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Pa. senator sees support to privatize wine, liquor

Marc Levy, Associated Press

HARRISBURG, Pa. (AP) -- A second hearing in front of Pennsylvania state senators Tuesday on the liberalization of wine, beer and liquor laws appeared to solidify support for legislation that would allow private-sector sales of wine and liquor, but would not end every aspect of state control, as Gov. Tom Corbett has sought.

Many questions by senators on the Law and Justice Committee probed for whether representatives of groups that make and sell alcoholic beverages could support a plan similar to one favored by the committee chairman.

"I heard a lot of reinforcement for moving ahead, changing the system, allowing some private access points for wine and spirits, but I also heard a lot of testimony saying we could live within the current license structure," Sen. Charles McIlhinney, the Bucks County Republican who chairs the committee, told reporters after the hearing.

Still, he said, "I'm still trying to craft a bill though that gets 26 votes, so we'll see what happens in the next month."

The hearing, the second of three that are planned, was motivated by pressure from Corbett to shut down the Depression-era state-controlled wine and liquor store system and allow the sale of alcoholic beverages by grocery stores, big box stores, convenience stores and other outlets.

A bill that passed the House in March would create 1,200 new private wine and liquor store licenses and allow thousands of bars, restaurants and grocery stores to begin selling bottles of wine. Corbett wants a bill on his desk by July 1.

McIlhinney is touting a plan that would allow the state's approximately 12,000 existing private beer licensees — eateries, bars and distributors, as well as supermarkets or convenience stores with a restaurant-style beer license — to buy licenses to sell wine and liquor and shatter state control of the goods.

That is "10 times the number in the House bill, albeit probably 30,000 less than the governor wanted," McIlhinney told reporters.

However, McIlhinney differs from the House and Corbett in two crucial elements on the subject of privatization, which has motivated the entire debate.

McIlhinney wants to allow the state Liquor Control Board to decide when private-sector service, selection and supply of wine and liquor are strong enough to shut down a local state store. Corbett had sought legislation that explicitly shut down the approximately 600 state stores, while the House plan created a set of competitive circumstances that would require the shutdown of state stores.

Also, McIlhinney may opt to keep the state-controlled wholesale wine and liquor distribution system, with changes to improve the delivery to licensees like restaurants, instead of shifting to a private system that is an "oligopoly" controlled by a couple companies.

"I'm not interested in turning it over to a small number of wholesalers that end up with ... a brand-specific monopoly," McIlhinney said.

The House plan and the governor's plan are effectively dead in the Senate, and McIlhinney stressed that people are more concerned with price and accessibility and less concerned with who owns the store.

"The governor announced privatization in January, and I went back to my district and asked my constituents at town hall meetings and they said, 'Yeah, I'd love to buy a six-pack in the beer store.' Well that's not privatization," McIlhinney said. "It's evolved in the public opinion that the bigger, comprehensive 'how we buy all types of alcohol' is what's at stake."

Under McIlhinney's plan, some beer licensees could switch entirely to wine and liquor or stock none at all.

McIlhinney also has suggested that he would be willing to relax the restaurant-style seating, food and space requirements that supermarkets, convenience stores and other retailers must obey if they want to sell alcoholic beverages. Meanwhile, beer licensees would be free to sell in a wider variety of volumes.