In an attempt to enhance consumer convenience and generate significant state revenue, a Pennsylvania lawmaker has introduced a bill to expand the number of outlets selling wine and spirits. State Senator Gene Yaw (R-23) recently proposed legislation to direct the Pennsylvania Liquor Control Board (PLCB) to create a franchise store system to contract with up to 2,000 retail franchises by 2024 to sell wine and spirits.
The bill, SB 548, has been referred to the Pennsylvania State Senate Law and Justice Committee. It would allow off-premise beer retailers and grocery stores with “R licenses” (which allow beer sales) to sell spirits. The legislation would also allow the PLCB to contract with private retailers. The proposal follows Act 39 of 2016, which expanded retail wine sales in Pennsylvania beyond state-owned stores to retail businesses, including grocery and convenience stores that may currently sell up to four 750-ml. bottles of wine per transaction.
If approved, the nearly 900 expanded wine permit license holders would be given the opportunity to apply for one of the franchises. Adding 900 spirits outlets in Pennsylvania would generate $100 million in additional revenues, according to the Washington, D.C.-based Distilled Spirits Council. The trade group claims that Pennsylvania consumers are underserved, considering the state has 0.67 retail outlets for every 10,000 people, compared to a national average of 3.8 outlets.
Ranked second among control states by spirits volume, Pennsylvania was the only control state among the top ten to decrease in volume last year with a 1.6% decline to 7.67 million 9-liter cases, according to Impact Databank. Nevertheless, dollar sales in the Keystone State grew 4.4% to approximately $1.4 billion as consumers traded up, particularly in whisk(e)y, Tequila, and Cognac.
The PLCB, meanwhile, is expanding retail operations this year. The PLCB identified about 70 store projects for 2019, including new stores, upgrades, remodels, and relocations. Seven standard Fine Wine & Good Spirits stores are being converted to Premium Collection stores to meet increasing consumer demand for luxury wines and spirits. Yaw’s proposed legislation would maintain the existing PLCB retail wine and spirits outlets, as well as their employees, and allow the PLCB to continue to control the wholesale distribution of wine and spirits.