds of thousands) of dollars, and they don't want to see anything happen that will decrease the value of that license. Beer distributors selling sixpacks will cut into their sixpack business. Well...maybe. But the grocery stores that bought bar licenses to sell sixpacks are cutting into it now, and the fact is that for most licensees, sixpack sales are a tiny part of their income. Even those who have used their license to run sixpack stores would probably be able to compete, though with lower markup and more effort. But if they're going to give that right up, they want something in return, and where politics and the art of the possible will come into play. 

And that is why we have no sixpack law, because the tavern owners haven't been happy with any deal they've been offered. I get that it's their family business, their livelihood, but...we vote too. Maybe, with an activist leader coming to the committee, it's time to cut that deal.

Speaking of cutting deals, we did get into privatization. The senator is backing a plan to sell wine and spirits by the bottle for takeout at bars. The licensee would pay a $10,000 annual fee for that right (this would obviously lead to the equivalent of specialty bottleshops like The Foodery, but for wine or spirits, or both). Tom was skeptical; many places don't have the room for the inventory that would require. Well, then don't get the license, or figure something else out: if there's money to be made, people will figure out a way to make it

That's 22,000 possible additional liquor stores, of course, and that sounds interesting, until you understand that the Senator's plan still has the PLCB as wholesaler. So there's your selection, shot in the arse. Although who knows, if they don't have to figure out how to sell it, maybe they'll actually get some good stuff in? Thing is, we don't know, and that's when I blew my top and started shouting. I thought this was an idiotic plan -- I still do -- and that it's not really what we want, which is privatization. I calmed down, embarrassed, but still angry.

Then the Senator pointed out that while he would like to replace the state stores with private outlets (that's a paraphrase, I didn't get the exact quote, but it's very encouraging from a state senator running Liquor Control), we had to realize what he had to work with. "40% of the townships in Pennsylvania are dry," he said. Let me repeat that: Senator McIlhinney said, "40% of the townships in Pennsylvania are dry."*

That may seem crazy in 2012, but consider. NONE of the townships in the five counties in southeast PA are dry, so we're not the best judges down here. I do know of dry townships where I grew up in Lancaster County; they're still out there, and they don't go wet. As the senator said, increasing the number of licenses sounds great to you here, but when he goes out and to try to convince a senator from Adams County (west of York) on this, he doesn't get a lot of support from the area. It's pretty rural, pretty conservative. 

I think that was when we got a great comment from the audience: If alcohol is so important and dangerous that you can't privatize it, why are we privatizing schools? The wholesalers and tavern owners talk about family businesses, my parents are educators, this is my family business, and you're privatizing the education of your children. If you can do that, why not wine sales? The Senator denied that schools were being privatized -- maybe not up where he is, but in Philly they were -- and the whole thing got a bit disjointed, but it was an excellent point. It also underscores that most of the arguments against privatization are about union jobs and tax revenue, not health and safety.

We decided it was time to wrap things up, so we asked the Senator: what do we do to get through to our legislature that we want this to happen? Show up at things like this, he said: done. Write to your legislators: do it. What about other legislators? He kind of chuckled: you don't vote for them, so they won't really be impressed. Maybe, can't hurt (I wrote the governor, too, BTW).

The thing get their attention, you have to write often, and there has to be a LOT of you. We are going to have to organize, and as this is all going to start up again in February, and we don't even have buy-in on what it is we want...that's daunting. So by the end of the week: I'll have a punchlist of what it is we want. We'll go from there.

Remember: Privatization IS Modernization; an End to The Case Law.

Note that this 2009 newspaper piece gives a number of 28% of the townships and municipalities as dry, and 12% of state's population lives in them. Even though that's less than 40%, it's still a lot.


Anonymous said...

There can be a few municipalities in a township so the total can be lower then even what you listed.

Lew Bryson said...

Yeah, I think this is a soft number that can be manipulated to suit different purposes, but...fact remains, there are a SIGNIFICANT number of dry townships/towns in PA. And those folks do get motivated and vote, whereas the wets -- just like in 1920 -- generally don't. It's not because they're not good people, or really believe in their cause, it's more that they can't believe anyone else would give enough of a damn to do anything about it.

Rich said...


First of all, Mcilhinney could care less about the 22,000 votes, what he cares about is the money that the tavern owners donate for keeping the status quo.

Second, I know what I want regarding both the case law and privitization. For the case law, I want it to go away, period, no restrictions on qtys for anyone with a license, sell as little or as much as you want. Also, the stupid label registration system needs to go away, its pointless.

For privitization, we need to allow for package stores, beer, wine, liquor in one store. We need NO limitation on the number of license, as soon as you put limits on them then there is corruption and patronage, no limits, you pay the fee you get the license, period. We also need control on taxes, do all this with no tax increase, don't mess with the current system, just keep the 18% tax, no gallonage tax.

It just needs to be passed so we can move on. This is rediculous.

Lew Bryson said...

Attaboy, Rich!

Endless said...

Lansdowne pa is dry

Lew Bryson said...

I knew I shouldn't have trusted a State Senator. Thanks!

John Rz said...

Lew, I don't know who told you what but the Senate doesn't have a liquor control committee, only the house. That committee will once again be chaired by Rep. John Taylor.

Lew Bryson said...

Thanks for the catch, John; just got the Senate and the House confused. Not being a full-time lobbyist, it's not something I have at the tips of my mental fingers.