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House of Representatives
Session of 2017 - 2018 Regular Session


Posted: December 21, 2016 03:00 PM
From: Representative John A. Lawrence
To: All House members
Subject: Cosponsor Memo - Giving Tavern License Owners the Ability to Split Their Liquor License
Dear Colleagues –

After prohibition ended, Pennsylvania established a system to with several different liquor licenses to retail beer. In particular, “R” licenses, commonly known as Tavern or Restaurant licenses, enable the holder to serve beer, wine, and hard liquor to patrons on-premises, and also to retail up to two six-packs of beer-to-go.

In recent years, the two functions of this license have been stretched resulting in unintended consequences. Increasingly, retailers hungry for the ability to sell beer-to-go are pushing up R license prices in the secondary market. These retailers often have zero desire to run a bar or sell alcohol “across the counter.” Meanwhile, small mom-and-pop restaurants who want to serve a glass of wine to their patrons enjoying a nice dinner are priced out of purchasing a liquor license on the secondary market. These small restaurants often have little interest in selling beer-to-go. To address these issues, some have proposed issuing more liquor licenses on a state level.

Past proposals to increase the number of liquor licenses have been controversial for many reasons – one of which is that any new licenses issued by the state may result in new revenue for the state, but at the cost of diluting the value of existing licenses for license holders.

To address these issues, in the near future, I will introduce legislation that will give Tavern License holders the option to split their license into two separate licenses – one for beer-to-go sales, and one for serving beer, wine, and hard liquor on-premises. Tavern Licensees would have the option to do nothing, or to sell the half of their license that they are not using. In addition, licensees who are looking to retire or otherwise sell their R license would now be able to sell “both halves” of their license, which would likely be worth more separately than the combined R license.

I would appreciate your support of this proposal.