Distributors: What Makes Them Unique From Other Retail Liquor Licenses

Pennsylvania alcohol consumers purchase most of their alcoholic products from restaurant licensees, state stores or from distributors in the case of beer or malt brewed beverages.  The Commonwealth serves as the wholesaler of wine and spirits and distributes those products to its state stores which in turn sell to retail licensees such as restaurants, hotels and clubs. Beer and malt brewed beverages are supplied to retail licensees by licensed distributors (“D”) or importing distributors (“ID”).  Indeed, a Pennsylvania D or ID licensee can sell to retail outlets and serve as a retailer to the general public as well. 

In Pennsylvania, D licenses and ID licenses are a unique type of retail license which can make owning them challenging.  For instance D or ID licensees or any officer, member or shareholder of an entity holding a D or ID license may not own or have an interest in any other retail license or real estate upon which any retail licenses business (other than its own establishment) exist, meaning D and ID licensees may only own one outlet.  D and ID licensees may not hire a management company to operate, manage or supervise their licensed premises or operation.   No D or ID licensee shall receive directly or indirectly any credit, loans, monies or the equivalent thereof, from any other licensee or from the officer, director or firm member of any other licensee for the purpose of equipping, fitting out, paying a license fee, or maintaining or conducting an established business under a distributor or importing distributor license.

In addition to selling beer and malt brewed beverages, distributors may sell a litany of sundries to the general public and other licensees of the LCB.  For example, distributors can sell cups and mugs, disposable plates, utensils, napkins and tablecloths, foam and plastic beer coolers, foam and plastic can holders, home bar supplies, and office size soft drink/water dispensers, promotional items bearing manufacturers’ logos, promotional wearing apparel such as shirts, caps, hats and jackets, sporting equipment such as balls, gloves, bats, inner tubes, rafts and sports bags.  Distributors may sell snack foods consisting of candy, gum, nuts, popcorn, chips, dips, pretzels, crackers and dried meat products (jerky).  Distributors are permitted to sell tobacco products, (for individual consumption, not resale) consisting of cigarettes by the pack or carton, cigars, cigar carrying cases, cigar lighters, humidors, pipe tobacco, pipes, pipe tobacco pouches, chewing tobacco and disposable lighters.   Also permitted is the sale of Pennsylvania lottery tickets; ice; non-alcoholic beverages including non-alcoholic malt beverages, (non-alcoholic malt beverages may not be sold to any person under 21 years of age) soft drinks, juices, water, carbonic and non-carbonic mixes, iced tea (prepared or mix form), coffee  and tea; and daily newspapers.

Any item a distributor wishes to sell that does not appear on LCB approved lists may be submitted to the LCB Chief Counsel’s office by a distributor for LCB review and approval.

Distributors are precluded from selling or delivering malt or brewed beverages to any licensee whose licensed premises is located within the designated geographical area granted to an importing distributor other than the importing distributor that sold the beer to the distributor.  If the licensee purchasing the beer from the distributor holds multiple licenses or operates at more than one location, then the beer may not be consumed or sold at a  licensed premises located within the designated geographical area granted to an importing distributor other than the importing distributor that sold the beer to the distributor. A licensee accepting delivery and/or transferring malt or brewed beverages in violation of this provision shall be subject to a suspension of at least 30 days.

— J. Ken Butera

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