New Liquor Privatization Proposal Makes Entrance

November 16, 2015

By Andrew Staub | PA Independent

House Speaker Mike Turzai last Thursday introduced another privatization bill extracting Pennsylvania from the hooch business, but there’s no promise it will be the final iteration of liquor reform included within a broader state budget agreement that’s starting to take shape.

While liquor reform is part of the framework of a budget deal between Gov. Tom Wolf and state lawmakers, Turzai’s latest booze bill is not the product of any current agreement, said Jeffrey Sheridan, Wolf’s press secretary.

“There have been no final details on liquor reform agreed to at this point,” he said.

Wolf wants the starting point of liquor talks to center on his previous proposal to lease the state’s wholesale and retail liquor operations to a private manager, Sheridan said, calling it a “very significant free-market reform.” Sheridan also said the liquor system is “an asset that we can make stronger.”

“The state would still be running the system, but they would be leasing it out,” Sheridan said. “That is privatization.”

It’s not the type of privatization that Turzai has proposed. The Allegheny Republican was the sponsor of the privatization legislation Wolf vetoed earlier this year.

His newest privatization bill would close the about 600 state-owned wine and liquor stores and create 1,200 permits that would allow for the sale of beer, wine and spirits under one roof. That would create the one-stop shop Pennsylvanians have lacked since the fall of national Prohibition.

Licensed beer distributors, which can sell only cases and 12-packs of beer under current law, would have a six-month right of first refusal to the new permits. After that period expires, remaining licenses would go to public auction.

Hotels and restaurants could obtain expanded permits to sell up to 192 ounces of wine and one handle of liquor (1.75 liters) to go at a time. A new grocery store permit would allow supermarkets to sell 12 bottles of takeout wine in a single transaction.

The wholesale system will be leased for 10 years to any importer licensed by the Pennsylvania Liquor Control Board. After that, the state would divest itself of the system and importers would be licensed to continue operations.

“Privatizing the wholesale system will help to not only increase the variety of products available in Pennsylvania, but will also provide current licensees with the service and pricing they have been requesting,” Turzai wrote in a memo seeking support for the bill.