Pennsylvania beer laws change for the better, but one provision could hurt small distributors

Pennsylvania has a strong beer culture but some backward beer laws (hey, who’s perfect?). The Keystone State is an alcoholic beverage control state. Wine and spirits are only allowed to be sold in state-owned “Fine Wine and Good Spirits” stores, and beer may only be purchased from a restaurant, bar, licensed beer store or distributor. For decades now, questionable hurdles for both distributors and retailers in Pennsylvania have included: where alcohol is sold, when it can be sold and in what type of quantity and packaging it can be sold in.

So, it’s been exciting for folks to watch Governor Tom Wolf over the last two years work hard with Republicans and Democrats in the General Assembly to modernize the sale of liquor, wine and beer in Pennsylvania in order to bring the commonwealth’s booze system into the 21st century. On Nov. 15, Wolf continued his liquor reform in Pennsylvania by signing HB 1196, which allows beer distributors to sell six-packs (and other provisions) and thus should help continue improving the lives of everyone involved, right?

Well, a few parties feel like they’re getting fucked. Apparently, a provision in the bill could impact some small beer distributors who are in certain, unfortunate geographical locations — and some of those in a million-dollar way. The bill changes a Prohibition-era law that dealt with where and how brewers can sell beer in the sobering state of PA — especially if you live near wholesaler boundaries.

From an excellent article on the Allentown Morning Call:

Since the 1930s, brewers — from MillerCoors to Yuengling to Victory Brewing — can enter into private contracts with large wholesale beer distributors. The contracts give wholesalers exclusive territorial rights to where brewers’ brands can be sold geographically to small licensed retail distributors, six-pack stores, bars and restaurants. State law says the contracts are in perpetuity.

Territories can cover one county, multiple counties or the entire state. Small retail distributors are required to buy products from wholesalers in their region, but there is no provision against their reselling a wholesaler’s product in another wholesaler’s territory.

The law changes that. All businesses in the beer-selling food chain now are subject to the private territorial agreements between large wholesalers and brewers. So retail distributors are prohibited from buying from one wholesaler and selling to a bar or restaurant in another wholesaler’s territory. Those who violate the law would be subject to a 30-day closure.

So beer distributors in areas that straddle wholesale boundaries could lose business by being legislatively precluded from making deliveries to long-standing customers.

Watch this video. Casey Kopko and his family run Cascario’s Beverage in Pen Argyl, Pa., and Kopko says this provision could cost his company a million bucks. Wow and yikes. But let’s not lose sight: HB1196 also does a lot of good things. It includes improvements such as retail licenses that allow selling on Sundays at 9:00 a.m. instead of 11:00 a.m. It also allows beer and liquor to be sold before, during and after athletic events and consumed outside the club seating and restaurant areas (jeesh, that was illegal?). The law will go into effect in less than 60 days.