Pennsylvania Revisits its Age-Old Liquor Laws

Saul Ewing Arnstein & Lehr LLP
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Summary

On June 8, 2016, Pennsylvania Gov. Tom Wolf signed a bill into law that will broaden the liquor laws in the state.  Scheduled to go into effect in early August 2016, the bill contains something for a broad range of stakeholders, including consumers, breweries, wineries, casinos, restaurants, grocery stores and gas stations.  Dramatic changes will occur in the production, distribution and sale of wine and beer.

Among a number of new changes, the law addresses the long-running problem of “dead” liquor licenses.  Liquor licenses typically go unused due to enforcement actions or financial difficulties, and owners abandon the valuable licenses without attempting to sell or transfer them.  The law will put back an estimated 1,000 expired and revoked liquor licenses into circulation through auction, however, the licenses must stay in the county where they originated.  

The sale of wine and beer will drastically change as a result of the new law.  Wine will be available to be sold by licensed restaurants, hotels, and grocery stores.  The law will turn these entities into wine distributors — allowing them to sell up to four bottles of wine to a customer in a single transaction, however, those who obtain the license must purchase the wine through state-run stores and cannot obtain the wine directly from a distributor.  Additionally, the law will allow gas stations to sell beer as long as they obtain the appropriate licenses and have a point of sale that’s separate from their fuel sales area.  

The law also alters the way craft breweries and distilleries operate.  Craft breweries and distilleries will be able to obtain off-premises catering permits to participate in food and drink expeditions and farmers’ markets.  This means they will be able to provide free samples or sell their products at food and drink events in four-ounce increments.  A more profitable change under the law is the ability to obtain a farmers’ market permit.  A permit will allow breweries and distilleries to participate in an unlimited number of farmers’ markets throughout the year to sell their products in limited quantities.  Breweries should also take note that the maximum alcohol by volume for alcoholic cider will be raised from 5.5 percent to 8.5 percent — allowing brewers to sell their products through wholesalers instead of state-run stores.  Furthermore, craft distillers will be able to sell bottled liquors produced by the distillery at up to five liquor board-approved locations other than their licensed premises. 

With this law, Pennsylvania recognizes the importance of a booming brewery and winery industry and its residents’ entrepreneurship.  The law establishes a grant program to distribute $1 million to Pennsylvania breweries and wineries for the purpose of increasing their production and sales. 

Alcohol producers and distributors are not the only affected industries.  Nonprofits and similar organizations may apply for permits to sell alcohol as part of fundraising events.  Additionally, casinos may obtain separate liquor licenses that permit all-day sales of alcohol.  

The 163-page bill will take time to implement and there will likely be hurdles to overcome for liquor license holders and producers.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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