COLLEGEVILLE, Pa. -- A Wegmans supermarket will open this week selling wine and beer andand will reopen a festering dispute with beer distributors and other retailers, reported The Philadelphia Business Journal. Supermarket chains like Wegmans, Whole Foods and others have gotten around a state law against liquor sales by offering an interior connection to a related business. They do it with restaurant areas, liquor licenses and the blessing of the state Liquor Control Board (LCB).
"All of our Pennsylvania stores have Market Cafe restaurants, and all of those restaurants [image-nocss] have restaurant liquor licenses, allowing us to sell up to two six-packs of beer from the restaurant and serve beer by glass along with a meal. None is sold in adjacent space," Jo Natale, spokesperson for the Rochester, N.Y.-based Wegmans Food Markets Inc. told the newspaper.
Wegmans has 13 Pennsylvania stores, including area locations in Warrington, Downingtown and now Collegeville. In the next two years, it plans other sites in Malvern and King of Prussia.
But the Malt Beverages Distributors Association of Pennsylvania (MBDA), with 450 member businesses, has long balked at the beer-sale arrangement, saying the supermarkets are trying to "circumvent" the law, the report said. It said Wegmans gets around the law by calling operations by a separate nameincluding Market Cafea practice "akin to a political gerrymander, with boundaries tweaked to accomplish its purposes."
A lawsuit the distributors association filed against the LCB will be heard by the state Supreme Court, possibly as early as the spring, said the report.
In a ruling in June, the state's highest court ruled that a Sheetz convenience store/gas station would have to surrender its license to sell beer at an Altoona location. In the case of Sheetz, it was reprimanded for only selling takeout beer, rather than offering the option of on-premises consumption. Allowing a retailer to sell for takeout only afforded Sheetz "the benefits of a distributor license without imposing the accompanying restrictions," the court ruled.
One such restriction is that beer distributors must sell by the case or keg. Allowing Sheetz to operate that way would "infringe upon the market niche legislatively carved for the distributor."
Beer distributors said the playing field is not level, said the report. They cannot sell six packs. Supermarkets can apply for restaurant licenses and own more than one, whereas distributors are limited to one license, one location. The fear is that supermarket sales will lead to sales in big-box retailers like Walmart and Target, the Business Journal said.
"On the business side, if every supermarket is allowed to sell beer they can have as many licenses as they want," David Shipula, president of the distributors association and owner of the Beer Super in Wilkes-Barre, told the paper. "On a business side, they're pretty much going to take my livelihood."
Wegmans' Collegeville store, which opens October 11, will feature The Pub at Wegmans, a full-service restaurant where patrons can enjoy a meal but also beer, wine and spirits. The 132,000-square-foot store, which will be open 24 hours a day, will offer a variety of fresh, packaged and prepared food, ranging from gourmet pizza to Asian-inspired cuisine to burritos. A Market Cafe will have seating for 300. A Timber Room will have a fireplace and seating for 66. The store will have 600 employees.
Patrons of the store will also be able to choose from 600 varieties of beer. Beer is available in single servings or patrons can buy up to two six packs for carry out.
The distributors association said it is "optimistic" that the Supreme Court will clamp down on supermarket sales. Yet that has not stopped Wegmans or the supermarket chains that have offered limited sales of alcohol, including Whole Foods, Giant Eagle, Thomas' and Weis Markets, said the report.
"The LCB has been granting licenses for restaurants connected with grocery stores, delicatessens and department stores for decades, without objection by the MBDA," Natale said of the distributors association.
Beer buyers can also buy six-packs to go from taverns and licensed delicatessens and places serving prepared food.
"Small groceries have been doing this for years," Lew Bryson, the author of several books about breweries, told the paper. "I don't think the MBDA has a leg to stand on."
A larger issue, Bryson argued, is that consumers see the whole system as archaic and want to be able to buy beer in supermarkets, but also drugstores, convenience stores, big-box stores and so on.
Many of Pennsylvania's laws date to a post-Prohibition "three-tier" system of keeping brewers, wholesalers and retailers/taverns separate, Bryson said. For now, supermarkets must still be supplied through beer distributors, but that could change some day. "I think the real issue is that if supermarkets are allowed to buy directly from breweries, [the wholesalers] are in trouble," Bryson said.
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