(The Center Square) – A new analysis concludes that selling ready-to-drink cocktails outside of Pennsylvania’s state-run liquor system could generate $184 million in tax revenues.
Spirits-based drinks represent the fastest growing alcohol category both nationally and across the globe, according to IWSR, a company that analyzes alcohol market trends.
But limiting Pennsylvania’s market share to its 625 state-owned Fine Wine and Good Spirits stores leaves money on the table, the Distilled Spirits Council of the United States said Thursday.
“Updating the distribution and taxation laws will increase shopping convenience, allow consumers to enjoy spirits-based RTDs at more affordable prices, and generate millions of dollars in return for the commonwealth,” said David Wojnar, the council’s vice president and head of state public policy.
The council used a model that allows wholesalers, distributors and wine-expanded permit holders across the state to sell RTDs, too, and collect an 18% excise tax on each transaction. Doing so would increase the footprint of retail locations selling RTDs to 2,600. The analysis projects that 11.7 million cases, worth an estimated $1 billion, could be sold after a market adjustment period of three years.
The idea has permeated into the General Assembly, where Rep. Greg Rothman, R-Camp Hill, sponsored a bill to free RTDs from the confines of state-run stores. He said it’s got the support of other members in the House Liquor Control Committee and the Senate Law and Justice Committee.
Critics argue, however, that Rothman’s bill gives an unfair advantage to beer distributors and other license types not previously approved to sell liquor.
Chuck Moran, executive director of the Pennsylvania Licensed Beverage and Tavern Association, said the organization supports the expansion of RTD sales to only R and H licensees, which include restaurants, bars, taverns and hotels. He cited Act 39, a 2016 law that loosened restrictions on alcohol sales across the state and allowed beer distributors to begin selling six packs of beer – a right once given exclusively to R and H license holders.
“Today, beer distributors can sell anywhere from a bottle to cases to kegs, while R and H licensees can’t sell above 192 ounces,” he told The Center Square in March. “There’s an uneven playing field as a result. If the state is going to expand liquor sales through RTDs being sold by beer distributors, once again it will hurt the R and H licensees.”