Fontana Discusses Liquor Store Modernization

Over the past year, there have been talks about privatizing Pennsylvania’s liquor store system. However, a consensus has not been reached. In the mean time, state officials have been exploring other options on how to improve the current system.

In February, the Pennsylvania Senate held budget hearings and met with the Pennsylvania Liquor Control Board (LCB) Chief Executive Officer Joe Conti. Mr. Conti suggested that some modernization policies should be enacted including greater flexibility in pricing, longer store hours, and changes to hiring and inventory practices. Overall, modernizing the system will help make liquor stores more efficient, consumer-friendly, profitable and competitive.

In an attempt to start addressing some of the state store issues, the Senate Appropriations Committee passed Senate Bill 790 (SB 790) on March 13. This legislation would allow for direct wine shipments to customers in our state. I voted in favor of this bill and it passed by a 23-2 vote.

This legislation would permit a direct shipper, who has obtained a license from the LCB, to send up to 18 liters per month of wine to residents of Pennsylvania.  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. A licensing fee of $100 per facility will help offset any costs the LCB may incur in administering this program. Furthermore, a winery would have to pay all taxes that would be due as if the sale was made at a Wine and Spirits store located in our state. It is believed that the LCB will likely see an increase in profits from the licensing fee as well as in sales and tax revenue by allowing customers more product choices.

Pennsylvania currently forbids direct-shipment of wine to consumers except in very limited circumstances. Our state law does allows larger wineries with direct shipping licenses—producing more than 200,000 gallons a year—the ability to sell product online to customers, but the wine must be shipped to a state store of their choice where the customer may then pick it up. This can only take place if the state liquor store does not carry that specific product.

A U.S. Supreme Court ruling in 2005 proclaimed that states allowing in-state wineries to direct-ship their product must also allow out-of-state ones to do so.  However, Pennsylvania’s laws remain complicated when it comes to direct shipment of alcoholic beverages. For many years, legislation has been introduced to resolve this issue; however, a passage was delayed because of obstacles of how to regulate this industry.

If passed by the General Assembly, the law will go into effect 60 days after the Governor has signed the bill.

I believe that this is first step for our state to make the purchase of wine more convenient for consumers as well as hopefully paving the way for added convenience in the purchase of other alcoholic drinks like beer. At the same time, I feel that the General Assembly needs to look at ways to modernize the current system and address some of the issues. To go forward, I support Senate Bill 1257 (SB 1257) in its current form which would grant the LCB more flexibility so that they can improve the operating efficiency and profitability of the agency while at the same time maintaining controls over things like underage drinking and purchasing of alcohol as well as protecting existing jobs.