As the wine and spirit industry in Pennsylvania continues to be reformed, independent retailers have largely been left out of the conversation. Act 39 of 2016 certainly changed the landscape of the market, and now legislators are trying to use the momentum to pass additional reforms to give the people of Pennsylvania greater choice, competitive prices, and more convenience. The House of Representatives passed four new bills recently dealing with liquor reform, which will now be sent to the Senate for consideration. This legislation would have significant impacts for PFMA members if signed into law, so please take a moment review the information on the bills below.
House Bill 975 by Representative Mike Turzai would divest the wholesale system of wine through the creation of two new licenses: the wholesale wine license and the retail wine license. The wholesale wine license would allow a licensed importer to sell and distribute wholesale wine, for an initial fee of 10% the cost of goods paid by the PLCB in the previous year and an annual renewal fee of 5% of the total sales of wine the previous year, payable quarterly. The holder may not, however, be a manufacturer or producer of wine, engage in the sale of wine at retail, in variable pricing or unfair/deceptive trade practices, and must serve all licenses and permit holders under the same pricing structure.
Detailed logs of all transactions will be required as well.
The retail wine license would allow for the sale of wine for off-premise consumption in retail outlets that have 5,000 square feet or more. An amendment to the bill included additional language in the definition of “retail store” to require that 51% of the total sales of the establishment be from the sale of food, food products, table items, and food for human consumption. The initial fee would be $250,000, followed by an annual renewal fee of 2% of the total sales of wine for off-premise consumption the previous year. A retail license holder would not be allowed to engage in wholesale wine sales, but nothing would prohibit a retail license holder from also being a R or E license holder, as long as sales are reported separately. Additionally, sales would be limited to 9,000 ml or less, must occur at a specific register utilizing a transaction scan device staffed by an employee 18-years or older, and would be allowed Monday through Saturday, 7 a.m. to 11 p.m. An additional permit to sell wine on Sundays could be purchased for $2,000.
Also by Representative Turzai, House Bill 1075 would go further in divesting the state from the purchase and distribution of both wine and spirits by creating a wholesale permit for its sale privately. The permit would allow a licensed importer to sell and distribute wholesale wine or spirits, for an initial fee of 10 percent the cost of goods sold by the PLCB in the previous year, and an annual renewal fee of 10 percent of the permit holder’s total sales each year, payable quarterly. Each permit is in effect for ten years, at which point the permit holder would be granted a wholesale license to continue operations. At that time the renewal fee would be reduced to just 5 percent of annual sales, bringing it in line with the annual fee for a wholesale wine license as proposed in HB 975.
As with the wholesale wine license, the holder of a wholesale permit would not be allowed to engage in the retail sale of wine or spirits, and retailers of wine and spirits may not obtain a wholesale permit. However, this legislation does not provide for the creation of such a retail permit or license.
House Bill 975 by Representative Mike Turzai would divest the wholesale system of wine through the creation of two new licenses: the wholesale wine license and the retail wine license. The wholesale wine license would allow a licensed importer to sell and distribute wholesale wine, for an initial fee of 10% the cost of goods paid by the PLCB in the previous year and an annual renewal fee of 5% of the total sales of wine the previous year, payable quarterly. The holder may not, however, be a manufacturer or producer of wine, engage in the sale of wine at retail, in variable pricing or unfair/deceptive trade practices, and must serve all licenses and permit holders under the same pricing structure.
Detailed logs of all transactions will be required as well.
The retail wine license would allow for the sale of wine for off-premise consumption in retail outlets that have 5,000 square feet or more. An amendment to the bill included additional language in the definition of “retail store” to require that 51% of the total sales of the establishment be from the sale of food, food products, table items, and food for human consumption. The initial fee would be $250,000, followed by an annual renewal fee of 2% of the total sales of wine for off-premise consumption the previous year. A retail license holder would not be allowed to engage in wholesale wine sales, but nothing would prohibit a retail license holder from also being a R or E license holder, as long as sales are reported separately. Additionally, sales would be limited to 9,000 ml or less, must occur at a specific register utilizing a transaction scan device staffed by an employee 18-years or older, and would be allowed Monday through Saturday, 7 a.m. to 11 p.m. An additional permit to sell wine on Sundays could be purchased for $2,000.
Also by Representative Turzai, House Bill 1075 would go further in divesting the state from the purchase and distribution of both wine and spirits by creating a wholesale permit for its sale privately. The permit would allow a licensed importer to sell and distribute wholesale wine or spirits, for an initial fee of 10 percent the cost of goods sold by the PLCB in the previous year, and an annual renewal fee of 10 percent of the permit holder’s total sales each year, payable quarterly. Each permit is in effect for ten years, at which point the permit holder would be granted a wholesale license to continue operations. At that time the renewal fee would be reduced to just 5 percent of annual sales, bringing it in line with the annual fee for a wholesale wine license as proposed in HB 975.
As with the wholesale wine license, the holder of a wholesale permit would not be allowed to engage in the retail sale of wine or spirits, and retailers of wine and spirits may not obtain a wholesale permit. However, this legislation does not provide for the creation of such a retail permit or license.
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