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Pennsylvania House Approves Privatization Plan

March 22, 2013

Pennsylvania’s House of Representatives voted 105-90 yesterday to pass a bill privatizing the state’s wine and spirits retail monopoly. The bill now faces an uncertain fate in the state Senate, which is expected to begin debating the issue in the next month or two. Still, the vote marks progress for Pennsylvania Governor Tom Corbett, who has made privatization of the state’s wine and spirits business a priority.

As currently configured, the bill would allow beer distributors first right of refusal on the 1,200 retail wine and spirits licenses to be auctioned by the state. After that, other outlets like supermarkets and big-box stores could apply for licenses.

Speaking to reporters in recent days, Pennsylvania Senate Majority Leader Dominic Pileggi said that while the state’s lower chamber had been discussing privatization for some time, the move “is not something that has been an item of active interest and discussion in the Senate.” He warned that there is little chance the House bill will emerge from the Senate without alteration. Other Senate leaders have made clear they prefer a modernization of the state’s existing wine and spirits retail operation to privatization.

Several major brewers—including Anheuser-Busch, MillerCoors and Yuengling—have come out against the privatization bill as currently written, fearing it could lead to loss of shelf space for beer. Governor Corbett’s original plan would have seen beer’s availability widen to supermarkets, gas stations, big-box stores and other outlets, but that language was stripped out in the version passed by the House at the behest of beer distributors, who are wary of competition from new venues like supermarkets entering the beer retail business.

 

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