A plan pushed by Pennsylvania Gov. Tom Corbett and the state House majority leader to shut down state-owned wine and liquor stores and auction off retail liquor-store licenses to supermarkets and other private operators collapsed Tuesday in a House committee meeting controlled by their fellow Republicans.
Instead, Republicans on the House Liquor Control Committee voted unanimously to scrap a bill proposed by Majority Leader Mike Turzai, R-Allegheny, in favor of a plan that supporters say would strengthen the profitability of the state stores while providing more options for people in Pennsylvania to buy wine and beer from private retailers. In part, the bill would allow the state's approximately 1,200 retail beer distributors to apply for licenses to sell wine.
Even though the bill keeps open the state stores, Republicans called it the only privatization legislation that has won a committee vote in Pennsylvania since Prohibition. All 10 Democrats on the committee opposed the bill, although they supported an amendment to it that would give the state Liquor Control Board a freer hand to operate the stores.
Prospects for the bill are not clear in the full House, and a raft of proposed amendments are expected to emerge on a topic that has proven to be as complicated as any for the Legislature over the years. Turzai cast the committee's vote as a victory for privatization, but he also suggested that he wasn't giving up, saying that he would work to "enhance" it.
Liquor Control Committee Chairman John Taylor "put his mark on the privatization efforts that he could support as part of a transition approach, and it was a big step, it was a very positive step," Turzai said.
Other GOP governors as far back as Dick Thornburgh in the late 1970s and '80s made liquor store privatization efforts, but those efforts died in the Legislature and Democrats continue to oppose them today. And while Corbett and Turzai have argued for over a year that the state should not control the wine and liquor business, as few other states do, many Republican lawmakers have not sided with them.
Taylor, R-Philadelphia, defended the bill as a better transition to a private market than Corbett's idea because it would allow good stores to thrive without costing the jobs of 4,300 state-store employees and get major food and liquor retailers get into the business.
"On paper, this looks to be 'privatization-lite,'" Taylor said. "If you play it out, it's much more significant in terms of what will happen after this is passed. ... I think you'll have a hybrid approach in terms of the retail market, as well.
"You'll have a Total Wine (store) in Pennsylvania, you'll have mom-and-pop operations, you'll have supermarkets with this ability to do it and I think that's significant enough without doing damage," he said.
Under the bill, restaurants, bars and beer distributors could sell beer in a wider variety of quantities. The retail beer distributors, which currently sell cases and kegs of beer, could get $50,000 licenses to sell wine. For a price of $100 million per license, a private wine wholesaler could compete with the state Liquor Control Board, which holds a monopoly now, to sell wine to restaurants, bars, hotels and the newly created retail wine and beer distributorships.
The state stores would remain the only licensees that could sell hard liquor, and the Liquor Control Board would get more power over purchasing, pricing and setting the hours that its stores can operate, including opening more stores on Sunday than the approximately 150 allowed by law.
Taylor said he would expect some beer distributors to sell their licenses to supermarkets or other retailers that want to take over the business, get a retail wine license and attach a beer and wine store. About 100 convenience stores, groceries and supermarkets currently sell beer through retail restaurant licenses, Taylor said.
Copyright 2011 The Associated Press.