Deal to privatize liquor sales eludes lawmakers
By The Associated Press
Published: Sunday, June 3, 2012, 9:46 p.m.
Updated: Monday, June 4, 2012
HARRISBURG — The plan to get Pennsylvania out of the business of selling wine and liquor has changed substantially in the past year, and more revisions are likely before it reaches the House floor, the chief proponent said.
"It's merely a draft. That's all it is," said House Majority Leader Mike Turzai, R-Bradford Woods. "The final product has to be geared toward the citizens of Pennsylvania ... to provide consumers with the best service, prices, convenience that they demand and that they see in other states."
The latest proposal would give the state's 1,200 beer distributors the first shot at buying licenses to sell beverages available only at state-owned stores. According to people familiar with it, the state would issue 1,600 licenses for the retail sale of liquor and wine. Licenses not sold to beer distributors would be auctioned off to other private companies.
Also, the 600-plus state stores would be closed over five years, and supermarket chains licensed to sell takeout beer could not be licensed to sell liquor and wine for 10 years.
Turzai, whose efforts are backed by Gov. Tom Corbett, said many Pennsylvanians want privatization.
"They don't understand why New York, New Jersey, Maryland, Delaware, Ohio and West Virginia can seem to do it in a responsible manner and Pennsylvania is so antiquated," he said.
Jay Wiederhold, president of the Pennsylvania Beer Alliance, which represents beer wholesalers that supply retail distributors and restaurants, said many retail distributors would be squeezed by the price of licenses. Prices would be set by counties, ranging from $60,000 in rural Juniata County to more than $800,000 in the Philadelphia suburb of Montgomery County, he said.
"Here's the best advice I have: 'Slow down,'" Wiederhold said. "This is a huge change. We've been doing this since coming out of Prohibition in 1933."
David McCorkle of the Pennsylvania Food Merchants Association said Turzai's plan calls for too much state regulation and too few licenses that cost too much.
"I just don't understand the business structure that's he's proposing," said McCorkle, whose group speaks for 1,000 food retailers, including Sheetz, the only convenience store chain that sells beer in Pennsylvania.
The renewed push for privatization in Pennsylvania coincided with last week's voter-approved dismantling of Washington's state-run liquor system, which was expected to result in retail price increases reflecting new state fees designed to make up millions of dollars in lost state revenue.
Turzai said that would not happen in Pennsylvania because his proposal will be "revenue-neutral" for the state treasury.
The head of the Pennsylvania Malt Beverage Distributors Association was withholding judgment until details become clearer. The group has pressed for changes that would allow beer distributors to sell six-packs — in addition to cases — so they can compete against major supermarket chains that are doing that.
"We've followed the rules for 80 years," said Mark Tanczos, who owns a Bethlehem distributorship. "We're hoping they consider that in anything they do."
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