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MBDAP President David Shipula's letter to Times-Tribune

April 28, 2008

Editorial writers like those at The Times-Tribune bewail the “monopoly” that beer distributors appear to have over the sale of beer in our communities while others say we need to be able to buy beer almost everywhere and anywhere because consumers have a right to “convenience.”

A March 26 Times-Tribune editorial recently opined that beer distributors have a “near monopoly under state law” on sales of malt beverages.

The definition of “monopoly” is “exclusive ownership through legal privilege, command of supply, or concerted action (or) exclusive possession or control (or) a commodity controlled by one party.”

The reality is that the Pennsylvania Liquor Control Board has issued more than 1,300 beer distributor licenses and requires that no individual or entity can own more than one. So, since no one can control as much as one one-thousandth of the marketplace, there can be no monopoly.

Besides that, there are some 10,000 restaurant licenses and 500 “e-license” holders who also can sell beer for off-premises consumption.

Thus, having control of one one-thousandth of the market to sell beer in case lots is a laughable comparison to a monopoly of any kind.

And, when you consider the number of places where you can buy beer in Pennsylvania — 10,000 restaurants, 500 e-license establishments and 1,300 beer distributorships — a question begins to form about what is a reasonable definition of “convenience.”

According to Merriam-Webster, “convenient” means “near at hand” or “close.”

How close is “close”? Consider that you can buy beer legally in more than 12,000 places in Pennsylvania. By comparison, Pennsylvania has — according to the U.S. Bureau of the Census — about 2,700 drugstores; 2,400 gas stations; 2,800 supermarkets; 3,100 used-car dealers; 650 auto parts stores; and 1,200 florists.

About the only way it could be more convenient to buy beer in Pennsylvania would be if someone would come door-to-door. (By the way, a number of beer distributors still offer home delivery.)

All that beer distributors ask, as small-business owners, is a level playing field and adherence by all to the letter of the law that the Legislature and PLCB require us to live by.

Individual beer distributors can own one and only one license for retail, off-premises consumption — and then only in quantities of one case or more of beer. Already, Wegmans has been granted six licenses by the Liquor Control Board.

Who, indeed, is more likely to be headed for the ability to control the market?

In fact, the buying power of large supermarket chains like Wegmans makes it very difficult for small food and beverage producers to compete profitably. Shelf space is at such a premium in supermarkets that manufacturers and distributors are forced to pay “slotting allowances” to even get their products displayed on supermarket shelves.

Left to “market forces” in the “big box” store environment, it would not be long before the malt beverage aisles would be under the control of two or three major manufacturers just like the soft drink aisles where only Coca-Cola, Pepsi and generic store brands get any display. Craft brewers and micro-breweries — unless they had enough volume to supply every store in a chain — would be locked out and consumers would see less, not more choice.




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