Pennsylvania’s Big Year of Beverage Alcohol Rule Reform

Pennsylvania has already had a banner year in terms of amending its beverage alcohol rules, but the party seems to keep going. On November 15, Governor Tom Wolf signed House Bill 1196 bringing major changes to how beer may be sold in the state. This follows this summer’s passage of House Bill 1690, which signalled major changes to the sale of wine, including a landmark direct to consumer (DtC) bill.

What does HB 1196 change?

Perhaps the most notable change that HB 1196 affects what beer distribution stores may sell. In Pennsylvania, beer is sold for off-site consumption by restaurants, grocery stores, and convenience stores, and by beer distributors. However, it is beer distributors who serve as the main source for off-site beer sales in Pennsylvania, and generally have a larger selection than other retailers.

For years, beer distributors were restricted to selling only by the case. Last year, this was expanded to allow 12-pack sales. But now, HB 1196, which removes the last cap. Now beer distributors will be able to sell in 6-packs, singles, growlers, kegs, or really any configuration.

By allowing 6-packs, growlers, and other package configurations, beer distributors will be in a much better place to compete with grocery stores and other retailers. In theory, this increased competition means Pennsylvania beer drinkers will have more variety at better prices.

Another key rule in HB 1196 will grant out of state retailers and wholesalers the right to get a license to sell beer directly to Pennsylvania residents. This means that Pennsylvania will join the handful of other states granting out of state retailers direct to consumer privileges. Though notably, Pennsylvania’s rule only allows the direct shipping of beer–indeed, this provision has been described as a means to legitimize beer of the month clubs, which has its own merits.

There are a few other provisions in HB 1196, including expanded Sunday sales, and revising the definitions and rules of cider and mead products.

HB 1196 becomes effective 60 days after signature, so we should see these rules taking effect sometime in January 2017–though it will likely take a bit longer before all the provisions are actually in play.

I read about HB 1690’s DtC provisions, but what else did it change?

This summer’s big rule change got a lot of attention from ShipCompliant as it vastly expanded the state’s DtC provisions. Compared to the other provisions, however, the DtC rules were more sideshow than big top.

The rule change that arguably has the biggest effect on beverage alcohol sales is the creation of a new “Wine Expanded Permit.” This new permit enables holders of a restaurant or hotel license to sell up to 3-liters of wine for off-site consumption. Previously, only state liquor stores could sell wine for off-site consumption.

By increasing the number of places where Pennsylvania residents can purchase wine, this has the potential to greatly expand the wine market in the state. It also signals one of the biggest changes to a control state’s policies since Washington’s revamp in 2011.

While the Wine Expanded Permits are a huge sea change, there were several other big changes contained in HB 1690. These include expanded Sunday and holiday sales (different than those in HB 1196); a revamp to the state’s minimum price rules; an increase in the allowable abv of cider from 5.5 to 8.5%; and greater privileges for craft and small-scale producers, including sales at farmer’s markets, and an allowance for breweries, limited wineries, and craft distilleries to sell each other’s products for on-site consumption (they were previously limited to only selling products they produced).

_______________________________________________________________

In all, Pennsylvania has done more in one year to amend and modernize its beverage alcohol rules than it has in decades. For a state, which maintains a special tax on alcohol intended to provide emergency relief for a flood that happened over 80 years ago, that is quite notable.

So while the Johnstown Flood Tax may still remain for certain sales, Pennsylvania residents can cheers to a more modern system where 6-packs of beer are readily available at retail stores and restaurants sell you wine to go.

Submit a Comment

Your email address will not be published. Required fields are marked *