Pennsylvanians May Soon Enjoy Home Delivery of Wine From Out-of-State

Have you every visited a winery and wanted to ship a case of your favorite bottles to your home only to remember that option is not possible if you are a PA resident and the winery is out-of-state?

In Harrisburg yesterday, the option for Pennsylvania residents to have wine shipped directly to their homes from out-of-state wineries just moved a step closer to reality.  Senators unanimously approved PA SB 790, 48-0 that would allow Pennsylvanians to buy as many as 24 bottles of domestic wine per month from US wineries. Purchases can be made over the Internet, telephone or by mail.  The boxes would have to be marked as containing alcohol and require an adult’s signature and proper identification before a shipment is delivered.

Senate Bill 790 now moves to the House.  However, it is possible that SB 790 will be tied in with PA HB 11, a bill to privatize liquor and wine sales that has been on the sidelines for several months.  Since Gov. Corbett took office, there has been discussion about privatizingPennsylvania’s liquor store system.   Apparently, there was difficulty reaching a consensus among legislators, and in the meantime, other options to improve the current system have been explored.

Pennsylvania House Bill 11 is a departure from the original intent, which was to sell off the state’s wine and liquor stores.  Pennsylvania Liquor Control Board (PLCB) is the largest purchaser of wine and spirits in the US.  No doubt, a primary factor in slow rolling selling the stores is that the 610 LCB stores hit a new retail year record in 2010-11 with sales topping $1.9 billion.  With the kind of revenue that LCB generates, what’s the saying, “if it ain’t broke, don’t fix it”.

HB 11 takes a broader approach and makes beer and wine more accessible to consumers.  The revised version includes a variety of issues including extending Sunday hours from 9 AM to 9 PM and allowing beer distributors to sell wine and 6-packs of beer.  Under HB 11, the LCB continues to maintain and operate the stores selling liquor and wine.  However, for $100 million each, wholesale wine licenses would become available, which suggests could lead to competitive pricing with the LCB.  The bill contains another favorable addition – those locations with distributor licenses, which allow selling of beer, could also sell wine.  (For me, that’s code meaning that Wegmans could sell bottles of wine in addition to beer).

Currently, Pennsylvania is one of only two states (the other is Utah) that owns and operates wholesale and retail sales of wine and spirits.  Senate Bill 790 and House Bill 11 solve many of the issues that I have with the current system and, it protects the yearly revenue generated by the LCB and provides job security for the LCB state workers.

Combining the components of SB 790 and HB 11, what’s not to like about this legislation – it should satisfy everyone.

13 Comments

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  1. Please take a moment to read HB 11. It has undergone an amazing revision since presented 6 months ago. Under its provisions, liquor sales would remain a state-run affair. A Board, run by none other than patronage appointment, former Chester County Republican Party head Skip Brion, would expand allowable sales i.t.o products, location and hours.

    And this caught my eye on pp. 33-34 of the revised bill:

    “At the time of license issuance, the
    Board shall impose a one-time license fee to be paid by EACH successful applicant for a wine wholesale license in an amount equal to………….. $100,000,000.”

    Yikes! Now that’s revenue!

    Let’s all remember how much (little) the state legislature recently decided to charge gas drillers in “impact fees” for irrevocably changing our state’s natural resources……..for ALL gas drilling activity in the state during a given year.

    Note:The fee is dependent on the price of gas during the year of production set in statute.

    Annual fee projections:
    2011: $190,575,00
    2012: $219,901,500
    2013: $264,123,000
    2014: $29l,582,142
    2015: $33,882,000

    Our legislators at work…..when not focused on gun rights and women’s reproductive business…….

    [Reply]

    From the West Reply:

    Yes, basically a billion dollars in five years. Plus the corporate taxes and ,capital stock/franchise taxes they pay. You are right Kate, they got off cheap since after Ed rendell a billion doesn’t go as far as it used to.

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    kate Reply:

    Rep. Kampf is either wrong on the facts or deliberately obfuscating corporate tax burdens to prop up Corbett’s driller-friendly “impact fee “. Despite what he claims as a defense for a fee over a tax comparable to other gas-producing states’, PA is NOT the worst state in the nation for business. Except for New Hampshire and Delaware, PA has the best business climate in the East.

    Check out the latest analysis.
    http://www.taxfoundation.org/research/show/22658.html

    Pennsylvania ranks 19th in the Tax Foundation’s State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states rank as follows: New York (49th), New Jersey (50th), Delaware (12th), Maryland (42nd), West Virginia (23rd) and Ohio (39th).

    Repeat: PA is 19th out of 50 states in overall business climate.

    It is the effective tax rate that matters, not the stated rate. And the Capital Stock and Franchise tax is being phased out, and is currently scheduled to expire after 2013. See http://www.areadevelopment.com/stateResources/pennsylvania/Pennsylvania-Basic-Business-Taxes2010-64793.shtml

    [Reply]

  2. Interesting in the beginning. But there you go… gun rights and womens reproductive business…. BOOM! Thoughtful teasers then this stuff.
    100 million for the license fee for wine wholesale????PER APPLICANT?

    [Reply]

    Pattye Benson Reply:

    Should Harrisburg approve the bill as it is currently written, there is an option included to purchase a wholesale wine license for $100 million … and yes, that is per applicant.

    [Reply]

  3. maybe i need to understand what a wholesale wine license is. 100million dollars? Is the market that big to support that amount>? it just seems so bizarre that the implication is no one will get one.

    [Reply]

  4. According the Department of Commerce, 2011 estimated retail value of all wine sold in the USA was $32.5 billion. This is from all sources – Domestic and foreign, however almost 60% of that wine was produced in California. There was also $1.39 billion in exports, 90% of which was produced in California.

    These are big numbers, but I’m not sure they are big enough to warrant that large of a license fee.

    [Reply]

  5. quote: Bill 11 solve many of the issues that I have with the current system and, it protects the yearly revenue generated by the LCB and provides job security for the LCB state workers

    ============
    Pa has no business operating retail wine and spirit shops. Let them tax sales if they want, like other states. Providing job security for LCB state workers should not be a priority of the legislature. But I dont need the government to distribute beer and wine to me thanks very much, or any other commercially available commodity. Stick to roads, schools, the courts, police functions, hospitals, if you please, and other legitimate government activities. But get out of private commercial enterprise.

    [Reply]

    Pattye Benson Reply:

    But don’t you think the bill is a first step in the right direction? Selling wholesale wine distribution licenses, albeit at $100 million I don’t see much of a market; out-o-state wine delivery plus some non-state stores sale of wine (beer distributors and some grocery stores – Wegmans). I support the privatizing of the LCB but it is generating $$ in yearly revenue; should that be a consideration?

    [Reply]

    Mad Anthony Reply:

    Well, i suppose the government could earn revenue in a host of businesses . . . but thats not what I want the government to be about. If they are making money, then their revenues exceed their costs. The LCB has a monopoly on wine and spirits, of course they generate revenue. But where does that profit come from? Monopolistic prices. Which, when the govt does it, equates to a tax anyway. This is why so many SE pennsylvanians go to Delaware to buy wine and spirits. Prices 20-30% lower than the revenue generating Pennsylvania pricing.

    Perhaps the Pa legislature could generate more revenue by declaring that you can only purchase other goods from the state, at monopolistic prices. Why stop at wine and spirits? How about cars, or clothes, or food?

    When the government gets in the business of being the sole distributor of any consumable at prices set b y the government, thats a model for social orgainzation that was not embraced or espoused by the architects of this nation. There are plenty of other countries that demonstrate how those revenue generating models work out . . . and sound the death knell to individual liberty. Ironic that the cradle of liberty has this policy that runs contra to this founding principle . . . .

    [Reply]

    flyersfan Reply:

    fascinating about job security for LCB workers. Typical, but fascinating. Who was representing horse and buggy builders when they were replaced by the auto… I would like to know.

    [Reply]

  6. Patty,

    A good article but I would like to point out that Distributors, Class D, are the only one’s that would be offered the wine licenses. Wegmans has either a class E or C license and is not included in the current bill. As we both know this is always subject to change!

    [Reply]

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