Craft Beer Contributes $2B to PA’s Economy. It Would Contribute More if More Businesses Could Sell It

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Randy LoBasso points us to a study from the Brewers Association that says craft beer contributes $2 billion to PA’s economy.

I can’t speak to how accurate their methodology is, but I can say for sure that we would get even more economic output from this industry if we got rid of the fake restrictions on who can sell beer, and how much.

PA has a couple of protectionist policies that actually hold down craft beer’s contribution to the economy, and it would cost the public nothing to get rid of them.

Package reform 

You know how Tom Corbett was making a big deal about how potato packaging reform would help potato farmers? Starting this February, the state will start letting potato farmers sell potatoes in whatever size package they want, instead of restricting them to packages of just 3 pounds or less.

We should do the same thing for beer! Right now beer distributors have the opposite problem – they can only legally sell beer by the case because R license holders (restaurants and bars basically) have a monopoly on six-packs.

But wait, can’t you buy beer in some grocery stores? Yes – if those grocery stores have some tables and chairs, the PA Supreme Court thinks those places count as “cafes” who are eligible to bid on R licenses against bars and restaurants. That’s weird, and so are the packaging rules.

Yes restaurants and bars will hate giving up their monopoly on six-packs, but letting all the different types of businesses who sell beer carry six-packs will help craft brewers by letting people try unfamiliar beers in smaller doses. Would you buy a whole case of a brand you’ve never heard of before? Probably not, but you’d buy a six-pack or an individual beer. That’s why expanding the right to sell six-packs helps small brewers.

End the County Quota System

Notice how I said grocery stores with tables and chairs can “bid” on an R license? That’s because the state caps the number of R licenses at 1 per 3000 people per County. That works out kinda sorta okay in places like Philadelphia, where high population density ensures a decently high density of bars, and restaurants with drink menus.

But the licenses still go for like $80K,¬†and in smaller Rust Belt cities with older downtown areas that would love to be transformed into nightlife clusters, the lower population densities mean liquor licenses can go for like $150-200K. Just to open a modest corner bar, or add a beer list to your restaurant menu? That’s nuts.

It would cost the state of Pennsylvania basically nothing to print triple or quadruple the number of liquor licenses, so that all of these empty storefronts can become restaurants and bars. Incumbent R license holders would hate it, but who you gonna run the state for? Some rich fucking asset owners, or the good beer-loving people of Pennsylvania? With more bars, and specifically more new bars who are clued into recent beer trends, craft brewers would sell more beer.

PA is fortunate enough to have a large number of creative craft brewers, and we can help them grow their businesses without spending any money or even cutting their taxes. The taxes aren’t the problem, contra Bob Casey, the problem is the fake scarcity of beer sellers stemming from these dumb Prohibition-era monopoly policies.

This entry was posted in Economic Development, Economy.

6 Responses to Craft Beer Contributes $2B to PA’s Economy. It Would Contribute More if More Businesses Could Sell It

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  2. Lew Bryson says:

    “Yes restaurants and bars will hate giving up their monopoly on six-packs…”

    And as my local beer distributor brought up over the holidays, the bars just got small games of chance, essentially for free, not as any part of a deal over sixpacks. Would have made a perfect opportunity for package reform.

  3. Pingback: Craft Beer Contributes $2B to PA's Economy. It Would Contri | Beer Infinity

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