The flow of beer to Pennsylvania bars, taverns, and licensed restaurants is slowing, as supply chain issues are forcing distributors to limit deliveries. In yet another sign of the times caused by the COVID-19 pandemic, the growing situation has establishments frustrated and looking for reasonable business solutions.

While reports have filtered in from various parts of the state including the southeast and northwest, the Pennsylvania Licensed Beverage and Tavern Association (PLBTA) says the epicenter appears to be in the southcentral section, where with little warning, Ace Beer Distributors (Universal Products, Inc. – LID 23446) informed bars, taverns, and clubs that they were cutting back deliveries to only twice per month.

On their website, Ace describes itself as representing “more than 350 brands (more than 2,000 products distributed!) from over 130 supplier partners and services over 1,400 direct retail partners across Lancaster, York, Adams, Franklin, Fulton, Cumberland, Dauphin, Lebanon, Perry, Mifflin, and Juniata counties.”

According to sources sharing information with the PLBTA, a labor crisis is to blame, specifically a lack of drivers.

In a recent letter to the Pennsylvania House Liquor Control Committee and the Pennsylvania Senate Law & Justice Committee, Chuck Moran, executive director of the PLBTA, told committee chairs that “the decision by Ace is quite problematic for small businesses that rely on the wholesaler.” Moran continued by writing, “Many family-owned taverns and bars do not have enough storage space to handle 2 or 3 weeks of malt beverage supplies.”

One club licensee recently wrote to the Pennsylvania Liquor Control Board with concerns about Ace’s delivery decision. The PLCB responded that the club could not pick up their own supplies, and they could not go out of a wholesaler’s territory to attempt to purchase supplies.

The only options offered were 1) to attempt to get a delivery from a smaller distributor (if they would even do so) within the wholesaler’s territory or 2) swap out popular more affordable national brands with local brands from breweries that deliver.

But delivery problems are not new. Before the pandemic, there were similar issues to a lesser degree; however, now those problems are being amplified.

A statewide membership survey conducted by the Pennsylvania Licensed Beverage and Tavern Association in 2019 showed that nearly 40 percent of PLBTA members surveyed had fewer delivery date options and nearly 20 percent had experienced delayed delivery of malt beverages from distributors. And more than one out of three members had run out of certain malt beverages and had to wait for a resupply.

Further complicating the issue are outdated liquor laws. By law, bar owners can only receive beer delivered from retail and importing distributors and can’t pick it up themselves.

While licensed bars, taverns and clubs can purchase liquors at a state store and personally deliver the supply to their bar or tavern, current law does not allow them to pick up and personally deliver malt beverages to their own establishment.

“In late 2019, we suggested a reasonable business solution to this problem, proposing legislation that would allow R, H, E, and club licensees to pick up a limited ‘emergency’ supply of beverages from the wholesaler or distributor and then deliver that supply to their own establishment when the wholesaler was unable to make a timely delivery,” Moran wrote in his letter to the legislative committees that oversee industry-related matters.

For now, Moran says his association hopes the legislature as well as distributors will listen to these concerns and help build business solutions.

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The Pennsylvania Licensed Beverage and Tavern Association is the statewide political voice for small business taverns and licensed restaurants. Based in Harrisburg, the Association formed after Prohibition in 1941, reorganized in 2019, and today advocates for best practices and rights within the industry as well as best experiences for patrons. To learn more, visit www.pataverns.com or follow the Association on Twitter via @TavernPA.

 

COPY OF LETTER SENT TO COMMITTEES

June 1, 2022

Hon. Carl Metzgar, Chair
Hon. Dan Deasy, Democratic Chair
House Liquor Control Committee

Chairmen Metzgar  and Deasy,

Three years ago, our Association alerted the House Liquor Control Committee and Senate Law & Justice Committee Chairs that delivery of malt beverages to bars and taverns was becoming problematic for our Members because growth in businesses selling beer and malt beverages at retail locations had increased considerably, slowing down deliveries to smaller licensees and causing bars and taverns to periodically run out of supplies and lose sales opportunities.

Today, as the industry struggles to recover from the losses created by Covid-19, this problem has been magnified. The issue of slow, or limited deliveries has gotten worse in 2022, as the entire alcoholic beverage industry continues to face labor issues and struggles to fill positions. While PLBTA is sympathetic to distributors’ labor problems, we also believe that a simple modernization of law could quickly resolve these issues for our Member bars, taverns and restaurants. By law, bar owners can only receive beer delivered from retail and importing distributors and can’t pick it up themselves. While licensed bars, taverns and clubs can purchase liquors at a state store and personally deliver the supply to their bar or tavern, current law does not allow them to pick up and personally deliver malt beverages to their own establishment.

In late 2019, we suggested a reasonable business solution to this problem, proposing legislation that would allow R, H, E, and club licensees to pick up a limited “emergency” supply of beverages from the wholesaler or distributor and then deliver that supply to their own establishment when the wholesaler was unable to make a timely delivery.

To cite one recent example, with little warning, Ace Beer Distributors (Universal Products, Inc. – LID 23446) informed bars, taverns, and clubs that they were cutting back deliveries to only twice per month. On their website, Ace describes itself as representing “more than 350 brands (more than 2,000 products distributed!) from over 130 supplier partners and services over 1,400 direct retail partners across Lancaster, York, Adams, Franklin, Fulton, Cumberland, Dauphin, Lebanon, Perry, Mifflin, and Juniata counties.”

The decision by Ace is quite problematic for small businesses that rely on the wholesaler. We are aware of similar problems ranging from Philadelphia to Erie. Many family-owned taverns and bars do not have enough storage space to handle 2 or 3 weeks of malt beverage supplies. In fact, one of our members recently attempted to do so, only to be cited by liquor control enforcement for storage issues.

One club licensee recently wrote to the Pennsylvania Liquor Control Board with concerns about Ace’s delivery decision. The PLCB responded that the club could not pick up their own supplies, and they could not go out of a wholesaler’s territory to attempt to purchase supplies. The only options offered were 1) to attempt to get a delivery from a smaller distributor (if they would even do so) within the wholesaler’s territory or 2) swap out popular more affordable national brands with local brands from breweries that deliver. Both options potentially would have negative financial consequences for the tavern, bar, licensed restaurant, or club.

These types of delivery issues are not limited to York County as similar problems have occurred in both SE and NW Pennsylvania. A statewide membership survey conducted by the Pennsylvania Licensed Beverage and Tavern Association in 2019 showed that nearly 40 percent of PLBTA members surveyed had fewer delivery date options and nearly 20 percent had experienced delayed delivery of malt beverages from distributors. And more than one out of three members had run out of certain malt beverages and had to wait for a resupply.

We believe in light of recent developments this has gotten worse and is untenable.

As the Association that represents small business taverns, bars, and licensed restaurants across the state, I am writing to you to ask your committee to consider legislation that provides reasonable business solutions to this growing problem so that family-owned establishments have reliable options available to meet their unique needs when wholesale beer distributors fail to deliver in a timely manner.

Sincerely,
Chuck Moran