The Pennsylvania House of Representatives’ Liquor Control Committee is set to vote on a measure to lift liquor licensing restrictions that have been in place since the repeal of Prohibition.
On Tuesday, the committee is expected to pass amendments to the Liquor Code in HB 1902, a measure introduced by the committee chairman, Rep. Adam Harris, R-Juniata. If passed by the General Assembly, the bill would end the state’s practice of “interlocking prohibition,” a form of tied-house law that disallows holders of liquor manufacturing licenses from also holding retail bar and restaurant licenses.
Tied-house laws make it illegal for a manufacturer to induce a retailer to sell only one brand of liquor. Lawmakers said the current letter of Pennsylvania law presents modern-day problems. For example, under the law, a landlord with a license to serve alcohol couldn’t lease space to a manufacturer of alcohol.
“Throughout the nation, a three-tier system is utilized that prohibits economic relationships between producers of alcohol and distributors of alcohol. This system was put in place to eliminate issues that arose following Prohibition,” Harris wrote in the bill’s memorandum. “Our liquor code has these protections by providing that no one may have an interest in more than one class of license. While this language is a necessity, certain components of how the law was drafted are no longer relevant in the 21st century.”
The committee’s executive director, Shauna Boscaccy, said that the law as it stood for over 80 years didn’t become a problem for businesses in Pennsylvania until the last five years with the explosion of brew-pubs.
“In this day and age it’s such an unnecessary prohibition,” she said.
One of the state’s most prominent breweries, Tröegs, has found itself in a legal pickle because of the outdated law, Boscaccy said.
Tröegs brewery sits on land owned by the Hershey Trust just outside of Hershey Park. Boscaccy said Tröegs is technically in violation of the law since Hershey holds a restaurant and liquor license.
While the amendments in HB 1902 are a step in the right direction, Harrisburg liquor licensing attorney Frank C. Sluzis said more sweeping reforms are needed.
“I’m not sure if it’s going to make that much of an impact,” Sluzis said. “If they would have eliminated all of the tied-house sections and allowed distributors also to have a retail license, I think there would have been a much more of an impact.”
Sluzis said a bigger problem is the state’s practice of auctioning off “zombie licenses”—another name for expired licenses. He recommended a system advocated by Rep. Frank Burns, D-Cambria, which would involve reallocating licenses and allowing them to be transferred between counties.
P.J. D’Annunzio can be contacted at 215-557-2315 or firstname.lastname@example.org. Follow him on Twitter @PJDannunzioTLI.