Become a Member of PA Taverns
Preferred Vendors of PA Taverns

PA Taverns

PaPolitics

By in Latest News Comments Off on Testimony: Industry Survival and Recovery Needs to Preserve Businesses and Jobs

Testimony: Industry Survival and Recovery Needs to Preserve Businesses and Jobs

The following is testimony presented to the Pennsylvania House of Representatives Republican Policy Committee on July 28, 2020, by Jim DeLisio, PLBTA Board Member and York County Tavern Association President. Mr. DeLisio is also the owner of the Racehorse Tavern. Joining him to present was Chuck Moran, Executive Director, PLBTA. The testimony was provided as to discuss problems the COVID-19 crisis has caused for the tavern industry, and to raise awarenes of industry needs to survive.

Chuck Moran

Chairman Causer, members of the Committee, good morning. I’m Chuck Moran, executive director of the Pennsylvania Licensed Beverage and Tavern Association. With me is Jim DeLisio, a Board Member of the Pennsylvania Licensed Beverage and Tavern Association and also President of the York County Tavern Association. Jim is the owner of the Racehorse Tavern, an independent family-run establishment in Thomasville.

Let me begin by thanking you for inviting the Pennsylvania Licensed Beverage and Tavern Association to testify today about our struggling industry as a result of the COVID-19 crisis and state orders. We appreciate being here to share the story of our Members and industry.

I’m going to start off with some general information about our Association, our Members, and our industry. Then I’m going to ask Jim to tell his story and the daily struggles that he and his employees face daily.

The Tavern Association represents more than 400 small business taverns, pubs, and licensed restaurants across the state. Most of our Members own “R” and “H” licenses while some may have an “E” or even a club license.  For the most part, we are your local bars, taverns, pubs, and licensed restaurants.  We do not actively recruit large chains, grocery stores, or convenience stores which have an R license (and many have Wine Expanded Permits).

In terms of business, our average Member makes a living primarily from alcohol sales. In fact, based on our Membership studies, about 63 percent of their business is alcohol sales and 37% of sales are from food.  For what it’s worth, the most popular beer served would be Bud, while the most popular mixed drink would be Jack and Coke.

Based upon Membership studies, our average member employs about 16 individuals including the owner and family members. They serve less than 4,000 customers every month. If you count the chairs and barstools, throughout my Member establishments, you’ll find less than 100.

Again, my Members are your locally-owned, mom-and-pop businesses.

For the sake of overall industry data, looking at the state list of active R and H licenses, there are about 9,400 licensees that are not grocery stores, convenience stores or large chains.  These are primarily small businesses.

Knowing that my average Member employs about 16 individuals, Pennsylvania’s small business R and H licensees create around 150,000 jobs.  And, assuming national industry data is correct, you can anticipate more than half are women, many of whom are single mothers.

Based on one national study from earlier in the crisis, 81 percent of these employees have been laid off or furloughed early in the crisis. We worry that with the latest state orders, many of those who returned to jobs are now almost assuredly facing another layoff.

One national research institute estimated that restaurants have only a 15 percent chance of remaining open if the crisis lasts six months. We are now four full months into this crisis, and we worry that the latest state orders will accelerate closures.

Since March, these small business establishments along with their employees have been on a downward spiral. I’ve spent many hours on the phone talking some off the edge. For the owner, their business is their retirement package. For their employees, the job they have is extremely important to keep up with their bills.

They are all scared and I can hear the panic in their voices when they call.

To give you an example of how serious the situation has become, I have one Member that I was so worried about that I gave her the phone number for the Suicide Prevention Hotline.  I get daily calls and emails telling me that members are being forced to close their doors.

My job has suddenly become that of a counselor and I literally spend hours every day listening to or responding to emails from Members who are desperate.

In March and April, those who remained open were just barely keeping their heads above water when allowed only to offer take-out service. Some didn’t even open, because there was no way to NOT lose money operating on sales of less than 10% of normal.

That’s ten percent of normal, with 100% operational costs in an industry where the profit margin is well below five percent.  Let that sink in.

Thankfully, your work to legalize mixed spirits drinks to go on a temporary basis was a lifeline that kept many afloat through that stage of the crisis. And your efforts to push for outside seating under the Yellow Phase allowed many of them to at least ride along in hopes of a resurgence of business when their counties went Green.  We thank you for doing so.

My Members thought they were beginning to see the light at the end of the tunnel as each county graduated from Red to Yellow and then to Green. While not the perfect business scenario for the industry, establishments were able to restart outdoor and indoor service with limitations.

But, it turned out to be false hope. Governor Wolf’s order on July 15 was a set back for every tavern and licensed restaurant in the state – including the good apples who were doing everything right. It closed their bar seating, further limited indoor seating to 25 percent, and required a meal to be ordered with drinks either indoor or outdoor.

The impact of the Governor’s so-called “targeted” response has been negative, especially so in areas of the state with low COVID statistics. The broad brush stroke – at a time when state enforcement data shows a low number of warnings and no citations – is quite questionable. It’s a shotgun approach that has had collateral damage. Simply put, it’s hitting the wrong targets. The revised order cast a large net, but only caught the good apples, letting the bad apples continue to operate as if nothing is wrong.

Our industry at a tipping point. Our local taverns and licensed restaurants need help if they are going to make it through this crisis and save jobs.

You have with our testimony a list of recommendations from our Association. While many are relying on the federal government to provide an industry bailout, we are also calling upon the state to do something.  In fact, there are quite a few things that should be considered to make a difference and ease some stress. These range from additional grants to erasing licensing fees for two years – one year to make up for this lost year and one year to help with recovery.

At this point, I’ll turn the mic over to Jim to tell his personal story.

Jim DeLisio

  • Personal story of his business
    • Initially closed
    • Rethought business model
    • Costs associated with license
    • Cost associated with safety compliance
    • Impact on his employees
  • York County industry observation
    • Industry needs 65-to-70 percent capacity just to break even
    • Bartender and server tips are down overall
    • Estimates that 10-15% of bars in York County have had to close for good, while another 30 to 40% are temporarily closed.

Again, thank you for this opportunity. If you have any questions, we’ll be happy to provide thoughts.

 

By in Latest News Comments Off on PaTaverns To Testify On Industry Survival And Recovery Needs

PaTaverns To Testify On Industry Survival And Recovery Needs

The Pennsylvania Licensed Beverage and Tavern Association (PLBTA) will testify on July 28 in front of the Pennsylvania Majority Policy Committee, chaired by Rep. Martin Causer (R-Cameron/McKean/Potter), to discuss how COVID-19 mitigation efforts are negatively impacting small business licensed restaurants and taverns across the state.

Representing the PLBTA will be Jim DeLisio, owner of the Racehorse Tavern in Thomasville and a member of the PLBTA Board of Directors. Mr. DeLisio is also president of the York County Tavern Association. Joining Mr. DeLisio will be Chuck Moran, executive director of the state association.

As the leading advocate for Pennsylvania’s small business taverns and licensed restaurants in Harrisburg, the PLBTA has been calling upon state leaders to piece together a survival and recovery program.

“Simply put, the state’s current COVID-19 order threatens both businesses and jobs,” says Moran. “Our industry is at a tipping point, and without assistance you can expect even more of these valued community gathering spots to disappear.”

According to Moran, members of the PLBTA have a business model that relies heavily on the sale of beer, wine, and mixed drinks. He says 63 percent of his average member’s business is the sale of those drinks. Furthermore, the average establishment employs about 16 Pennsylvania workers.

“Based on our calculations using state licensing data and member surveys, our small business taverns and licensed restaurants – many family-owned – employ more than 150,000 statewide,” Moran says. “A lot of jobs are on the line, and we need to find ways to preserve these small businesses to save the jobs and the roles they provide within communities.”

Moran says the current COVID-19 orders restricts business to 25 percent indoor occupancy, disallows service at the bar, and limits the sale of adult beverages to only when a patron is eating.

“We had already lost a number of bars and taverns that were forced to close because of earlier state orders this spring.  The losses incurred earlier combined with the latest orders was like a torpedo hitting an already damaged ship, and now the ship is sinking faster,” Moran says. “Pennsylvania taverns rely so heavily on the sale of adult beverages that the most recent order is forcing them to close up shop and send staff to the unemployment lines. The state needs to be a part of the solution in keeping these businesses afloat and then helping them recover in the aftermath of COVID-19.”

The hearing will be held at 10 a.m. Tuesday, July 28, in the House Majority Caucus Room, Room 140, Main Capitol.

Others invited to testify include the Pennsylvania Federation of Fraternal and Social Organizations, Pennsylvania Restaurant and Lodging Association, and the Wolf administration.

The Tavern Association is advocating for a comprehensive state package to assist with both survival and then recovery for licensees who have suffered losses since March 6. The association is recommending the following:

  1. Passage of legislation to provide grants to small business restaurants and taverns to assist with COVID-19-related business losses, and expenses including costs associated with new outdoor seating, educational expenses including trade association memberships, hand sanitizer, staff PPE, indoor separators (plexiglass installation), digital thermometers…etc.
  2. Elimination of all license fees and surcharges for liquor-related service establishments for two years, provided the establishment had previously allowed on-site consumption.
  3. Elimination of all small games of chance license fees for R, H, E, and clubs for two years.
  4. Passage of legislation providing limited civil Immunity from liability for bars, taverns and restaurants that attempt, in good faith, to adhere to the provisions of the COVID-19 emergency declaration, the Governor’s 3-16-2020 COVID-19 Business Closure Order or any other executive order relating to COVID-19, or any guidance issued by the Pennsylvania Liquor Control Board, the Department of Health or the Secretary of Health.
  5. Creation of a Small Business Tavern and Licensed Restaurant Promotion Program coordinated by both the PLCB and the Pennsylvania Licensed Beverage and Tavern Association to equal those financed for the beer, wine and spirits craft industries.
  6. Create a Liquor Licensee Specialty Council consisting of specialty associations within the industry including taverns, clubs, brew pubs, wineries, and distilleries to build future industry/state government dialogue.
  7. Permanent acceptance of mixed drinks-to-go as a business practice under the state Liquor Laws.
  8. To save money from delivery charges, allow licensed establishments the ability to pick up and deliver their own malt beverage orders, like the model followed when ordering spirits through the PLCB.
  9. Encourage outdoor seating by making the free temporary licensed premise extensions permanent at no additional cost to the licensee.
  10. Encourage outdoor seating expansion and support the entertainment industry by allowing up to 75 decibels of noise on a property line for all establishments with a liquor license, not just some.
  11. Modernize the state’s sanitation requirements to require tap cleaning once every 14 days.
  12. Cap third-party delivery charges for home delivery of meals from all restaurants and taverns.
  13. Increase the discount licensees receive when purchasing liquor through state stores.
  14. Eliminate the $50 minimum purchase requirement at state stores in order for a licensed establishment to receive a discount.

#     #     #

 

About the Pennsylvania Licensed Beverage and Tavern Association

The Pennsylvania Licensed Beverage and Tavern Association is a statewide association based in Harrisburg, representing small business taverns and licensed restaurants in the Commonwealth of Pennsylvania. The Association formed in 1941, reorganized in 2019, and today advocates for best practices and rights within the industry as well as best experiences for patrons.

By in Latest News Comments Off on Harrisburg Check-in – Getting to know Rep. Kurt Masser

Harrisburg Check-in – Getting to know Rep. Kurt Masser

The Pennsylvania Licensed Beverage and Tavern Association sat down with Rep. Kurt Masser recently to learn more about him and his interest in politics. He is the only active tavern owner who sits in the Pennsylvania House of Representatives. In addition to owning Wayside Inn in Shamokin, he represents Montour County and parts of Northumberland and Columbia County in the state House. In recent months, Rep. Masser has been hosting a listening tour, travelling to different counties to meet with tavern owners about their concerns.

PLBTA: Tell us about the Wayside Inn. How long have you been in the bar business and why?
KM: I have been in the business for 38 years, we have owned the Wayside Inn for 31 years. We originated in the hospitality industry because of a need to market our farm products. I grew up on the family farm. We first started a farm market, then went into the restaurant and catering business and then we purchased the Wayside Inn. All are still open and doing well.

PLBTA: Thinking back to your first elected position, what motivated you to run for public office?
KM: It was as simple as opening my real estate tax bill at the business. I was mad as hell because of a large tax increase. I knew I had a couple of options, harp and complain or get involved, I chose the latter and ran for and won a seat as County Commissioner, then 7 years later for State Representative.

PLBTA: There are a number of pressing issues facing tavern owners today. Of all the issues, which ones are you most concerned with addressing?
KM: I have spent considerable time on gaming for taverns. But I also have been hearing from a number of people in the industry about fairness between different types of licensees, and am now working on those issues also.

PLBTA: Passage of Act 39 forced many changes in the retail liquor industry, with unintended consequences for many licensees.  Similar changes took place with each new law regulating gaming, from small games of chance to skill games and VGTs.  Taverns are facing more challenges and more competition than ever before from many angles.  Do you anticipate the Pennsylvania House of Representatives looking at the impacts of Act 39, and making changes to help level the playing field for all licensees?
KM: I think we have to look at the impacts of Act 39, and it is my job to help the rest of the General Assembly understand the challenges we face. The industry has radically changed since I’ve been in it, we need to be able to change and also to adapt, but more importantly we need the legislature to partner with us to protect our industry and the jobs associated with it.

PLBTA:  What can tavern owners do to help convince legislators to support them and get the changes they need from the PLCB and state government?
KM: Most importantly get to know your legislators. Make sure they hear from you! It means much, much more to me when I hear from a constituent in my District. Invite them to meet with you and talk about the issues. If possible, do a meeting with numerous tavern owners from his/her district and the legislator. They need to hear from you. It can be very frustrating when we are advancing a bill that either hurts or helps us and I hear from my colleagues that they hadn’t heard from any tavern owners.

PLBTA: As you know, our Members are mostly Mom-and-Pop operations. When they look around their hometowns, they can see that the local hardware store has closed, the independent doctor was bought out by a hospital chain, and the neighborhood grocery store is no more. They worry that their industry is next. Do you ever worry about small businesses going away?
KM: I do have concerns, but I don’t worry that our industry will go away. As I have said before, like any other business, times change, industries change, and you need to be ready and willing to change with those times.

PLBTA:  Rep. Masser, do you have any advice for bar and tavern owners about how to help change the state’s liquor or gaming laws?
KM: Get involved and let your voice be heard. You need to know your State Rep. and your State Senator, and they need to know you. I know running your business takes all of your time, and sometimes you may think “what is the point, it won’t matter”. I was just like most of you before being elected, but I now know how wrong I was.

PLBTA: Do you have any advice to other tavern owners who may be interested in running for office someday?
KM: If you are able to, you should run for office. Whether local, state or Federal, we need more people in office who have signed the front of the check. We need more people who have struggled to make payroll and pay bills, that know how changes to any laws can and will affect small business.

 

This Q&A was republished from the February 2020 edition of Pennsylvania Observer — the official monthly magazine of the Pennsylvania Licensed Beverage and Tavern Association.

 

 

By in Latest News Comments Off on House Liquor Control Committee Moves Flexible Pricing Repeal Bill; Three Other Bills

House Liquor Control Committee Moves Flexible Pricing Repeal Bill; Three Other Bills

The Pennsylvania House Liquor Control Committee moved HB 1512 with a 15-10 vote down party lines at a voting meeting held on September 19.

Sponsored by Rep. Jesse Topper, HB 1512 would repeal flexible pricing granted to the Pennsylvania Liquor Control Board as part of Act 39. In a sponsorship memo, Rep. Topper wrote, “The PLCB championed flexible pricing as a way for the Board to more effectively negotiate with liquor suppliers, and to provide more revenue to the Commonwealth, while also using the new leverage flexible pricing provides the Board to lower the price of some products in State Stores. After seeing the impact of flexible pricing, I have not been convinced that this change has led to lower prices for the consumer, nor has the Board convincingly shown that this provision has provided our Commonwealth with increased revenues.”

The vote by the House Liquor Control Committee comes after the bill was the subject of two hearings earlier this year.

The committee also moved three other bills during its meeting.

HB 1048, sponsored by Rep. Jerry Knowles would eliminate the $700 liquor license surcharge to fire companies and veteran organizations. Rep. Frank Burns attempted to amend the bill to eliminate the surcharge for all liquor licenses, but the amendment failed to receive a second and thus failed. However, Democratic Chair Dan Deasy said shortly afterwards that the proposed amendment is something that should be discussed for all licenses, but this bill dedicated to fire companies and veteran groups was not the place to do so.

Knowles original bill passed 25-0 to move out of committee.

HB 1542, sponsored by Rep. Stan Saylor, also passed 25-0. In a sponsorship memo earlier, Saylor wrote, “My legislation would allow any entity eligible for a special occasion permit to obtain that permit for nine consecutive or non-consecutive days throughout the year in addition to ten consecutive days. The purpose of my legislation is to allow the York County Agricultural Society, which owns the York fairgrounds and operates the York Fair, to obtain a special occasion permit for events held at the fairgrounds in addition to holding the permit for the duration of the Fair.”

The York County Agricultural Society is also a Member of the Pennsylvania Licensed Beverage and Tavern Association.

Finally, the committee passed HB 1589, sponsored by Rep. Steve Samuelson. The vote was 25-0. This bill adjusts the operating hours for performing arts facilities to begin selling alcohol on Sunday from 1:00 pm to 10:00 am to better accommodate the various show times which often begin prior to 1:00. There are currently 95 active and pending Performing Arts Facility licensees statewide.

Preferred Vendor: Gettysburg Benefits Administration Inc