Should We Be Happy With the Wegmans Beer Decision?

The PA Supreme Court decision confirming Wegmans’ right to sell six-packs of beer is undeniably good news for consumers, along with small brewers and of course Wegmans.

But I think we should question just how much progress has actually been made here. Have a look at why Wegmans was able to proceed. Angela Couloumbis and Amy Worden explain:

In a unanimous decision, the seven justices found that the Pennsylvania Liquor Control Board properly granted licenses to Wegmans Food Market Inc. to sell beer at eating areas in its supermarkets.

The stores have eat-in cafes that meet the liquor-code requirements to get restaurant licenses and sell beer to be consumed on the premises as well as to sell six-packs to go, the court ruled.

The justices noted that their decision “may foreshadow the expansion of the practice of large businesses opening restaurants within their facilities.”

And:

The [Malt Beverage Distributors' Association] says letting Wegmans sell beer would allow other supermarkets and big retailers to horn in on the beer-selling trade by establishing their own eating areas and applying for licenses to serve beer and sell six-packs.

That, the association warned, could put beer distributorships – many of them small mom-and-pop operations – out of business.

The right question to ask in response to this last argument is “So?” Why should the State have any interest in protecting beer distributors from competition?

But back on topic, the practice that’s been confirmed by the Court is that supermarkets need to add on a dining area if they want to sell beer. That is absurdly inefficient. Why should Giant, or Elias Farmer’s Market, or Ahart’s on South Side Bethlehem have to waste scarce floor space on tables just to be able to sell beer?

The most likely outcome seems to be that smaller grocers just won’t, because they can’t afford to waste the space, and beer sales will be de facto restricted to upmarket chains like Wegmans.

My worry is that by splintering grocer interests into large upmarket chains and small downmarket stores, the court decision will create a path dependence that makes the politics tougher for further reform efforts.

To get six packs (and wine and liquor) in grocery stores, we’re going to need a unified Grocer Lobby to counter the lobbying heft of the MBDA. But the big supermarket chains really aren’t going to want competition for beer sales from smaller grocers, so the incentive is for them to protect the dining area requirement in order to keep the little guy out of the game.

It’s always worth pointing out that the system is the way it is because of liquor licensing. Licensing limits competition for retailers, bars and restaurants and leads to fewer choices and higher prices for consumers. The best way to get a normal system like in other states is to end liquor licensing.

Comments

  1. CT says:

    I think you're right to worry about path dependence. On the other hand, Pennsylvanian consumers may grow more accustomed to being able to buy beer in grocery stores and begin to demand it.

    Just thought I'd mention that you can also get beers in the Weis on William Penn Highway.

  2. Jon Geeting says:

    Oh really, how does that work? Seating area, I guess?

  3. CT says:

    Same deal as Wegman's. I asked the beer checkout person (separate from regular checkout) about it. They serve sandwiches and have a few tables. Selection isn't as good as Wegman's, but pricing was better. It was a pleasant surprise to discover on the way to a byob restaurant.

  4. Jon Geeting says:

    Nice. BYOB is so weird. Its existence puts the lie to the public health arguments for liquor licensing. Why do we license? I would imagine the argument would go something like: 1) we want to reduce drinking and driving 2) we want to prevent the nuisances associated with bar clusters and people drinking outside of their homes.

    I don't see how allowing BYOB serves either one of those objectives. Drinking and driving is still a problem with BYOB, and you might even drink more than you would if you had to pay bar/restaurant prices for the alcohol.

Trackbacks

  1. [...] – Grocery stores, gas stations, and convenience stores will be able to get licenses to sell beer and wine. No more competition between supermarkets and bars/restaurants for tavern licenses, as has been the case since the Wegmans court decision [...]

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