With more than 570 wineries nationwide now licensed to ship directly to consumers in Pennsylvania, the state’s new wine laws are off to a good start.
“The reason it’s good is because a number of wines are only available through wine clubs,” said Bob Richards, a Penn State professor and certified sommelier, or wine expert. The new laws will “be used by wine aficionados who couldn’t join wine clubs before … and enable them to join wine clubs around the country, and that is a big step forward.”
The new laws, known as Act 39 of 2016, went into effect on Aug. 8. The major change is that consumers and businesses now can get up to 36 cases of wine per year shipped directly to their homes and stores from each registered out-of-state winery.
According to Elizabeth Brassell, a Pennsylvania Liquor Control Board spokeswoman, 572 wineries have gotten a direct wine shipper license as of Oct. 11, with another 85 waiting to receive them. Just from California, 417 wineries have gotten licenses, with 73 of those businesses located in Napa Valley.
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“I don’t see many wineries not taking advantage of that. Why would you not have the ability to ship to a new market?” said Sean Caviston, the Nittany Lion Inn’s restaurant operations manager and a certified sommelier.
“I’m looking forward to seeing who is going to jump on getting their license and making the wine available to us, because certainly there are some gems that I want on my list, and I believe that our consumers would appreciate that very much.”
Wineries must apply for a license from the PLCB to ship into the state and must pay a yearly $250 fee. Out-of-state retail stores are not included in this part of the law.
The state will not add the 18 percent Johnstown flood tax to direct wine shipments. Consumers only have to pay Pennsylvania’s standard sales tax and a new $2.50-per-gallon excise tax, translating to 43 cents per bottle.
The Johnstown flood tax, originally a 10 percent temporary tax on alcoholic beverages in Pennsylvania, was created in 1936 to raise money for reconstructing Johnstown after the flood, which caused millions of dollars in damage. In six years, the tax raised sufficient funds for repairs but it was not repealed and instead was raised twice. It has been at 18 percent since 1968; the money goes into the state’s operating budget.
Act 39 also allows private stores, such as grocery stores and restaurants, to sell up to four bottles of wine in a single transaction.
“Here at the restaurant … we are probably going to research further and pursue the ability to sell wine retail,” Caviston said. “We think that that would be an enhanced experience for our guests.”
“I think it’s more of a convenience and a moment of hospitality for our guests to remember they had a nice dining experience, they had enjoyed a bottle and maybe they will swing by and say … ‘I’ll pick up a bottle for a special occasion,’ ” he said. “I don’t see us doing vast amounts of volume in to-go wine.”
“That’s probably the biggest impact to us is wanting to pursue a license to sell wine to go,” he said.
Both Caviston and Richards noted that private stores will not be able to offer better prices on wines. The state retains pricing control. Under Act 39, 10 percent will be added to the wholesale price and the 18 percent Johnstown Flood Tax will also be added.
“We still can’t discount it below PLCB store’s prices, so it’s not like you can turn around and undercut the store and sell a lot,” Caviston said.
Wine is not the only type of alcohol to benefit from Act 39. Wineries, breweries and distilleries in Pennsylvania now are able to serve one another’s products, but only for on-site consumption.
“So if you wanted to run over to Happy Valley Winery, you could only get Happy Valley Winery wine,” Caviston said. “Now they have the option to offer brewery products from the state, so that, to me, is a good advantage.”
The PLCB, an independent government agency that regulates the alcohol industry within the state, was set up in 1933 after Prohibition was repealed.
As for total privatization of the alcohol trade in Pennsylvania, Richards thinks it is still probably a long way off. “It’s hard to change a culture that has been stuck for so long,” he said.
Renato Buanafina is a Penn State journalism student.