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State should help brewers diversify, expand

2 min read

Gov. Gifford Pinchot – who was a visionary in other respects – disagreed with Prohibition’s repeal in 1933. He devised a system making it difficult to buy alcoholic beverages, and the commonwealth has had a long, torturous journey toward consumer choice that characterizes the rest of the market economy.

Most Pennsylvanians affected by the state’s absurd booze rules are consumers, but the byzantine system is even harder on businesses. The state government itself is the monopoly wholesaler and principal retailer for wine and spirits and, like any monopoly, doesn’t much care about customer service. Retailers can’t take their business elsewhere.

Gradually, public pressure and economics have forced the state government to peel back some layers of the regulatory onion, without eliminating many of the absurdities. Whether you’re 21 or a septuagenarian, for example, you have to present a photo I.D. to a clerk, at a separate checkout area in a market, to buy a maximum of 96 ounces of wine and 144 ounces of beer.

Now the state Legislature has a chance to further peel back that onion while nurturing a growing business sector.

Pennsylvania’s craft-brewing industry has managed to thrive despite restrictions. The state has 486 craft breweries, second-most of any state. They are an industry unto themselves, but also contribute to other industries, especially tourism.

Even more remarkable is that the state has nurtured the industry, imposing a tax of just 8 cents per gallon on beer – the fourth-lowest rate in the nation, for which the average is 26 cents – even while maintaining some of the nation’s highest taxes on wine and spirits.

Nationally, another growing trend is local craft distilleries, which often develop in concert with local breweries. Pennsylvania is behind that curve because of another aspect of state law. Companies may hold brewery or distillery licenses, but not both at the same location.

Industry advocates testified recently at a legislative hearing at Wallenpaupack Brewing Co. in Hawley that similar restrictions have been lifted in Ohio, Maryland, New York and other states.

Pennsylvania should do likewise to bolster a growing industry, and tourism, without diminishing its own regulatory authority or adversely affecting competition.

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