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Beer retailers selling wine?
HARRISBURG — A state House committee Tuesday radically changed Republican Leader Mike Turzai’s proposal to eliminate the state Liquor Control Board and privatize the 620 state-owned stores that sell liquor and wine.
Instead, it substituted a proposal to keep the state store system and allow beer distributors for the first time to sell wine.
And yet just after the House Liquor Control Committee’s 15-10 vote Tuesday, Mr. Turzai had favorable words for the far-reaching changes, saying the Republican-controlled committee “acknowledged the current state store system is broken and beyond repair. This is a huge step for Pennsylvania consumers.”
While the committee’s bill differs drastically from Mr. Turzai’s original House Bill 11, Turzai aide Steve Miskin. said: “This will be the first time since Prohibition [ended in 1933] that a liquor privatization bill has been voted on by a House committee. It’s progress.”
Wendell Young, president of the union that represents 5,000 state store workers, was a strong opponent of Mr. Turzai’s original bill to lease liquor stores to private owners. He still wasn’t happy with the changes enacted by the House committee, even though they gutted the Turzai bill.
“Privatization is something we will always oppose,” he said, but the committee’s amended bill “makes drastic changes to the way beer and wine is sold in the state.” Instead of a quick death, as would have happened under the Turzai privatization bill, “This new bill gives us a death of a thousand cuts,” Mr. Young said, by slowly taking business away from state stores.
Mr. Young feared state stores would lose wine sales and could lay off workers.
The most radical aspect of the sweeping amendment — proposed by Rep. John Taylor, R-Philadelphia, the Liquor Committee chairman — would allow the state’s 1,200 beer distributors to sell wine to the public. The 620 state stores would continue to sell wine and liquor, greatly expanding the places where consumers can buy wine. Beer distributors could sell only beer and wine, not liquor.
Mr. Taylor proposed his “gut and replace” amendment, as it was called, because he couldn’t support Mr. Turzai’s plan to eliminate the LCB’s 620 stores and lay off its thousands of unionized workers.
“I was never in favor of dismantling the Liquor Control Board,” said Mr. Taylor.
He said the amended bill now goes to the House floor for debate and possible additional changes. It could come up later this month or in late January.
A license to sell wine would cost $50,000 initially with a $15,000 annual renewal fee.
However, the value of such a license held by a beer distributor likely would rise — due to the new ability to sell wine — and the distributor licenses likely would be bought by large supermarket chains, such as Giant Eagle. They would, for the first time, be able to sell beer and wine at their grocery stores — although probably in a separate part of the store. About 100 supermarkets in the state have permission to sell beer, Mr. Taylor said.
At four hearings held around the state this year, he added, the committee got conflicting and confusing information about how much money the state would get from privatization of state stores — some said between $2 billion and $6 billion, but others said much less. Mr. Taylor said he wasn’t convinced such a sale would benefit the state financially, and said it would cost several thousand LCB employees their jobs.
His amendment would preserve the LCB’s current 30 percent markup on wine and liquor and the 18 percent Johnstown flood tax, which Mr. Turzai wanted to eliminate.
The amended bill also makes several other important changes, such as allowing beer distributors to sell six packs (now they can only sell by the case); allows bars and taverns to sell 30 packs, not just one or two six packs; lifts the current limit of 25 percent of state stores that can open on Sunday; and lets their Sunday hours be 9 a.m. to 9 p.m. instead of the current noon to 5 p.m.
Amy Christie of the Tavern Association didn’t like giving beer distributors the right to sell six packs. She said that would hurt taverns, the only ones who can sell six packs now.
The Commonwealth Foundation, a conservative think tank, favors elimination of the LCB stores and wasn’t pleased with the Taylor amendment that preserves the LCB. It said state government shouldn’t be in the business of selling alcohol, a stance that Mr. Turzai and Gov. Tom Corbett have taken.
The amended bill “does nothing to address the dangerous conflict of interest that sees government selling both the ailment (i.e., alcohol) and the cure at the same time, all on the taxpayer dime,” said foundation official Jay Ostrich. “It’s time that government stops creating more problems by picking wine winners and liquor losers, because taxpayers and consumers are tired of picking up the tab.”
Since most of the House’s 91 Democrats are opposed to the GOP measure, almost all of the 112 Republicans would have to vote for it to get the necessary 102 votes to move it to the Senate.
All About Beer with Bill & Sheila
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