Breweries Say: “Pennsylvania Beer, Wine, and Liquor…Oh My!”
August 3, 2017
Given last year’s amendments to the Pennsylvania Liquor Code, emerging malt and brewed beverage manufacturers looking to enter into and successfully compete in the Pennsylvania marketplace have recently been given more options in choosing which particular license to apply for with the Pennsylvania Liquor Control Board. Because of the expanded rights afforded to Pennsylvania breweries through Acts 39 and 166, it is now easier for breweries to compete with other retail licensees in the consumer marketplace.
Prior to the passage of Acts 39 and 166, the holder of a brewery license, standing alone, was allowed on-premises consumption of its own malt and brewed beverages only. Thus, prior to the amendments, in order to be competitive in retail sales of a wider variety of alcoholic beverages for on-premises consumption, Pennsylvania breweries had to apply for a brew pub license (“GP license”), or had to find an available restaurant (“R”) or malt and brewed beverages eating place license (“E”) to purchase and transfer to the brewery’s operation. Each of these licenses varies in many regards, from the types of beverages the licensee is allowed to sell for on-premises consumption, the amount of beverages that can be sold for off-premises consumption, and the initial cost to obtain the particular licenses. Indeed, depending on the particular county in which the brewery wants to establish its operations, the availability of an E or an R license can be scarce and, even if found, can be extremely expensive.
The recent Liquor Code amendments have significantly expanded the rights of brewery licensees, thus now making it easier and more cost effective for breweries to compete with other retail licensees in Pennsylvania. Notably, Act 39, passed into law on June 8, 2016, allows a brewery licensee to sell wines produced by a Pennsylvania limited winery or liquor produced by a Pennsylvania limited distillery for on-premises consumption, in addition to the malt and brewed beverages produced by the brewery itself on the licensed premises. Additionally, Act 166, passed in November 2016, permits a brewery to sell alcoholic cider and malt or brewed beverages produced by other PLCB-licensed manufacturers for consumption on its licensed premises. The combined sales of wine, liquor, and malt or brewed beverages produced by another Pennsylvania manufacturer may not exceed 50% of the on-premises sales of its own malt or brewed beverages for the preceding calendar year, or for the current year if the brewery had not previously operated for a full calendar year.
As such, given these recent revisions to the Liquor Code, depending on the brewery’s vision of operation, a restaurant, eating place, or brew pub liquor license may not be necessary in order for the brewery to be competitive in the retail sale of alcoholic beverages for on-premises consumption. So long as it is comfortable with selling only Pennsylvania-manufactured beer, wine, and liquor for on-premises consumption, in addition to showcasing its own manufactured malt and brewed beverages, a Pennsylvania brewery may now consider foregoing the potential expense and difficulty of locating an additional retail liquor license in order to attract a broader consumer base for on-premises consumption of alcoholic beverages.
© 2017 McNees Wallace & Nurick LLC
Food & Beverage Client Alert is presented with the understanding that the publisher does not render specific legal, accounting or other professional service to the reader. Due to the rapidly changing nature of the law, information contained in this publication may become outdated. Anyone using this material must always research original sources of authority and update this information to ensure accuracy and applicability to specific legal matters. In no event will the authors, the reviewers or the publisher be liable for any damage, whether direct, indirect or consequential, claimed to result from the use of this material.