Small Wine Shops and Distributors Score Huge Win Against the Pennsylvania Liquor Board

Today, the Pennsylvania Supreme Court affirmed a lower court decision that will make it less prohibitive and less expensive for wine distributors to ship bottles directly to restaurants and bottle shops.

Pennsylvania liquor laws are as outdated as they are confusing, so when sweeping reforms to the Pennsylvania liquor handling system happened in 2016, it felt like a monumental victory for consumers, producers, and sellers across the Commonwealth. More than 80 years after Prohibition, restaurants and hotels could now sell bottles of wine to-go, state liquor stores could stay open late, and consumers could order wine for direct home shipment. Small as these changes may seem, it was a big deal.

In the legislation, there was one specific detail that greatly benefited small restaurants and wine businesses: licensed specialty wine importers and distributors were now allowed to ship directly to restaurants and bottle shops, where previously the PLCB had set itself up as a middle man. The special order wines used to have to go through state liquor stores first before businesses could pick them up. For every shipment, businesses were required to pay “a near $2 handling fee per bottle” to the PLCB, according to Bloomsday cafe co-owner Zach Morris. Under the 2016 legislation, that interference was no longer legal. But according to business owners, the PLCB kept doing it anyway.

While it may sound in the weeds, the decision of the PLCB to keep playing the middleman made it even harder on small businesses with the arrival of the pandemic. State-run liquor stores were closed, which meant that shops like Bloomsday had nowhere to pick up special orders. “During the pandemic, you didn’t have to come to Bloomsday to buy our wine,” Morris says, “You could go online and purchase wine and have it legally delivered to your door.” Meanwhile, Bloomsday couldn’t get access to special order wine at all.

So A6 Wine Co., MFW Wine Co., and Bloomsday sued the PLCB. In May of last year, a judge on a Commonwealth Court panel found the PLCB in violation of the 2016 law, and today, the Pennsylvania Supreme Court affirmed the lower court’s decision. It is now illegal for the liquor board to require specialty wines — those trendy natural and biodynamic wines included — to go through the state store first. Reached for comment, a representative for the liquor board said they won’t be commenting “until we can take the time to evaluate the decision and its impacts to our operation.”

The way the system operated before was “mind-boggling,” Morris says. “If they had just followed the law initially, we would have direct delivered. We wouldn’t have had to lay off employees,” Morris says. “There would not have been a disruption to our restaurant.” The fees per bottle were crippling. And the arrangements to pick up cases of wine — when they could have otherwise been delivered direct to the store by suppliers themselves, as is the case with most restaurant wholesales — were time-consuming for business owners.

“This should be good for consumers, good for small business,” Morris says. And potentially, in the future, it could mean wine will be little more affordable for PA residents. “There are interests here that we need to chip away at first, and that could take time,” Morris says. “Hopefully, this is the gateway.”

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• Pennsylvania’s first major liquor reform bill since Prohibition becomes law [Penn Live]