June 8, 2016

Gov. Wolf Signs Historic Liquor Reform Bill Into Law

Gov. Tom Wolf Wednesday was joined by legislators to sign into law an historic liquor reform bill-- House Bill 1690 (Turzai-R- Allegheny)-- that will enhance the customer experience by providing greater convenience and satisfaction.
“This is truly a historic day for Pennsylvania and the most significant step the commonwealth has taken to reform our liquor system in 80 years,” said Gov. Wolf. “I want to commend leaders and members from both parties in the House and Senate for coming together to pass this legislation, and today, I am proud to design it into law. As I have always said, my goal is to modernize the sale of liquor and beer in Pennsylvania and this reform package finally brings Pennsylvania’s wine and spirits system into the 21st century.”
“As the author of the final version of this bill, I am extremely grateful that all sides were able to set aside partisanship and unite around a plan that truly puts the consumers first,” said Senator Chuck McIlhinney (R-Bucks), Majority Chair of the Senate Law and Justice Committee. “I would also like to thank the Governor for reaching a compromise that puts the citizens of Pennsylvania ahead of politics.  The reforms included in this bill are measures that consumers have requested for years, and I appreciate the fact that we were able to reach a compromise that responds to the most pressing concerns we hear from community residents.”
The new law--
-- Removes Sunday restrictions and state-mandated holidays;
-- Enhances customer loyalty programs and opens up coupons at state stores;
-- Provides options for flexible pricing to allow state stores to offer special discounts and sales;
-- Allows restaurants and hotels to sell up to four bottles of wine for take-out;
-- Allows grocery stores that currently sell beer to sell up to four bottles of wine;
-- Allows for direct shipments of wine to people’s homes; and
-- And makes permanent gas stations’ ability to sell 6 packs.
A House Fiscal Note and summary is available online.
“This historic legislation is a tremendous leap into bringing Pennsylvanian into the 21st century,” said House Speaker Mike Turzai (R-Alleghen y), the prime sponsor of the legislation.  “This privatization bill will bring consumers the added choice and convenience they have been asking for since Prohibition.”
“Pennsylvania has taken a huge step to finally provide consumers with more convenient ways to purchase wine and spirits,” said Rep. Paul Costa (D-Allegheny), Minority Chair of the House Liquor Control Committee, said. “There will be more options for one-stop shopping to get what they need. Making smart changes at the state’s Fine Wine and Good Spirits Stores will also help to maintain thousands of existing jobs and increase revenue to begin closing our huge budget gap.”
Gov. Wolf said all of these improvements will enhance the customer experience by providing greater convenience and satisfaction and increase much-needed revenue to help balance our budget.
LCB Reaction

The Liquor Control Board had this reaction to the new liquor reform law—
"Enactment of this law – which includes initiatives the PLCB has long supported, including flexibility in pricing, extended store hours, expanded Sunday sales, enhanced direct shipping options, loyalty programs, additional couponing opportunities and Pennsylvania Lottery sales at Fine Wine & Good Spirits stores – heralds an exciting new beginning for the PLCB and Pennsylvania consumers of wine, spirits and beer," said Board Chairman Tim Holden.
Board Member Mike Negra added, "This law transformatively changes the PLCB's responsibilities such that we can now move away from decades-old prohibitionist restrictions on alcohol sales and pursue meaningful improvements to access and convenience for Pennsylvania consumers."
The PLCB has begun a comprehensive review of the many significant changes this law makes to regulatory, licensing, product procurement and marketing activities, among others.
"We are excited to tackle the monumental challenge ahead of us, and we pledge to do so diligently and cooperatively, communicating openly all along the way with those impacted by and interested in these changes," said Board Member Michael Newsome. "Understandably, however, a 100-plus-page bill overhauling decades-old practices includes inherent complexities that must be approached deliberatively."
The PLCB will move as quickly as possible in establishing new licensing applications and processes for direct wine shipping, casino licenses and wine permits for hotel and restaurant licensees. The agency will also immediately begin considering which stores will feature Lottery sales and/or have expanded Sunday sales hours as soon as the law becomes effective in August.
Other new authorizations the law provides the PLCB, including additional pricing and marketing flexibility, will likely be longer-term considerations.
"We commit to cooperation and open communication with the administration, the legislature, licensees, wine and spirits vendors, beer distributors, our retail customers and other stakeholders as we begin transforming Pennsylvania's beverage alcohol landscape in coming weeks and months," said Chairman Holden.
LCB Worker Union
The UFCW PA Wine and Spirits Council said the new law was a reckless proposal that would dismantle the Liquor Control Board, which last year provided generated $584 million in state revenue, and hasten the demise of Wine and Spirits Stores.
"This legislation would worsen the state's current fiscal crisis and destroy a valuable revenue-producing asset," said Wendell W. Young IV, President, UFCW Local 1776. "Wine privatization would only further increase our structural budget deficit, leaving taxpayers to hold the bag for years to come."
Young said the bill would not generate any revenue for the Commonwealth. According to analysis by Public Finance Management (PFM), commissioned by former Gov. Tom Corbett, the state would need to come up with $408 million in new revenue annually to make privatization fiscally neutral.
Wine accounted for 42 percent of total sales in the stores or more than $848 million in revenue in the last fiscal year. The most popular brands – those most likely sold by the big box chains – accounted for approximately $518 million of total wine sales.
"This privatization proposal will begin draining dollars from the state immediately, and by reducing foot traffic in the Wine & Spirits stores, weaken this asset," Young said. "Modernizing the PLCB makes the most sense for Pennsylvania, especially given the state's multi-billion dollar budget deficit.
"Instead of destroying this revenue-generating agency, let's open more stores inside of or adjacent to grocery stores or beer distributors to improve convenience," he said.
States that have outsourced the sale of wine, including Iowa and West Virginia, ultimately lost the entire asset to the private sector. Iowa, within just three years after wine sales were privatized, experienced a 25 percent drop in revenues to the state.
Young added that the PLCB pays all of its own expenses: those associated with the State Police Bureau of Liquor Enforcement; state drug and alcohol programs; and all employees' costs, including benefits.

At Least 3 Supermarkets Say They Want To Sell Wine