McIlhinney Announces Retail Liquor Privatization Plan

For Immediate Release
6/18/13

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HARRISBURG — Senator Chuck McIlhinney (R-10) today unveiled legislation that would privatize the retail sale of liquor and wine, improve convenience for consumers and protect small businesses.

McIlhinney’s plan would allow current retailers that sell alcohol and beer to purchase an additional permit to sell wines and/or spirits to go. Specialty permits would also be available for retailers who only wish to sell a specific category of spirits, such as whiskeys or vodkas.

Rather than charging an exorbitant up-front fee for permits, McIlhinney’s plan would make permits available for an annual fee of $8,000. The proposal would help small, family-owned businesses and preserve the value of licenses that have already been purchased. Packaging reform measures would also benefit current retail beer distributors by allowing the sale of beer, wine and liquor in smaller quantities, such as six-packs.

“Many owners of beer distributors, taverns and restaurants were forced to make a giant leap of faith and pour all of their financial resources into their business to succeed in the current system,” McIlhinney said. “As we move toward liquor privatization, we need to give these small business owners a way to protect their investment and avoid handing the entire liquor distribution system over to huge corporate interests.”

Under McIlhinney’s privatization plan, state-owned Wine and Spirits stores would be phased out over time when the private retail market can accommodate the needs of consumers.

A number of measures in McIlhinney’s plan are focused on improving the system for consumers. The proposal would expand the number of liquor and wine retailers and create one-stop shops for alcohol purchases at many establishments that currently sell alcohol.

The plan also incorporates a proposal introduced by Senate President Pro Tempore Joe Scarnati (R-25) that would allow direct wine shipments to consumers. The Johnstown Flood Tax would also be eliminated as part of the plan.

The proposal differs from the privatization plan approved by the House last month in regard to the state’s current wholesale distribution system. McIlhinney’s plan would not immediately divest the state from the wholesale system. However, the legislation would require the Pennsylvania Liquor Control Board and the Legislative Budget and Finance Committee to complete a study within two years regarding the future viability of the state wholesale system.

“Opponents to privatization have raised a number of valid concerns, and we need to address these issues carefully to avoid the negative consequences suffered in other states,” McIlhinney said. “My plan offers a way to privatize the retail sale of wine and liquor in the very near future while we continue to find ways to maximize our financial return.”

Amendments to Senate Bill 100

CONTACT:

Heather Cevasco
(215) 489-5000