ALTOONA, Pa. -- In early 2004, convenience store chain Sheetz Inc. announced plans to sell beer at one of its 195 Pennsylvania locations. But about three years passed before a single customer was allowed to purchase brew at the store in Altoona. Since February, beer sales have been halted twice and then resumed as Sheetz has found itself embroiled in a legal fight that reached the state Supreme Court.
While the battle directly affects only a fraction of Pennsylvania's beer drinkers, it serves as a prime example of the complexity of the state's alcohol [image-nocss] regulationsa system in which any proposed change is sure to cause a controversy, reported The Tribune-Democrat.
"The case points out a system in Pennsylvania that is much different from almost any other state in the union," Mike Cortez, Sheetz vice president and general counsel, told the newspaper.
While there are many varieties of beer-sales licenses in Pennsylvania, consumers mainly buy from three types of establishments, each with its own set of rules set by the state:
Beer distributors sell by the case but cannot currently offer beer in smaller quantities such as a six-pack. Businesses with "restaurant liquor licenses"; for example, a bar or restaurant can sell beer, wine and liquor. But only beer may be offered as a carryout purchase, and these licensees can sell nothing larger than a 12-pack. Requirements for these establishments include serving food to the public in a space that measures at least 400 square feet and has accommodations for at least 30 people. Businesses with "eating-place malt beverage" licenses are allowed to sell only beer; consumers cannot purchase more than two six-packs or a 12-pack at a time. These facilities also must sell food and have room for at least 30 people, but the space requirement is decreased to 300 square feet.Because of this strict setup, the beer-license system has fostered a host of interest groups that, as a matter of financial survival, must zealously guard their respective shares of the market, said the report. So it is no surprise that a bill that recently passed a state Senate committee is generating plenty of feedback, it added.
The proposal would allow beer distributors to sell packages as small as a six-pack. Other licensees would be able to offer up to three six-packs, or previously unavailable 18-packs, to a single carryout customer.
While that sounds like a relatively small shift, the bill is opposed by trade associations representing nearly all sectors of the beer industry, the Tribune-Democrat said. They cite varying and, in some cases, complex reasons for their concerns. And they maintain that they support liquor-law reform if it happens fairly and in the proper context. But in the end, the debate boils down to economics.
For instance, Pennsylvania Tavern Association (PTA) members are not interested in allowing distributors to jump into the six-pack and 12-pack market. "We just don't need this kind of competition," Amy Christie, the association's executive director, told the paper. "We supply over 100,000 jobs a year to Pennsylvania."
Christie said the association is disappointed that the bill does not give licensees more flexibility in where they must buy their beer. Currently, taverns and restaurants can purchase only from one designated distributor, not necessarily the closest or lowest-priced distributor.
The Pennsylvania Malt Beverage Distributors Association (PMBDA), which represents beer distributors, said it would like its members to be able to sell beer in smaller quantities. But the group opposes the Senate bill, in part because it would allow other licensees to sell an 18-packjust six brews shy of the cases now available only through distributors. "We feel that would be another tool that would be used against the distributors," association President David Shipula told the paper.
The Pennsylvania Beer Wholesalers Association (PBWA), a group made up of larger "importing distributors" that sell beer to regular distributors, also does not support the bill, the report said.
That leads State Rep. Robert Donatucci (D) to one conclusion. "Everybody's mad," said Donatucci, who leads the House Liquor Control Committee. "So the way I look at it is, it must be a good consumers bill."
It is unclear whether the Senate bill can win approval from a majority of Pennsylvania's lawmakers. But Donatucci contends that, one way or another, change is on the way. "We've got to do something that makes beer sales in Pennsylvania more consumer-friendly," he told the paper.
That is the central issue in the Sheetz battle. Some argue that the corporation is attempting to expand beer sales into the c-store market.
"We don't think that beer should be sold at a [c-store]. There are minors in there, children of all ages in there," said the Rev. Gary Dull, an Altoona pastor who in 2004 collected nearly 7,000 petition signatures in an attempt to halt Sheetz's plans. "I run into people all the time who say they have stopped going to Sheetz because of the beer issue," Dull said.
The PMBDA voiced its opposition by taking Sheetz to court. The case focuses on one specific legal question. Sheetz said it never intended to allow customers to drink in the Altoona store. But the association contends Sheetz's eating place malt beverage license requires the corporation to allow on-site beer consumption. Otherwise, Shipula said, "it's obvious to us that [Sheetz] wants to act more like beer distributors than restaurants."
Pennsylvania Liquor Control Board (PLCB) officials see things much differently. The board approved Sheetz's license and has backed the c-store chain, according to the report. In fact, the PLCB does not believe the Sheetz beer license is a groundbreaking or precedent-setting matter. The corporation, officials say, simply built a facility that complied with regulations set forth in the eating-place malt beverage license.
Furthermore, PLCB spokesperson Nick Hays said a few Pennsylvania grocery stores already can sell beer. That includes a Pocono-area Weis Market that has an eating-place malt beverage license. And there are six applications for restaurant liquor licenses pending from the Wegmans supermarket chain.
Weis, Wegmans or any other market interested in offering alcohol must follow current PLCB licensing regulations, Hays said. As long as they do, he said, "there is no rule that says a grocery store cannot sell beer."
Still, some contend that granting such licenses leaves Pennsylvania teetering on the edge of a slippery slope, said the report. More access to alcohol leads to more alcohol consumption, likely among youths, they say.
While supporters of expanded beer sales cite surveys indicating that the public wants more convenience, the distributors association commissioned a poll with a different result. The poll, released in October, said 54.6% of those interviewed said expanded access to carryout beer leads to an "increase in the rates of underage drinking or other alcohol-related problems."
When it comes to beer sales, Shipula said, convenience cannot trump public safety. "We have a controlled system for a reasonto protect the public," he told the paper.
Sheetz administrators scoff at the notion that their stores or clerks would contribute to alcohol problems. "Sheetz sells beer in every other state in which we do business," Cortez told the Tribune-Democrat. "And we do it very responsibly."
Meanwhile, the PLCB has unveiled plans to spend millions of dollars revamping the agency's image and renovating many of the 630 state-controlled retail stores. It will spend some of the record $487 million profits renovating wine and liquor stores and creating a new brand has spurred some backlash.
State Rep. Russell H. Fairchild (R) opposes the state being in the alcohol business. "I don't think it's a function of state government," he told the paper.
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