The Central Penn Business Journal reported in its December 7 edition that since the state’s first license auction in November 2016 the number of bids per auction along with the highest winning bids have dropped.

The first auction had 134 bids with the highest winning bid at $556,000. Two years later in November 2018, only 51 bids were received with the highest winning bid of $176,001. Overall the average winning bid has decreased from $212,000 to $73,915.

In the last two auctions, a total of 58 licenses were up for sale, but 13 received no bids.

Many of the large retailers dominated the early auctions, particularly in growing areas including suburban Philadelphia and Cumberland County.

The news organization also reported that there are still nearly 1,000 idle liquor licenses across the state. The article stated that state liquor regulators plan to continue holding auctions for expired licenses.

PLBTA member Mick Owens of Mick’s All American Pub and Maize Mexican Cantina was quoted in the story saying “The liquor license is an asset. It shows on your books. It’s a physical, tangible thing.”

He praised the auction process as a way to get dead licenses back into the marketplace, but also shared concerns about the high prices being a barrier to entry for small start ups. “The only people who can afford $500,000 for a license are the big players coming in and opening 300- to 400-seat restaurants,” he said.

The following is republished from the December 2018 edition of the Pennsylvania Observer, the official magazine of the Pennsylvania Licensed Beverage and Tavern Association.

Foodborne illness affects about 48 million people every year in the United States, according to the Centers for Disease Control and Prevention (CDC). A large number of these people – roughly 128,000 – will go to the hospital, and 3,000 will die.

Not all of this is caused by cross-contamination, and not all is the result of bad kitchen management in a restaurant or bar. But the CDC says foodborne illness outbreaks are more likely to begin at restaurants than a person’s home.

Alarmingly, industry statistics show a lack of knowledge on how to prevent cross-contamination. A study published in 2017 that was conducted by the Environmental Health Specialists Network of the CDC indicated many restaurants were not following U.S. Food and Drug Administration Food Code guidance regarding chicken cross-contamination prevention. Many managers lacked basic food safety knowledge about chicken.

In fact, 40 percent of managers said that they never, rarely, or only sometimes designate certain cutting boards for raw meat. One-third said they did not wash and rinse surfaces before sanitizing them. And, more than half of the managers surveyed did not know the temperature to which raw chicken needed to be cooked before it would be safe to eat.

Charles L. Lowe, MD, a physician with Geisinger Holy Spirit Primary Care in Mechanicsburg, Pa., says it’s a smart idea for taverns and restaurants to do everything possible to keep their patrons safe.

“We’ve all seen the headlines about people getting sick after eating at a certain restaurant,” Dr. Lowe says. “Serious health issues can develop from foodborne illnesses, which is why it’s paramount for restaurant and tavern owners to do everything possible to keep their patrons from getting sick.”

So, what should a tavern owner do to make sure patrons don’t experience a night of misery ranging from nausea and stomach cramps to vomiting and diarrhea … or even worse hospitalization or death?

Consider the following:

1. Prep and handle each food type with separate pieces of equipment. For example, if you’re using a cutting board to slice raw chicken, don’t use that same board next to slice beef.
2. Keep hands clean. Employees need to wash their hands regularly, especially after using a restroom or handling raw meat, poultry, or seafood. That means lathering all parts of their hands up to their elbows with soap, scrubbing for about 20 seconds, and rinsing with warm running water.
3. Use paper towels or hand dryers, not clothing, to dry off hands. It’s tempting to use a shirt or apron to dry hands, but it’s not a good choice.
4. Have a personal hygiene program in place. In addition to proper handwashing, wearing clean clothing every day, use hair restraints, and prohibit jewelry from being worn.
5. You may recall a past ‘Tavern Age’ article in Pennsylvania Observer that covered flu season. Well, personal health is another area of concern. Don’t let employees report to work sick. And, if they have any cuts or surgical wounds, make sure they cover them with appropriate bandaging.
6. Clean, clean, clean! All work surfaces, equipment, and utensils should be sanitized after each use. That goes beyond just rinsing something off.

 

Based on new information as of the evening of November 26, the Centers for Disease Control and Prevention narrowed its warning to consumers. The CDC is now advising that U.S. consumers not eat and retailers and restaurants not serve or sell any romaine lettuce harvested from the Central Coastal growing regions of northern and central California. If you do not know where the romaine is from, do not eat it.

Restaurants and retailers should check the label on bags or boxes of romaine lettuce, or ask their suppliers about the source of their romaine lettuce. Do not sell or serve any romaine lettuce harvested from the Central Coastal growing regions of northern and central California. If you do not know where your romaine lettuce was harvested, do not sell or serve it.

Since the last CDC update on November 20, an additional 11 ill people have been included in this investigation. Forty-three people infected with the outbreak strain of Shiga toxin-producing E. coliO157:H7 have been reported from 12 states.

Restaurants should wash and sanitize drawers and shelves in refrigerators where recalled romaine was stored. The CDC recommends the following steps to clean your refrigerator.

1. Throw out recalled food
2. Empty your refrigerator
3. Wash removable parts
4. Clean and sanitize the inside of your refigerator
5. Wipe food and drink containers with warm, soapy water before returning to the clean refrigerator.

To read the CDC’s latest update, click here.

 

An E.coli outbreak is causing concern and a warning from the Pennsylvania Department of Health to not eat or serve any romaine lettuce.

The state DOH warning came shortly after the Centers for Disease Control and Prevention (CDC) issued a health alert indicating they and others are investigating a multistate outbreak of Shiga toxin-producing Escherichia coli O157:H7 (E. coli O157:H7) infections linked to romaine lettuce.

According to the alert, the CDC advised U.S. consumers not eat any romaine lettuce, and retailers and restaurants not serve or sell any, until more is known about the outbreak. This investigation is ongoing and the advice will be updated as more information is available.

This advice includes all types or uses of romaine lettuce, such as whole heads of romaine, hearts of romaine, and bags and boxes of precut lettuce and salad mixes that contain romaine, including baby romaine, spring mix, and Caesar salad.

Restaurants and retailers should not serve or sell any romaine lettuce, including salads and salad mixes containing romaine.

Thirty-two people infected with the outbreak strain of Shiga toxin-producing E. coliO157:H7 have been reported from 11 states.

To read the CDC advisory, click here.

The recently published 2017-2018 Annual Report from the Pennsylvania Liquor Control Board (PLCB) includes a breakdown of the 76,000 license and permit applications processed and more than 8,200 investigations completed.

One area of note relates to nuisance bars, indicating a level number of investigations, but a decrease in notices of objection.

Under the provisions of the Liquor Code, the PLCB maintains a Nuisance Bar Program to review the operational history of any licensed establishment that, by its actions, may have abused license privileges. The Bureau of Licensing seeks information from the community, law enforcement agencies, and government entities on any adverse activity associated with the licensed establishment. If substantial evidence is received to support non-renewal, a notice of objection is issued.

According to the annual report, the total number of notices of objection dropped in 2017 to 64, down from 160 one year earlier. A total of 212 investigations of nuisance bars were conducted, remaining almost level with 221 during the previous year.

“Nuisance bars have no place in our communities,” said Chuck Moran, executive director of the Pennsylvania Licensed Beverage and Tavern Association. “The problems they cause give all tavern owners a black eye and do a disservice to those owners doing the right thing by being a good community neighbor.”

Of the 8,214 investigations conducted, manager changes accounted for 1,377. A total of 409 new licenses were also investigated. Other investigation categories included renewals and transfers.

The Pennsylvania Liquor Control Board (PLCB) released in late October its Fiscal Year 2017-18 Annual Report, which, for the first time, incorporated retail sales trends in a single, comprehensive publication detailing agency operations, popular products, and financial results.

According to the report, Pennsylvanians like their spirits. For those who follow where the dollars are being spent, check out the report’s sales figures:

• Regular spirits: $1.32 billion
• Regular wine: $847.5 million
• Special orders: $104.6 million
• Luxury wine: $54.1 million
• Luxury spirits: $6.3 million

Not surprising, December followed by November had the highest sales. The most popular spirits throughout the year sells in a range from $5.99 to $39.99.

The top selling spirit in 57 counties was unflavored vodka. American whiskey topped nine counties, while Canadian whisky was favored in one.  The items that exhibited the most growth in unit sales during fiscal year 2017–18 included Tito’s Handmade Vodka (1 L) (40,251.8 percent), Fireball Cinnamon Whisky (50 mL) (104.8 percent), and Tito’s Handmade Vodka (50 mL) (51.4 percent).

In terms of sales by county, Allegheny, Philadelphia, and Montgomery find themselves in the top three, combining for 34.9 percent of statewide sales. Other top counties include Bucks, Chester, Delaware, Lehigh, Lancaster, Westmoreland, and York.

The report also breaks out all counties by category of sales.

“This report can be very useful for tavern owners to find out what people from their counties are buying at nearby state stores,” said Chuck Moran, executive director at the Pennsylvania Licensed Beverage and Tavern Association. “From a marketing perspective, it could give our members hints of what types of liquor and wine people in their communities prefer.”

Within the past several years, Philadelphia City Council enacted an ordinance detailing certification requirements for bouncers.

The ordinance requires “that bouncers employed at covered establishments be registered and receive proper training, to prohibit employers from employing unregistered or untrained bouncers and to permit employers to refuse to hire bouncers with certain past criminal convictions; all under certain terms and conditions.” To read the full ordinance, click here.

Essentially, this prohibits bars and other places from employing security who have not completed an appropriate bouncer training course.

To become a registered bouncer, an individual must complete 16 hours of training from an approved
third-party training provider. A list of approved training providers is available at www.phila.gov/mdo.
Upon completion, the training provider must provide the individual with a certificate demonstrating that
the individual met the training requirements. The individual shall then submit a copy of the certificate to
the Managing Director’s Office by emailing it to bouncer.certificates@phila.gov. Once certified,
bouncers are required to complete an 8-hour refresher course every two years.

The Pennsylvania Licensed Beverage and Tavern Association encourages its members in Philadelphia to make sure their bouncers are certified and registered. All security personnel at restaurants, clubs, bars, and similar establishments must be certified and all establishments should have certificates on-site.

To learn more about Philadelphia’s bouncer certification program, click here. The City of Philadelphia also provides a frequently asked questions document, which can be found by clicking here.

 

The Pennsylvania legislature has passed a bill that makes things tougher on those arrested for driving while under the influence.

Senate Bill 961 was presented to Governor Wolf on October 18 after concurrence in the Senate by a 45-4 vote a day earlier. In addition, the bill passed in the House 184-1 just prior to the Senate’s final action.

Dear Members,

In the October 15 edition of Mid-Month Report, it was noted that there may be activities in the final voting days of the session that could impact tavern owners. Specifically, the Pennsylvania Licensed Beverage and Tavern Association through its lobbying firm ERG Partners was closely monitoring HB 1497 and HB 864.

Sure enough, in the days that followed that newsletter, those bills did see action. The following is an update.

HB 1497

There was an attempt in the Senate to amend HB 1497 to give Pennsylvania breweries a tax advantage over all other liquor licenses. The Pennsylvania Licensed Beverage and Tavern Association joined efforts through a strong coalition with other licensees to defeat this movement.

The language contained in a proposed amendment would have given breweries a special tax break by allowing them to charge sales tax on prices earlier and lower in the distribution process than any other retail licensee, putting breweries at a taxpayer-subsidized advantage over restaurants, taverns, grocery stores, clubs, convenience stores, and beer distributors.

This amendment, which was not the subject of any vetting or public hearing, claimed to remedy a Department of Revenue Tax Bulletin, not scheduled to go into effect until July of 2019, which closed a theoretical loophole that brewers argue allows sales by breweries to be the only beer sales in Pennsylvania on which sales tax is never charged.  This amendment, rather than making the sales tax structure uniform, would perpetuate breweries’ tax advantage over all other licensees making the new tax scheme not just unfair but also constitutionally suspect.

The Pennsylvania Licensed Beverage and Tavern Association joined with eight other organizations in a coalition that urged State Senators to oppose giving special tax subsidies to breweries.

In the end, the tax advantage was removed from the amendment, and HB 1497 did pass the Senate.  The bill addresses issues with alcoholic ciders, mixed use town center development projects, and public venues, but does not give a tax advantage to Pennsylvania breweries. A part of the bill also allows slot machine licensees to apply for a casino liquor license and sets a $1 million price on that license.  The bill now sits in the House Rules Committee, but may not get consideration before the General Assembly adjourns Nov 30.

HB 864

HB 864 addresses the Local Option Small Games of Chance Act.  And, you may recall that this bill in the Spring was amended in the Senate with the help of Senator Rich Alloway to help tavern owners by allowing them to keep a greater amount of net revenue and also to pay fewer taxes on gaming supplies.

That amendment passed in the Spring, but then the full bill was defeated the very next day.

The bill came back to life in recent weeks, but the Senate voted to revert back to an earlier version without the Alloway amendments.

However, a final charge by the Pennsylvania Licensed Beverage and Tavern Association lobbying team and others encouraged friends in the Senate to address the business model issues that are a negative to those interested in small games of chance.

On the floor of the Senate, two amendments were brought together, both helping taverns. An amendment from Senator Wayne Fontana put parts of the Alloway amendment back in play. And an amendment from Senator Lisa Boscola added “pools” as part of tavern gaming. The bill was amended on third consideration on October 17, and passed 42-7, before moving to the House Rules Committee last evening.  Again, we are unsure whether the House and Senate may return for further votes this fall.

Two important parts for tavern owners include an improvement in the percentage of net revenue allowed to be kept by tavern owners and a change in tax structure.

Regarding net revenue, currently tavern owners can keep 35 percent of net revenue. HB 864 was amended to allow tavern owners to keep 45 percent.

Regarding taxes, the current imposed tax of 60 percent of net revenue from tavern games sold by a licensed distributor to a licensee would be changed to 51 percent. In addition, sales tax may only be charged on the licensed distributor’s fee on the cost of tickets.

Tavern games in the amendment were defined as pull-tabs, tavern daily drawings, 50/50 drawings, e-tabs, pools, and tavern raffles.

What’s next for these bills?

Both bills currently sit in the House Rules Committee. October 17 was the last voting day of the session on the calendar for both chambers. At this point, it would be up to the House and Senate to come back to finish these bills and dozens of others that fell short of final passage last night.

At the moment, there are plenty of rumors floating around the halls of the capitol. While the bills could be dead, there is a slim possibility that they are not. The Pennsylvania Licensed Beverage and Tavern Association will continue to monitor this, and encourage the House to return after the elections to finalize HB 864 as it is written today. We will also continue to monitor HB 1497 to ensure no one receives a tax advantage over taverns.  In either event, we were successful in re-engaging on the hill and setting the stage for future efforts to level the playing field for all licensees.

So that we do not cause confusion, if HB 864 is finalized by the House before the end of this legislative session, the Pennsylvania Licensed Beverage and Tavern Association will provide members with a full analysis to help better understand changes.  At this moment, the current laws still exist, and tavern owners should continue to follow existing rules around gaming.

What should tavern owners do next?

It’s important for Pennsylvania Senators to hear from you with words of thanks. Senators Fontana, Alloway, and Boscola all deserve praise for their efforts on HB 864. So please take a moment and thank them either by phone or email.

There were a total of 42 (out of 49) senators who voted to pass HB 864 with the tavern-friendly language. A complete list can be found by clicking here. If you see your senator on that list, thank them as well.

To find contact information for any state senator, please visit http://www.legis.state.pa.us/cfdocs/legis/home/findyourlegislator/

Final thoughts

As noted above, the Pennsylvania Licensed Beverage and Tavern Association with a new lobbying strategy and new team – as well as a dedicated Board of Directors – was successful in re-engaging on the hill. Our association played a role in stopping one unfriendly amendment, while we helped move another that was friendlier.

Our efforts helped set the stage for the future to be on a level playing field.

Since September when we hired ERG Partners and started working with John Nikoloff as our chief lobbyist, positive strides are being made.  New relationships are being made, while damaged ones are being mended.

Throughout the fall session days, our mantra has been “The Taverns will continue to oppose legislation that provides advantages for competing organizations and categories of retail licensees at the expense of others and support legislation that levels the playing field for all.”

That’s fair, and will continue into the future.

This is indeed an exciting time to belong to the Pennsylvania Licensed Beverage and Tavern Association!

In an effort to continue the dialogue about the dangers of underage drinking, the Pennsylvania Liquor Control Board (PLCB) is encouraging students from across the commonwealth to participate in the 27th annual Alcohol Awareness Poster Contest.

“Earlier this year, we unveiled a new alcohol education campaign called Know When, Know How. This campaign teaches parents how to start a conversation with their children about the dangers of underage drinking. Our annual poster contest is an excellent way to continue those conversations,” said PLCB Chairman Tim Holden.

The contest is open to all Pennsylvania students in kindergarten through 12th grade, including those who are home-schooled or in private or parochial schools. Students may enter through their schools, clubs, or scout troops, or individually.

Entries must feature a clear no-use message about underage drinking and may be created using any artistic medium. Students are encouraged to use positive messages and images, such as the benefits of being alcohol free or alternatives to underage drinking.

Each year, approximately 50 posters are selected by a panel of judges for recognition. Each artist who creates a selected poster will be notified of his or her accomplishment and invited to attend a recognition ceremony in Harrisburg in April 2019, which is Alcohol Awareness Month.

Several students will receive $50, and one student from each grade (K-12) will receive $25. Some of the winning designs may be reproduced in various formats and distributed across Pennsylvania.

To learn more, click here.