Beer wholesalers in Pennsylvania take a stand against privatization of state

Beer wholesalers in Pennsylvania are speaking out against ending the state’s longtime liquor monopoly.

In a letter sent out earlier this week to members of the House of Representatives, the Pennsylvania Beer Alliance said privatization initiatives could pose a risk to the beer business in Pennsylvania and create an uneven playing field.

They oppose legislation by House Majority Leader Mike Turzai, an Allegheny County Republican, to privatize the state-run liquor system.

View full sizeCHRIS KNIGHT, The Patriot-News, 2008Cases of beer are stacked high at Glenn Miller Beer Soda Warehouse in Lemoyne.

“It will be detrimental to the beer industry,” said Jay D. Wiederhold, president of the beer alliance which represents 34 beer wholesalers in the state.

Up until now, the industry was quiet about the issue, largely because beer was not part of the original legislation.

But in December, legislators gutted Turzai’s bill, stripping out language to sell off the state’s wine and spirit stores in exchange for language that would allow beer distributors to purchase licenses to sell wine and beer.

“It changes the game on us,” Wiederhold said.

The association’s letter was prompted because of rumblings Turzai is preparing to re-introduce the bill on the House floor.

In a copy of a proposed amendment obtained by The Patriot-News last month, Turzai’s latest plan calls for selling 1,600 licenses, up from the original proposal to auction off 1,250 licenses.

A projected sale of retail licenses is estimated to generate $500 million to $750 million in revenue.

Beer distributors also would be permitted to sell six-packs of beer; they currently can only sell cases or kegs. Bars, restaurants and supermarkets with restaurant licenses could sell 18-packs of beer or less.

The plan also allows for giving beer distributors the opportunity to purchase up to 10 retail licenses to sell wine and liquor.

That is what has the state’s beer industry fired up.

Doing so would create an unfair advantage for Pennsylvania beer wholesalers and distributors who would face increased competition from out-of-state third-party companies such as Total Wine More and Walmarts, Wiederhold said.

“They have experience and billions of dollars in revenue,” said Horace Howells, general counsel for WL Sales Co. Inc., a Harrisburg beer wholesaler. “They will come in and crush the market.”

“It would put beer distributors out of business. They just wouldn’t be able to compete. They just wouldn’t have the financial capacity,” Howells added.

Wiederhold said it would be expensive for existing beer distributors to purchase licenses and build larger stores to accommodate the extra inventory, something they would likely need to remain competitive.

“The hardest part in the whole thing is you’ve got these family owned businesses that people have either paid money for or over generations built the equity,” Howells said.

Rodney A. Miller, owner of Glenn Miller Beer Soda Warehouse in Lemoyne, said he opposes the idea and said the legislation caters to the big box stores and national chains.

“All of us are local families. We donate to the baseball teams, the little leagues, the communities. We spend our money locally. It really hurts the small businessman,” Miller said.

In addition, Howells said consumers would likely see less selection and increased beer prices if the system changed. Right now, Pennsylvania has one of the lowest costs per case of beer in the country, he said.

In other states, large beer suppliers typically pay slotting fees to have rights to sell their products — mostly national beer names and fewer craft beers — in supermarkets, he said.

The store’s shelf space is often limited to about 20 to 30 beer products, much less than what Pennsylvania beer distributors carry, Howells added.

All About Beer with Bill & Sheila

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Samuel Adams

BEANTOWN BREWMASTER | Jim Koch, CEO of Boston Beer Co.

King of Craft Beer

WHAT HAPPENS WHEN the small get big? Craft beer is at a turning point. While upstart breweries continue to blossom—more than 150 opened last year—the companies that started the movement two and three decades ago have grown into relative giants. The largest by far is Boston Beer Co. Started by Jim Koch in 1984, today it operates three breweries and produces 1.2 million 31-gallon barrels of beer annually—so much, in fact, that last year the Brewers Association raised the definition of “craft” from a yearly cap of two million barrels to six million. This jostled a few industry pint glasses. After all, Boston Beer seems a far different breed than your local brewpub. And yet, it’s farther still from, say, multinational beverage behemoth Anheuser-Busch InBev, which hit the two-million-barrel mark back in 1938. I joined Mr. Koch in his bustling Jamaica Plain, Mass., brewery to sample some new recipes and find out, as craft beer grows up, what it means to be small and whether Samuel Adams still counts.

You came early to craft beer, but you weren’t the first. What did the craft beer world look like when you started Boston Beer?

Originally, craft brewing was marketing driven, not quality driven. The hope was that people would forgive you because you were small and cute. Drink the marketing, not the beer.

The names Boston Beer and Samuel Adams imply a specific story, or at least history. How’d you settle on them?

We’re in Boston, so that wasn’t hard. And you don’t need to be a genius to know that you don’t put the name Koch on a product 26-year-old men put in their mouth!

F. Martin Ramin for The Wall Street Journal

While upstart breweries continue to blossom—more than 150 opened last year—the companies that started the movement two and three decades ago have grown into relative giants.

You started by making lager—something that seemed both cutting into big guys’ turf and expanding what most drinkers thought lager was, or could be.

Lager was a huge problem. It’s much more expensive and difficult to make. But my family’s German. This is what we do. I had a recipe from my great-great-grandfather. My dad said, The big guys will kill you. I said, Dad, I’m not competing with them. They make clean, consistent, inexpensive beer extremely well. You can go your whole life drinking Bud, Miller and Coors and never get a bad one. That’s not true with craft beer.

So what makes you different than Budweiser?

It’s what’s in the glass. It tastes different. It’s obvious.

What makes craft beer craft?

It’s not quality. Everybody jumps on Budweiser. But they have better brewing skills than you do and they care just as much about their product as you do.

This month you’re releasing a couple of new beers in your small-run Single Batch collection—Norse Legend, a Finnish juniper beer, and Verloren, a gose, made with salt and coriander. Most American drinkers have probably never heard of gose. Do you try to find old styles to resurrect?

Not that much. This didn’t come from thinking, I want to educate people about salt in beer. It’s about wanting to make great beer. The gose has a unique mineral note that I can’t recall ever having in a beer. It’ll be really interesting to see drinkers’ reactions.

Have any beers failed?

There was a beer called WTF. Very experimental, a lot of things going on—steeping of whole flowers, barrel aging, very high alcohol. Everybody who rated it [on the beer-rating website Beer Advocate] gave it an “F.” I remember watching people try to drink it out of the bottle and just blowing it out—Pffffff! I thought, We have the lowest-rated beer in history. Cool. Maybe we can get another one.

Our beer will make its own friends. Or not. Most of these [Single Batch series beers] have been commercial failures. That doesn’t mean it’s a bad idea. At our size, we can do whatever we want. You need to be big enough to be able to do it, but you also have to be small enough to want to do it.

You started a microloan program, Brewing the American Dream, for small food and drink businesses. But it’s more than that—it’s really a mentorship program.

When I started out, nobody made brewing equipment, nobody had brewing skills. You used old dairy equipment. Now, it’s gotten easier—you can actually make your beer. But there are different problems. And I thought, just giving money away is lazy. That’s ticking boxes. Businesses that recognize their social return perform better.

If big brewers like Anheuser-Busch wanted to make, say, a gose, they could, right? Why don’t they?

You’re focusing on the hardware, not the software. They have the resources. But it’s more than money and hard assets. It’s also a matter of passion. What do you love, what are you proud of? These are the things that motivate people.

You started as a home-brewer. Do you think you keep that spirit?

The line between a talented amateur and a practicing professional is largely arbitrary.

—Edited from an interview by William Bostwick

F. Martin Ramin for The Wall Street Journal

Norse Legend

New Boston Beer to Try Now

Norse Legend

7.0% ABV

This ancient Finnish rye-and-juniper-flavored beer, called sahti, was traditionally home-brewed by women; Boston Beer’s Jennifer Glanville helmed its take on the style with a rustic, loamy bloom and fresh pine-needle finish.

F. Martin Ramin for The Wall Street Journal

Verloren

Verloren

6.0% ABV

German for “lost,” Verloren dusts off a forgotten salt-infused Saxon style called gose. Just a dash (think milligrams per liter) goes a long way, balancing the beer’s slightly sour tang, juicing up the touch of coriander and finishing the mix with a curious mineral edge, like a Manzanilla Sherry.

F. Martin Ramin for The Wall Street Journal

Whitewater IPA

Whitewater IPA

5.8% ABV

A year-round brew, but perfect for summer, Whitewater blends a witbier’s refreshing orange-peel spice with the earthy sweetness of apricots and passion fruit-juice punch of trendy, Australian Topaz hops.

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Beer designed for socializing

For several years the mantra in craft beer has been “more, more, more,” as in more hops, more alcohol, bigger, brasher, smack-you-in-the-face flavors that shout “Pay attention to me!”

But there is a growing cadre of beer makers and drinkers saying that enough is enough. They crave something subtler — beer that won’t wreck their palates or leave them wobbling after just a couple of pints, but with enough flavor to make them want a third.

Enter “session” beers, so-called because they satisfy through a session at the pub without the slurred words and embarrassing antics at the end. They are beers built for socializing, content to be a peripheral player rather than the star.

Some proponents insist that session beers must be less than 4 percent alcohol. That can be hard to find in this country of big beers, but not impossible. Cain’s Dark Mild clocks in at a mere 3.2 percent. But don’t confuse it with the 3.2 beer you buy at the grocery store. This Liverpudlian mild ale is packed with flavor. A light touch of roasted malt brings chocolate notes that complement the toffee and toast center. Mild bitterness and moderate carbonation keep it smooth. It’s one of my new favorites.

For a local take on the English mild, head to Great Waters brewpub in St. Paul for a pint of New Centurian. Nutty and chocolaty malt is balanced by just a touch of bitterness and earthy flavor from English hops. Traditional hand-pulled, cask service and the use of oats and wheat give this light-bodied beer a rich, creamy mouthfeel.

Anchor Small Beer gives you a session brew with a bigger hop bite. At just over 3 percent alcohol it’s a lightweight. There’s a wee bit of caramel malt, but hops steal the show. Bitterness is relatively high for such a little beer, and the grassy, citrus flavors of English East Kent Golding hops sit firmly on top.

A beverage for relaxing

Although I don’t recommend drinking around lawn mowers, certain session beers are often called “lawn mower” beers, meaning they are perfect for knocking back a couple of cold ones on a hot summer day. Samurai from Great Divide Brewing Co. is just such a beer. Like a more interesting version of the standard American lager, this rice ale delivers citrus and apple notes on a base of sweet pilsner malt. It’s dry and crisp, but a bit stronger at 5 percent alcohol.

Big Sky’s Trout Slayer is a golden-colored pale ale brewed with wheat. It pours with an attractive, creamy, white head. Light bready and biscuit notes serve as a base for assertive bitterness and a burst of herbal hop flavors. A clean, dry finish rounds out the experience. Both Trout Slayer and Samurai are available in cans so you can bring some with you to the BWCA.

Michael Agnew is a certified cicerone (beer-world version of sommelier) and owner of A Perfect Pint. He can be reached at [email protected].

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