Eighth Auction License Bids due March 25.

Auction selection is controversial.

The LCB has scheduled its 8th zombie license auction for March 25.  Sealed bids include one license in each of the following 25 counties: Berks, Blair, Bucks, Clearfield, Dauphin, Delaware, Elk, Erie, Fayette, Huntingdon, Lackawanna, Lawrence, Lebanon, Lehigh, Lycoming, Mercer, Monroe, Montgomery, Northampton, Philadelphia, Pike, Sullivan, Venango, Wayne and Westmoreland.  Philadelphia and Bucks are interesting choices.

First, while the state enacts legislation regarding a priority problem with the Philadelphia stop ‘n go, it also offers one more license to be active in the City of Brotherly Love.

Next, the inclusion of Bucks County raises other interesting questions.  Before the 7th auction, the licenses in Bucks County brought some of the highest prices.  High bids were $301,000 in Bristol Township for the first auction and $351,000 in the 6th for one in Plumstead Township.   In the 7th, probably to everyone’s surprise, Sly-Tom’s Enterprises LLC, a six pack shop, was able to secure a license in Bristol for $33,344, about 10% of the average price for the county.  In addition, there are 19 licenses held in safekeeping in Bucks.  This apparent lack of interest in a Bucks licenses as reflected by the bidding makes one wonder why another is put on the block in the current auction.

In other counties, licenses are being auctioned while private enterprise restaurant owners either have one for sale or in safekeeping.

The LCB has not published its criteria for how it decides which licenses will be offered and in what counties they are located.  In 2007, while attempting to defend its decision to allow an “E” licensee to decline to sell on-premises alcohol, and only sell take out beer, the LCB argued, citing Code Section 104, that “to construe the Liquor Code in a manner that would require on-premises consumption in addition to takeout sales would lead to an absurd result in the context of a statutory scheme designed to limit (rather than promote) the sale of alcohol.”  The Supreme Court rejected this argument noting that the General Assembly created “niche” markets which the LCB cannot disrupt.

However, if one applies this stated objective, taken from the Liquor Code, the LCB should be careful in selecting what licenses are to be auctioned.  It should only pick those in areas where there is a compelling need that will not negatively impact on the private marketplace.