Pennsylvania to Allow Wine Sales in Grocery Stores

Wineries to benefit as governor signs bill allowing direct shipping and grocery sales

by Linda Jones McKee
wine pennsylvania grocery sales governor law
Pennsylvania Gov. Tom Wolf signs a bill today that will allow grocery stores and convenience stores to sell wine outside of the "state store" system. House Bill 1690 will go into effect in 60 days.
Harrisburg, Pa.—Pennsylvania Gov. Tom Wolf signed legislation today that reforms the way wine, beer and distilled spirits are sold in the state. Long known as a “control state,” Pennsylvania has permitted sales of liquor and wine only at “state stores” owned by the Commonwealth of Pennsylvania and operated by the Pennsylvania Liquor Control Board. The only exception was made in 1968, when legislation was passed that allowed “Limited Wineries” to produce and sell up to 250,000 cases of wine per year. Now, House Bill 1690 will allow grocery and convenience stores that already sell take-out beer to sell up to four bottles of wine to a customer. Licensed restaurants, hotels, bars and delis also will be permitted to sell the same quantity of take-out wine.

In addition, the legislation addresses the issue of direct shipping to Pennsylvania residents. After paying $250 for a direct wine shipper license, wine producers will be permitted to sell up to 36 cases of wine per year to each Pennsylvania resident of legal drinking age. Each licensed wine producer will also pay a per-gallon tax to the Pennsylvania general fund. Republican legislative leaders believe that these legislative changes will provide an increase of about $150 million in revenue in the next fiscal year.

House Bill 1690 passed the Pennsylvania House by a vote of 157-31 on June 7, and it will take effect 60 days from today. The Senate had passed the legislation Dec. 10, 2015, but it did not advance as the issue of privatization of the state store system became entangled in the state budget debate between the Republican-controlled legislature and Gov. Wolf, who is a Democrat. The June 7 vote was unexpected, as it was not included in plans for this week’s legislative session.

Jamie Williams, president of the Pennsylvania Wine Association and vice president of the Winery at Wilcox in Wilcox, Pa., told Wines & Vines that there are numerous positive aspects to the new bill. “It settles the shipping problem,” he said. “The per-gallon tax paid into the general fund will provide at least $1 million that will go to the Pennsylvania Wine Marketing Research Board.” That board will then make grants for marketing and research projects to local wineries.

“It puts us on a par with Virginia and Ohio and other states that get funding from their state governments,” Williams said.

Under the new legislation, limited wineries in Pennsylvania will be able to sell beer produced from licensed breweries and liquor produced by licensed distilleries, and craft distilleries will be able to sell beer and wine for on-site consumption. “It makes a lot of sense. It opens up reciprocity for Pennsylvania wineries, breweries and distilleries to be able to sell each other’s products,” Williams said.

Some Pennsylvania wineries already have a license to produce distilled spirits. Linda Rice, owner of Mountain View Vineyard Winery & Distillery in Stroudsburg, Pa., said, “The new law will allow us to sell all of our products in the same room and ring up our customers on one cash register. Currently, the law requires us to sell our wine and spirits in separate rooms with separate cash registers. When visitors come for tasting experiences, they legally have to be kept apart.” She believes the change will eliminate an inconvenience for customers and increase sales.

Rice also thinks that the changes to direct shipping “will certainly help us satisfy our customer requests and allow us to increase sales.” She noted that the new law will allow Mountain View to sell their handcrafted distilled spirits at farmers’ markets as well as their wines.

As the owner of a small winery that also makes distilled spirits, Rice said that the changes in excise taxes on distilled spirits will also be an important business tax savings for craft distilleries. “Currently a small winery receives a discount on excise taxes paid as compared to a large winery,” she stated. “The new bill will reduce the excise taxes similarly for a small craft distillery.”

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