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By in Latest News Comments Off on Survey Results: Small Business Taverns, Licensed Restaurants Severely Damaged Due To Pennsylvania’s COVID-19 Order

Survey Results: Small Business Taverns, Licensed Restaurants Severely Damaged Due To Pennsylvania’s COVID-19 Order

A survey of small business taverns and licensed restaurants indicates Pennsylvania could see a significant loss of locally owned establishments from closings as a result of the Commonwealth’s COVID-19 Orders.

The survey, conducted by the Pennsylvania Licensed Beverage and Tavern Association between August 25 and August 28, 2020, included 10 questions exploring financial difficulties.

Most troubling are indications that only 30 percent of the participating neighborhood-based establishments might survive the crisis. This is consistent with national surveys suggesting a possible loss of 70 percent of establishments.

In the PLBTA survey, participants were asked “Without any change to the Governor’s Order or financial assistance from the state and/or federal government, which best describes the future of your business after September 2020?”

Thirteen percent are already closed. Another five percent indicated they will close within a month, while 29 percent say they will likely close by the end of the year and 23 percent say they will likely close in 2021. Only 30 percent said they would not close.

Major layoffs and furloughs were also identified in the survey, again along the same lines as national studies. On average of those establishments participating in the survey, 13 employees per location lost their jobs as a result of COVID-19 Orders. When extrapolated across the industry, considering small business R and H license locations alone, about 109,200 Pennsylvania jobs were lost.

Financially, July 2020 proved to be troubling. The average establishment completing this survey lost $227,179 in July 2020 compared to July 2019.

Only 29 percent of the survey participants said they have not faced any cash flow problems. That suggests 71 percent have had difficulty paying bills including rent, utilities, and loan repayments.

“These results shouldn’t surprise anyone,” said Chuck Moran, executive director of the PLBTA. “When you’re limited to 25 percent indoor capacity and have seen increased expenses along with other difficulties due to state orders, you can expect a serious crisis to develop. This industry can’t sustain itself under these conditions. Changes in state restrictions along with survival and recovery financial packages are needed.”

The survey also explored other business-related difficulties including food and beer deliveries as well as supply deliveries for items such as paper products and cleaning items.

Of those participating in the survey, 89 percent were small business, single-location establishments, while eight percent were small businesses with more than one location. All own either an “R” or “H” liquor license. Three percent were clubs with club liquor licenses. No national or regional chains participated in the survey.

A total of 1,234 invitations to take the survey were sent statewide. There were 100 businesses that completed the survey during the three days. As a result, this survey has a 10% margin of error with a 95% confidence level when considering small business R and H licensees in Pennsylvania.

Working members of the media may request a copy of the results by emailing pataverns@pataverns.com. Please include your name and media affiliation.

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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 PLBTA Testimony: Pa. Senate Democratic Policy Committee Investigates COVID Impact on Taverns, September 4, 2020

PLBTA Testimony: Pa. Senate Democratic Policy Committee Investigates COVID Impact on Taverns, September 4, 2020

Below is testimony provided by John Nikoloff on behalf of the Pennsylvania Licensed Beverage and Tavern Association to the Pennsylvania Senate Democratic Policy Committee on Friday, September 4. The committee was investigating the impact of state COVID-19 orders on restaurants and taverns. Nikoloff is the PLBTA’s state lobbyist. In addition, he is the founder and partner in PA ERG, a lobbying firm based in Harrisburg.

 

Chairman Boscola, members of the Committee, good afternoon. I’m John Nikoloff of ERG Partners representing the Pennsylvania Licensed Beverage and Tavern Association.

Let me begin by thanking you for inviting the Pennsylvania Licensed Beverage and Tavern Association to testify today about the struggles of the 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.

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.

In terms of business, our average Member makes a living primarily from alcohol sales. 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.

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 the Member establishments, you’ll find less than 100.

Simply put, our Members are your locally-owned, mom-and-pop neighborhood businesses.

For the sake of overall industry data, looking at the state list of active R, H and E 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, H and E 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.

This week, we wrapped up a survey of small business licensed restaurants and taverns. Our study clearly shows the struggle these establishments are having, and supports findings we’ve seen from national-level studies.

For example, on average, 13 employees per establishment lost their jobs as a result of COVID-19 Orders. When extrapolated across the industry in Pennsylvania, this likely resulted in the loss of hundreds of thousands of jobs throughout the entire industry. When just considering our small business R and H license locations, the state orders likely resulted in about 109,200 jobs lost.

When you consider our average Member employs 16 individuals, and an average 13 employees lost jobs per establishment – or 81 percent, our survey also supports national studies from earlier in the crisis that estimated 81 percent of industry employees were laid off or furloughed during the crisis.

Our survey also found that without any change in the state’s COVID-19 order, 70 percent of small business licensed restaurants are either closed or facing closing in the upcoming year. In the next month, 5 percent say they will close. Another 29 percent say they will likely close by the end of the year, while 23 percent say they will likely close in 2021.

Small business taverns and licensed restaurants along with their employees need your help. And they need it sooner rather than later.

My Members really want to work at full capacity. They’re not looking for another loan. They want to put people to work and let the public decide whether or not to dine indoors while following all appropriate health and safety measures.

But, since operating at 100 percent is not going to be allowed anytime soon, they have no choice but to seek survival and then recovery help to make up for not being allowed to use their licenses at 100 percent.

With colder months ahead, outdoor seating becomes problematic. The state should allow increased indoor dining using safety protocols.

Other than increased indoor dining, we asked in our survey what could help them the most. They responded as following:

  1. State Grants for $25,000 for expenses incurred to date (6.48 on a 7.0 scale)
  2. Forgiveness of license fees and surcharges for 2020-2021 (4.75)
  3. Conversion of sales taxes collected into grants for your bar/tavern/restaurant (4.45)
  4. Increase the state wholesale discount from 10-15% (4.35)
  5. Ability to retain revenues from skill games, VGTs (3.76)
  6. Elimination of the $50 minimum for wholesale discounts (2.24)
  7. Ability to purchase spirits and wine on 30 days credit (1.97)

Very clearly, our industry is looking to the legislature to pass survival bills to include grants and license fee forgiveness. An increase in their discount at state stores would be helpful.

We recognize that this is not a partisan issue, and appreciate your support and the legislation proposed by Sens. Brewster and Iovino, Sen. Boscola and others in the last month.

Since March, these small business establishments along with their employees have been on a downward spiral. They need your help, and they need it now.

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.

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, hiring staff back, generating economic activity, and helping the public begin to feel that we were moving again toward “normal.”

But, it turned out to be false hope. Governor Wolf’s order on July 15 was a setback 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.

And I have to say that our Members’ frustrations have only grown because they have still not – six weeks later – seen any data that even suggests taverns and restaurants operating within the guidelines set by the Governor and Secretary Levine have been responsible for community spread of COVID-19. Instead, the general feeling is that an entire industry is being damaged beyond repair because of the perceived actions of a few bad actors which were not subjected to proper enforcement measures.

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. We have separately provided a list of various state actions that might provide a lifeline to many of our drowning Members.

Thank you for the opportunity to present this testimony, and I welcome questions.

 

Pennsylvania Small Business Taverns and Licensed Restaurants Relief
and Recovery Recommendations

  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 discount that licensed establishments 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.

 

By in Latest News Comments Off on KonekTV, PLBTA Join Forces To Help Taverns, Licensed Restaurants Survive COVID-19

KonekTV, PLBTA Join Forces To Help Taverns, Licensed Restaurants Survive COVID-19

Agreement Provides Free PLBTA Membership and KonekTV

(Harrisburg, PA – August 10, 2020) A national company is coming to the assistance of Pennsylvania’s taverns and licensed restaurants to provide financial assistance as the industry struggles through the COVID-19 crisis that has forced hardships on many establishments.

KonekTV, based in Las Vegas, has joined forces with the Pennsylvania Licensed Beverage and Tavern Association to guarantee establishments have the financial resources to join the state tavern association. In addition, KonekTV will provide their product to those establishments for free.

“We know that Pennsylvania’s taverns and licensed restaurants are struggling financially,” said Javier Vargas, Chief Operating Officer of KonekTV. “We’re going to help them through this crisis by paying their membership dues in the PLBTA for one year and also make our product available to them at no charge. In addition to bolstering the PLBTA’s ability to support the establishments, our product will directly help the establishments benefit from the emerging mobile sports betting industry.”

KonekTV is a digital signage solution and the world’s leading brick-and-mortar platform for sports betting education, information, and promotions in states that have legalized mobile sports betting. Through their innovative product, establishments display sports betting odds and other related sports and establishment news through existing televisions. This allows patrons to use the information when placing bets through their mobile devices.

“Having owned and operated bars and casinos for decades, I know that on-premise technology often lags the at-home experience. KonekTV bridges that divide and brings even better sports betting content and promotions to bar guests than they can get at home. We’ve seen this work in our hometown of Las Vegas and with our national partners, and we are thrilled to bring KonekTV to Pennsylvania hand-in-hand with the Pennsylvania Licensed Beverage and Tavern Association,” said Seth Schorr, CEO of KonekTV.

“Mobile sports betting is becoming increasingly more popular in Pennsylvania,” said Chuck Moran, executive director of the PLBTA. “Many patrons of taverns regularly tap the power of smart phone apps to place bets, so KonekTV’s product is a great way for an establishment to entertain customers, and keep them longer. It is a natural fit for our industry, especially sports bars.”

From now through November 1, 2020, whenever a Pennsylvania tavern or licensed restaurants activates the KonekTV product, the company will pay for a one-year membership in the PLBTA. Existing Members will have their memberships extended 12 months.

Moran adds that in addition to providing financial assistance to Pennsylvania’s taverns, it will also enable many establishments to access important Member-only emails and communications to help guide them through the COVID-19 crisis.

“Since March, we’ve been working hard to keep our Members in the loop as state orders change,” said Moran. “This agreement between KonekTV and the PLBTA opens the door for non-members to be a part of organized taverns, thus giving them access to relevant benefits to run their businesses. We thank KonekTV for their interest in helping Pennsylvania’s taverns and licensed restaurants.”

Pennsylvania taverns and licensed restaurants interested in a free PLBTA membership for one year and free access to KonekTV should send an email to PLBTA@KonekTV.com.

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About KonekTV
KonekTV is a digital signage solution and the world’s leading brick-and-mortar platform for sports betting education, information, and promotions, in states that have legalized mobile sports betting, such as Pennsylvania! KonekTV powers ad platforms and sports betting content at restaurant chains, stadiums, arenas and casinos across the country.

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.

 

Media Contact: PLBTA Public Affairs, (717) 232-8671

By in Latest News Comments Off on Statement: Rep. Masser’s Lifeline Amendment Vital For Tavern, Restaurant Survival

Statement: Rep. Masser’s Lifeline Amendment Vital For Tavern, Restaurant Survival

The following is a statement from Chuck Moran, executive director of the Pennsylvania Licensed Beverage and Tavern Association. The PLBTA represents small business taverns and licensed restaurants across the state.

 

For Pennsylvania’s small business taverns and licensed restaurants, it’s about survival.

Along with school districts, our industry has been the tip of the spear in this fight to flatten the coronavirus curve, buying time for our health care professionals to prepare. They’ve sacrificed a lot.

Unlike other types of liquor licenses that can operate their base businesses, our Members have not been allowed to do the same. While others are seeing expanded sales and profits, Pennsylvania restaurants and taverns have suffered lost markets and income.

But, today, Rep. Kurt Masser (R-107), who represents parts of Columbia, Montour and Northumberland counties, and 192 other members of the Pennsylvania House of Representatives passed an amendment to HB 327 that will make it a little easier for local taverns to survive. That amendment allows the sale of mixed spirit drinks to go, something that is currently not allowed by state law.

The final vote on A05282 was 193-9, showing overwhelming support from both Republicans and Democrats.

A study by the National Restaurant Association estimates that the Pennsylvania restaurant and food service industry will lose more than $1.8 billion in sales in April. The same study indicates 96 percent of Pennsylvania restaurant operators have laid off or furloughed employees since the beginning of the coronavirus outbreak in March.  (Our members have an average of 17 employees each.)

The study also suggests future restaurant closures should be anticipated.

The Governor’s reopening plan suggests it could be many more months until all Pennsylvania counties reach a “Green phase,” which is why finding additional revenue streams for small business taverns and licensed restaurants is so important for their survival.

HB 327 now moves onto third consideration.

On behalf of all Pennsylvania Licensed Beverage and Tavern Association Members, we thank Rep. Masser for spearheading this amendment. We also thank both Republican and Democrat members of the House who voted today to help small business taverns and licensed restaurants.

By in Latest News, Uncategorized Comments Off on Harrisburg Check-in with Sen. Pat Stefano

Harrisburg Check-in with Sen. Pat Stefano

Sen. Pat Stefano

The Pennsylvania Licensed Beverage and Tavern Association sat down with Sen. Pat. Stefano recently to learn more about his perspective on the liquor industry, including Act 39 and the current political landscape. Sen. Stefano is chair of the Senate Law & Justice Committee. He serves the 32nd District including Fayette, Somerset, and Westmoreland counties.

PLBTA: Thinking back to your first elected position, what motivated you to run for public office?
PS: As the owner of a small business, I’m the 3rd generation of my family’s printing company, I have been involved in my community and involved in groups like our local Chamber of Commerce and NFIB for many years. In those groups we followed our legislators’ votes on issues that were important to small businesses. I would send my letters on important issues and get form letters back. It became clear to me that my representation wasn’t actually listening to me. I was brought up that as a small business we should always give back to our communities and when this opportunity came I saw it as a perfect opportunity to give back to the community which has been so good to me and my family.

PLBTA: What made you particularly interested in chairing the Senate Law & Justice Committee?
PS: Alcohol policy is a place where I think the interests of small businesses really comes up against the government. Alcohol is a regulated industry and an industry that we rely on to provide us nearly 1 billion dollars in tax revenue. I wanted to ensure that our regulations and the management of our Liquor Control Board is being done in a way that is conducive to small businesses being able to flourish. As a senator from a rural district I am also very concerned about access and providing the service that our constituents expect. I also am extremely concerned about police matters and how it relates to our commonwealth, particularly in rural areas.

PLBTA: 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?
PS: I do and I don’t. Of course, I see the trend towards national chains and am concerned that they spell the end of small businesses. However, I am a firm believer in the entrepreneurial spirit. I think that our small businesses are adapting to this trend and can provide the personal service and quality product that can overcome the trend towards national chains.

PLBTA: Do you have an agenda for the Law & Justice Committee this legislative session? Are there issues that you see as needing change in the system to make it more workable or efficient?
PS: I think that we need to ensure that the sectors of the alcohol industry have parity. We have seen tremendous success with the expansion of wine and beer and I think the next logical step is to look towards creating convenience for our spirits products as well. In the same sense I want to ensure that our PA based small businesses, who employs thousands in our commonwealth, are given the tools and flexibility they need to thrive.

PLBTA: Passage of Act 39 forced many changes in the retail liquor industry, with unintended consequences for many licensees.  Taverns are facing more competition than ever before.  Do you anticipate the Law & Justice Committee looking at the impacts of Act 39, and making any changes to help level the playing field for all licensees?
PS: One of the things I have learned about this area of the law is that when you change one thing it effects everyone in the industry. I am interested in hearing more about these concerns and working with licensees to either understand the intent of the law if it is something that does not have the necessary support to be changed and looking at ways to improve the overall business climate for all licensees.

PLBTA: One result of Act 39 has been delays in timely beer deliveries due to the expansion and universal availability of beer at large retailers and convenience stores, which were not in the beer business prior to the Act.  At times, bar owners find themselves out of supplies, but current law doesn’t allow tavern owners to pick up beer when they are short through no fault of their own.  Would you support legislation that would allow tavern owners to pick up limited amounts of brewed and malt beverages when they run out?
PS: I have been hearing a lot about the changes in the franchise law and understand that different areas are experiencing this law in different ways. I am interested in looking into this concept while ensuring that the products that are available to our consumers are the freshest and safest products available.

PLBTA: Bar owners often pay servers and bartenders through the wage-tip structure that guarantees minimum wage through a combination of a tavern hourly wage and tips. They often can make more … $15, $20, $25 per hour. This structure helps the small business and the employee. Governor Wolf wants to change minimum wage rules, possibly going as high as $15/hour and setting tipped minimum wages at 75% of the overall minimum.  Some worry that patrons will feel tipping is not necessary due to a higher wage. If this were to happen, it may actually cause servers and bartenders to make less. How do you feel about the wage-tip structure?
PS: I think the discussion around minimum wage is made to seem so simple. People need to make more therefore we should raise the wage and it will just happen. Unfortunately, if a large jump in the wage would occur it could have long ranging unintended consequences ranging from layoffs, to increase consumer prices to the scenario that you lay out in your question. That is why I wish the federal government would be leading the way on this so that all states were operating on the same level. I think this discussion needs to be handled with great caution and any changes need to be incremental and over time to allow everyone to adjust properly.

PLBTA: Everyone has their favorite restaurant, bar, or tavern. These establishments can be great places to gather with friends and family. Without specifically naming your favorite, what makes it so special that you keep going back? What stands out about it?
PS: I think these local establishments build a sense of togetherness and help make our communities stronger. These employees and business owners don’t just work in our community, they are a part of it. Anytime I’m at a youth sporting event chances are there are a few teams sponsored by a restaurant, bar or tavern. When I go to our community theater or a fundraiser for a nonprofit, you have ads in the program or are donating food or beverages. You usually are the first to be asked to support something and the first to step up and do so. I really prefer to support those kinds of establishments. Not to mention, the wings at my favorite establishment can’t be beat.

 

The above Q&A was republished from the July edition of Pennsylvania Observer, the official magazine of the Pennsylvania Licensed Beverage and Tavern Association.

 

By in Latest News Comments Off on PLCB Accepting Sealed Bids for Sixth Auction of Expired Restaurant Licenses

PLCB Accepting Sealed Bids for Sixth Auction of Expired Restaurant Licenses

Beer taps at a Pennsylvania pub.

The Pennsylvania Liquor Control Board (PLCB) recently announced an invitation for bids to award 25 expired restaurant licenses in the sixth license auction since Act 39 became effective in August 2016.

According to the PLCB, the auction includes one license in each of the following 25 counties: Armstrong, Bradford, Bucks, Cameron, Carbon, Clinton, Crawford, Dauphin, Elk, Greene, Huntingdon, Lebanon, McKean, Mercer, Montgomery, Northampton, Northumberland, Philadelphia, Pike, Potter, Schuylkill, Susquehanna, Washington, Wayne, and Westmoreland.

A sealed bid process will once again be used for the auction. The previous five auctions awarded 191 licenses.

Bids are due by noon Thursday, Aug. 2. Bids will be opened Monday, Aug. 6, and auction winners will be determined soon thereafter.

You can read more details on this auction by clicking here.