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The Associated Press December 1, 2011, 10:11AM ET

Retailers, Pa. auditor general slam liquor bill

A state House of Representatives panel heard a lot of criticism Wednesday about a leading Republican proposal to privatize Pennsylvania's state-owned liquor and wine sales -- including the fact that it does nothing to change state beer laws.

For some, the bill introduced by House Majority Leader Mike Turzai, R-Allegheny, doesn't go far enough in providing opportunities to sell alcoholic beverages at privately owned stores. They say it should provide for unlimited licenses to sell beer, wine and liquor.

For others, including state Auditor General Jack Wagner, the proposal will likely result in higher prices on many popular wine and spirits, lower tax revenue for the state budget and less selection and convenience for customers while benefiting large chain retailers.

"The Pennsylvania Liquor Control Board is one of the few profit-making ventures in state government, and by its very definition, privatization would shift the financial benefit away from taxpayers to out-of-state profiteers," Wagner, a Democrat, said in his submitted testimony to the House Liquor Control Committee.

With big-box retailers such as Costco Wholesale Corp. and Wal-Mart Stores Inc., supermarket owners and convenience store operators all pushing lawmakers for the right to sell beer, wine and liquor, the liquor committee kicked off two days of hearings in Philadelphia on Turzai's bill.

Privatizing the state liquor stores is a top priority of Republican Gov. Tom Corbett, though many Democrats oppose the concept and some Republicans question it. For now, Pennsylvania has some of the strictest alcohol control laws in the nation.

Corbett has called Turzai's proposal "the place to start" in the simmering legislative debate over privatization and suggested that money from the sale of licenses could help pay for improvements to the state's highways, bridges and mass transit systems, which are viewed as chronically underfunded.

Advocates of privatization also say that Pennsylvania could expect more tax revenue if the state gets out of the way.

However, Wagner attacked estimates of a one-time cash windfall from selling liquor store and wholesale delivery licenses as overblown, particularly in a difficult economy when the amount prospective licensees are willing to pay is depressed.

Pennsylvania's homegrown beer breweries oppose the bill because it could make liquor and wine more widely available without liberalizing the state's beer laws to help brewers sell more beer.

David McCorkle, president and CEO of the Pennsylvania Food Merchants Association and Pennsylvania Convenience Store Council, told the panel that Turzai's bill is too restrictive. Rather, licenses to sell beer, wine and spirits should eventually be available to all retailers who can responsibly sell alcohol, he said.

There should be no caps on the number of stores licensed to sell wine and spirits and no exclusive territories, as Turzai's bill envisions, McCorkle said. Also, barriers to getting a license should be eliminated, such as a law prohibiting the sale of alcoholic beverages and gasoline on the same property, he said.

A committee vote is scheduled on the bill Dec. 13. Should the committee approve it that day, the House would have at least four voting session days in December to consider it before leaving Harrisburg until Jan. 17.

Currently, more than 600 state-owned stores sell wine and liquor, while beer buyers are largely limited to buying cases from about 1,200 licensed beer distributors or no more than two six-packs from a bar.

Under Turzai's bill, as many as 1,250 wine and liquor licenses would be auctioned. Of that number, 690 would be set aside for larger store operators -- determined by shelf space and square footage -- outside of Philadelphia, and 500 would be set aside for smaller stores, also outside of Philadelphia. Sixty licenses would be limited to Philadelphia.

Public officials and owners of beer distributorships could bid on wine and liquor licenses, but people with significant criminal histories would be disqualified from being a bidder, a general or limited partner, or the owner of a controlling interest.

The location of the stores would be limited by zones drawn by a state agency, and stores could be no closer than a quarter-mile from one another. Sales would be limited to between 8 a.m. to 11 p.m., Monday through Saturday. Except for beer distributors that get a license, a licensee would have to sell wine and liquor from a self-contained area with limited customer access.

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