Rep Lawrence proposes 10,000 new takeout Beer licenses
A Chester County Legislator is proposing a new law that allows R licensees to “split” and divide their license into takeout (beer-to-go) and on-premises functions, that can be held by separate individuals. Essentially creating 10,000 new takeout beer licenses.
The legislator, Rep. John Lawrence, (R – 13, the Southwest corner of Chester County), filed a sponsorship memo saying he wants to help “small mom-and-pop restaurants who want to serve a glass of wine … [and are] priced out of purchasing a liquor license….”
Rep. Lawrence desires to give R licensees the right “to split their license into two separate licenses – one for beer-to-go sales, and one for serving beer, wine and hard liquor on premises.”
This well-intentioned idea would, of course, destroy the investments of thousands of mom-and-pop owners of R, H, E, and D licenses. It would substantially “dilute the value of existing licenses for license holders”, an undesirable consequence that was, he says, a defect of other legislative plans to create more licenses.
If passed, this bill would enable most grocery and convenience stores to sell-off the on-premises function, something they tried to achieve a decade ago by getting the Liquor Board to misinterpret the Liquor Code and allow them to hold an E license without providing on-premises consumption. This proposal was defeated in the Supreme Court after suit by the MBDA.
Two courts said this would “significantly transform” the industry, adding that “it defies common sense” to allow merchants to buy a license designed for consumption on the premises to no longer provide this service.
The bottom line, of course is that while this bill would, perhaps, provide a small amount of marginal income to a handful of restaurant, it would again split the takeout market, reduce consumer selection as inventories decline, and empower grocery and convenience stores as it devalues an asset of small business owners who have already invested in an R, D, E or H liquor license.
It is a basic economic principle that in order to offer convenience and choice to consumers, a stated goal of the General Assembly, takeout businesses must have enough volume to enable them to sell brands that have a smaller following. Diluting the market has negative consequences to the consumer. Today, it is still the distributor that provides the largest selection in any local market. When food merchants got wine, they eliminated shelf space allocated to the slower moving brands of beer.
This Bill, if passed, would dilute markets, hurt small businesses who have already made investments, and reduce consumer convenience and selection.