In March 2013, The Pennsylvania General Assembly passed House Bill 790. If the bill is voted into law, the liquor industry will be privatized. Mike Turzai, Pennsylvania House Majority Leader of the 28th legislative district, introduced the bill, and it quickly gained support from many Republicans including Pennsylvania Governor, Tom Corbett. Supporters claim privatization will bring prosperity to the Commonwealth by instilling competition. If passed, the bill’s plan to slowly phase out state-run liquor stores will bring an end to a unique history of the Pennsylvania commonwealth selling liquor.
Unfortunately, many people will be hurt by this bill. The Pennsylvania Wine and Spirit Stores employ many Pennsylvania residents. Wendell Young IV, President of United Food and Commercial Workers Local 1776, currently leads the union in fighting against liquor privatization. He represents 3,500 of the 5,000 Wine and Spirits store employees. These employees are not guaranteed their jobs if the switch is made to privatization. This is the main reason that the unions oppose this bill. However, the bill would have other consequences as well, such as hardships on beer breweries.
According to the bill, the 600 state-owned liquor stores will be phased out by selling private licenses to potential suppliers, ending the monopoly that the Pennsylvania Liquor Control Board has on wine and spirits. Licenses will be sold to a variety of businesses, including beer distributors, grocery stores, big box stores, and other potential suppliers. These suppliers will choose to purchase one of two types of licenses. The grocery store license will enable stores to sell an unlimited amount of wine, but no beer. The restaurant license will allow businesses to sell both wine and beer as long as the business maintains a restaurant in the building. In other words, grocery stores will be able to have the restaurant licenses as long as the stores have a separate restaurant area. Representative Mike Turzai has stated that when the transition is complete, “competition will take effect” and benefit Pennsylvanians. Despite his claim that the bill will help the Commonwealth of Pennsylvania with increased competition, in fact, many of the bill’s provisions will hurt Pennsylvania’s beer breweries.
Pennsylvania is home to many important breweries. The three most prominent are Yuengling, Troegs, and Victory. These businesses and others are worried that privatization will hurt their respective industries by giving an unfair advantage to the liquor and wine industries. An open letter to Pennsylvania lawmakers from Anheuser Busch, MillerCoors, The Pennsylvania Beer Association, and Brewers of Pennsylvania addressed these concerns. In the letter, the brewers call the bill “detrimental to the beer industry.” Since House Bill 790 would allow beer distributors to sell new products, they would have to accommodate to make new space for the new products. Beer products would likely lose half of their space to wine and spirits. The first 1,050 of 1,600 total licenses to sell wine and liquor would go to beer distributors, ensuring less demand for beer brewers’ products. The letter also claims that the current version of the bill would result in an “uneven playing field in the grocery store segment,” because grocery stores would be able to sell wine, but not beer. Even for grocery stores with restaurant licenses, beer would only be sold in the restaurant section in limited quantities, while wine, on the other hand, would be sold anywhere in the store. These provisions would discourage grocery stores from selling beer because they would have to spend time and money on the expensive upkeep and management of a restaurant. Governor Corbett’s original plan for the bill was for beer to be sold in grocery stores as well, but it was altered in part by Liquor Control Committee Chairman John Taylor. Representative Turzai claims that the purpose of the bill is to create competition where the consumer wins. Yet the current version of the bill drastically expands wine and spirit sales, while barely increasing the beer industry. This plan could severely hobble beer brewers in the state. The current bill is not best for the people of Pennsylvania. An acceptable bill would allow beer to compete with wine and spirits.
The actions taken by the Pennsylvania GOP are simply too rash. More moderate measures could be taken. Although Pennsylvania is only one of two states with solely publically owned stores, other states have found a compromise. Many states blend public and private stores, ensuring that everyone has access to a variety of choices. Wine and Spirits stores are in all of Pennsylvania’s 67 counties. Businesses in the middle of Pennsylvania may not find it profitable to sell liquor. The only places that would be likely to sell liquor in these areas are big-box stores and grocery stores, ensuring a poor selection for central Pennsylvania. These big businesses would inevitably push out smaller businesses that cannot compete with the low prices of the larger companies. Workers who deal with alcohol may currently receive livable wages, but wages will most likely decrease with the proliferation of big-box stores and grocery stores involved in the beer and liquor business.
Governor Corbett and the GOP are rushing to get privatization passed. In this rush, they forget they could choose a middle-road. A wise bill would take a moderate approach, mixing private and public interests.
Jack Barnett is a fourth-year student majoring in history and political science. He can be reached at JB723722@wcupa.edu.