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Beer sellers: Proposal to privatize wine, liquor sales opens new can of worries

| Monday, Feb. 4, 2013, 12:01 a.m.
Valley News Dispatch
Rich Rosella of Allegheny Township, who runs the 6 Pack and Doghouse on Pittsburgh Street in Cheswick, re-stocks a bottle of beer at his store. Rich and other six pack shop owners are among the people who may be hurt by the new LCB divestiture proposal, which includes making six pack sales more widespread at convenience and grocery stores. Bill Shirley | For The Valley News Dispatch
Valley News Dispatch
Rich Rosella of Allegheny Township, who runs the 6 Pack and Doghouse on Pittsburgh Street in Cheswick, gathers a six-pack for a customer. Bill Shirley | For The Tribune-Review
Valley News Dispatch
Rich Rosella of Allegheny Township, who runs the 6 Pack and Doghouse on Pittsburgh Street in Cheswick, gathers a 12-pack for a customer. Bill Shirley | For The Tribune-Review

Beer distributors across Pennsylvania say they're not sold on Gov. Tom Corbett's plan to privatize wine and liquor sales and expand where customers can buy beer.

Corbett's plan would allow distributors to sell beer in packages smaller than a case and would offer them the chance to sell wine and liquor. Distributors could purchase an “enhanced” license for a one-time fee of $150,000 to sell wine.

Under the proposal announced on Wednesday, grocery stores could sell six bottles of wine and up to a 12-pack of beer for $25,000 to $30,000 annually. Convenience stores could sell one six-pack with a $15,000-a-year license.

“Big box” stores, such as Costco and Target, could sell six bottles of wine and cases of beer with a $35,000 annual license.

The Malt Beverage Distribution Association of Pennsylvania, the statewide industry group for beer distributors, said the plan is unfair because license fees for grocery and big-box stores are a fraction of the cost distributors would have to pay to sell wine.

“This plan removes restrictions on us, but does so in a way that our 1,200 family-owned businesses would be completely destroyed by these large, out-of-state corporations,” association President Mark Tanczos said.

That's a feeling shared by Frank Pistella, owner of Pistella Beer Distributor in Friendship.

“It's going to be hard for a lot of distributors to come up with that $150,000 for an (enhanced) license,” Pistella said. “The value of your business is your license and inventory. How do you mortgage that? ... How do we enter into this arena?”

Rich Rosella, whose Allegheny 6 Pack and Doghouse in Cheswick sells sandwiches and six-packs, said expanding the number of venues where customers can buy beer would make his license “pretty much worthless.”

“If you issue ‘X' amount of licenses, you're not going to sell that much more beer,” Rosella said. “There's only so many beer drinkers in the state, and all you're going to do is water down the business of the places that have been selling it.”

Distributors also worry that few independent business owners will be able to compete against chain stores that can offer lower prices and longer hours.

“We don't want to be legislated out of business,” said Vince Altieri, owner of Jeannette Distributing.

Rosella argues that convenience stores, such as the Sheetz located near his business, are at a competitive advantage by staying open for 24 hours and offering products from gasoline to milk to tobacco.

“If Sheetz wants to put me out of business, they can, because they can sell beer at cost,” Rosella said. “There's absolutely no way I can compete.”

Jim Kabel, who operates Kabel's Beer Distributor in Winfield Township, Butler County, with his brother Ron, likes at least one aspect of Corbett's proposal.

“If they are going to let us sell the six- and 12-packs, I'm all for that because you can make more profit,” Kabel said. “That's good business, but the only thing is the bars don't want that.”

Bar patrons can carry out up to two six-packs at a time under current law.

“There will be a lot of beer stores that will go out of business,” said Tim Lender, owner of Myrna's Brew'ry Outlet in New Kensington. “I'm not planning to.”

Lender said he would change his 6,000-square-foot distributorship, one of the largest in the Alle-Kiski Valley, and expand in order to compete.

Kari Andren and Tom Yerace are staff writers for Trib Total Media. Andren can be reached at 724-850-2856 or Staff writer Rossilynne Skena contributed to this report.

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