Pennsylvania is in the midst of a “craft” transformation. This phenomenon includes alcoholic beverages such as beer, wine and spirits. Consumers have increasingly been demanding products that are locally sourced and made in small batches of quality ingredients designed to meet the taste and preferences of specific regions. Microbreweries and brewpubs started to become popular about a decade ago, followed by local wineries and tasting rooms. Most recently Pennsylvanians have witnessed the proliferation of limited distilleries. The General Assembly has made changes to the Liquor Code in recent years to encourage development of these limited manufacturers of alcohol.
The Pennsylvania Liquor Control Board (“LCB”) grants Pennsylvania brewery licenses that are specific to brewing malt and brewed beverages. Brewery licensees are approved to sell products that are produced by the brewery for consumption at licensed hotels and restaurants. A Pennsylvania brewery may be entitled to operate a restaurant or brewery pub on its premises under conditions that may be set by the LCB. Brewery licensees are sanctioned to sell wines and spirits produced by Pennsylvania limited wineries and distilleries for consumption on the brewery licensee’s premises as well as malt brewed beverages produced at Pennsylvania breweries, provided that the sales of wine and alcoholic cider produced by another limited winery, distillery and or brewery do not exceed 50% of on-premises sales.
Similarly, the LCB can grant limited winery licenses for the production of alcoholic ciders, wines and wine-coolers and limited distillery licenses for the production of gins, whiskeys and vodkas. Limited wineries must use agricultural commodities grown in Pennsylvania for their products. A limited winery may not produce more than 200,000 gallons of product a year and a limited distillery may not produce more than 100,000 gallons of product a year. Like breweries, the LCB allows limited wineries and distilleries to sell their product at up to five approved satellite locations in addition to their licensed premises.
Pennsylvania breweries, limited wineries and limited distilleries are permitted to sell the beer, wine and alcohol of other Pennsylvania manufacturers without an additional retail liquor license for consumption on the premises provided that more than 50% of the product sold comes from a host manufacturer.
If you have any questions about licensing for the limited production of alcohol our office can assist with the nuances of the LCB as well as administration of federal and local regulations associated with such ventures.
– J. Ken Butera