Pennsylvania Controls the Sale of Alcohol in the State
Pennsylvania is one of 17 “controlled states” in the United States, whereas the state sells wine and spirits and regulates the sale of alcoholic beverages and alcohol based products throughout the state. The Pennsylvania Liquor Control Board (PLCB) is the state agency that controls the sale, distribution, and licensing of alcoholic beverages in Pennsylvania. There are over 200 types of liquor licenses and permits in the state. This blog will address those licenses and permits that are associated with “retail” uses.
Liquor License applications are filed through the PLCB Bureau of Licensing. Per the PLCB website, “Licenses are obtained four ways: through the issuing of a new license, the approval of a person-to-person transfer, the approval of a place-to-place transfer or the approval of a double transfer (person to person and place to place)”. Through PA Act 39 of 2016, the PLCB is authorized to auction expired licenses to the highest qualified bidders. PLCB auctions tend to occur twice each year.
Pennsylvania Liquor Licenses & County-Quota Law
Restaurants, bars, taverns, eating place licensees (places selling beer only), and “clubs” are generally subject to the County-Quota Liquor Licenses granted to public venues. Under the County-Quota law, there may be only one (1) license for every 3,000 inhabitants in any county. County-Quotas are updated with each federal decennial census.
Performing arts facilities, continuing care retirement communities, airport restaurants, municipal golf courses, hotels, privately-owned public golf courses, racetracks, non-primary pari-mutuel wagering locations and national veterans’ organizations are not subject to the County-Quota law.
Economic Development License
The state has recognized the need to open the County-Quota Law to make it easier for economic development projects that provide job growth. Under PLCB Advisory Notice # 20 (Revised), dated May 17, 2017, “An economic development license is a restaurant (“EDR”) or eating place retail dispenser license (“EDE”) which may be issued, even if the number of existing restaurant and eating place retail dispenser licenses in that county exceeds the ratio of 1 license per 3,000 inhabitants. The purpose of the economic development license is to promote economic development.” Note that there are many qualifying criteria to obtain an Economic Development License.
On-Premises Sale of Alcohol
In Pennsylvania, to obtain a liquor licenses to sell alcoholic beverages for consumption “on-site”, licensees must also serve “sufficient and acceptable food provisions” to a minimum of thirty (30) customers. Following are “on-premises” liquor licenses:
- Restaurant (R) Liquor License
The most common liquor license in Pennsylvania is the “Restaurant – “R” License”. A Restaurant “R” license permits the sale of beer, wine, and liquor so long as the licensee is making and serving food on-premises. In addition to a restaurant, bars and taverns usually are licensed to sell alcoholic beverages through a Restaurant “R” license. In addition, the majority of grocery stores, convenience stores, and gas stations use the Restaurant “R” license to sell alcoholic beverages. Additional requirements for a “R” license include a minimum interior space of 400 square feet, and seating, food, and dishware for at least 30 customers. The Restaurant “R” license permits sale of alcohol for on-premises consumptions and allows the licensee to sell “beer-to-go” up to 192 fluid ounces (equivalent to two 16 oz 6-packs). Hours of alcohol sales are limited to the hours of 7:00 am to 2:00 am the following day Monday through Saturday, and alcohol must be collected no later than 2:30 am.
- Eating Place “E” Liquor License
An Eating Place “E” liquor license permits the sale of malt and brewed beverages (beer) in businesses that are making and serving food to the public. This license type is a popular among corner stores and delicatessens. The Eating Place “E” licensee must provide an interior space no less than 300 square feet, and seating, food, and dishware for at least 30 customers and have a kitchen and food prep area on-site. In addition to permitting on-premises sale of beer, the license allows the licensee to sell “beer-to-go” up to 192 fluid ounces (equivalent to two 16 oz 6-packs). Hours of beer sales are limited to the hours of 7:00 am to 2:00 am the following day Monday through Saturday, and alcohol must be collected no later than 2:30 am.
- Hotel “H” Liquor License
The Hotel “H” license permits a licensee that rent rooms and serves food to transient guests to sell alcoholic beverages. The Hotel “H” license requirements are similar to the Restaurant “R” license except that the licensee must maintain a minimum number of rooms available for rent by transient guests. The Hotel “H” license allows for on-premises consumption of alcohol and to sell “beer-to-go” up to 192 fluid ounces (equivalent to two 16 oz 6-packs). Hours of alcohol sales are limited to the hours of 7:00 am to 2:00 am the following day Monday through Saturday, and alcohol must be collected no later than 2:30 am.
Additional Permits Available to Licensees
- Sunday Sale of Alcohol Permit
To sell beer or alcohol on Sundays (after 2:00 am), Restaurant “R”, Eating Place “E” and Hotel “H” licensees can apply for a Sunday Sales Permit that allows the licensee to sell alcohol or beer between the hours of 11:00 am to 2:00 am on Monday.
- Wine Expanded Permit:
To sell “wine-to-go”, Restaurant “R” and Hotel “H” licensees need to obtain a “Wine Expanded Permit”. A licensee can sell up to 3 liters of wine per transaction for off-premises consumption. The Wine Expanded Permit is not available to Eating Place “E” licensees.
- Extended Hours Food (EHF) Permit
Licensees can obtain an Extended Hours Food Permit which allows for a licensee to remain open later than 2:30 am, however, alcohol sales must still end by 2 a.m.
- Amusement Permit (AP)
The Amusement “AP” Permit allows licensee to provide live entertainment and/ or dancing at licensed establishments.
Other Liquor Licenses for Retail Operations:
Some other liquor licenses of note include:
- Brewery “G” Liquor License – A Brewery “G” licensee can produce malt or brewed beverages (no production cap), sell products to licensees and the public and may choose to self-distribute its products or may grant distribution rights to wholesale licensees for a particular area. In addition, a licensee may sell to individuals for off-premises consumption in containers or packages of unlimited quantity and volume, and to licensees in quantities of no less than a case or in original containers of at least 128 oz. (equivalent to two 16 oz 6-packs). A Brewery “G” licensee can obtain a “brewery pub” license for its location for on-premises sales; may conduct on-premises sales without a brewery pub license under certain conditions (food/seating).
- Club “C” Liquor License ? – A Club “C” licensee is a community oriented, non-profit organization operated for the benefit of the entire membership. Sales of alcohol is secondary to other club purposes. The Club is bound by the following: Club follows provisions of its bylaws and/or constitution, properly admits members by application, investigation and ballot, maintains proper records, i.e. copy of the charter, holds regular meetings to review club business, has regular election of officers, collects dues, profits go back to the Club or are used for charitable purposes, and must maintain a non-profit status.
- Catering Club “CC” Liquor License – In addition to the requirements of Club “C” licenses, a Catering Club “CC” licensee requires a valid health license and a log of catered events. The log must include the date and time arranged, name of the individual or entity who organized the event and the number of people expected.
- Limited Distillery “AL” Liquor License – A Limited Distillery “AL” licensee can produce up to 100,000 gallons of sprits per year (note that a “Distillery” license is available from the PLCB without a production cap, but such a license does not have some of the same privileges). A licensee can sell its products to the PLCB, licensees and the public. They can offer “on- or off-premises” sales by the glass or bottle, offer tastings of its products, and sell food at its primary distillery location and at up to two satellite locations. A licensee can direct ship its own products to licensees and the public.
- Limited Winery (LK) License – A limited winery license can be held by any qualifying in-state or out-of-state winery that produces less than 200,000 gallons per year of alcoholic ciders, wines, meads, wine coolers and fermented fruit beverages. Each limited winery may have up to five board-approved locations and up to two storage locations. Limited wineries may sell their products – in any quantity and for both on and off-premises consumption to individuals.
- Other licenses of note include: Airport Restaurant, Casino Liquor License, Commercial Mixed-Use Overly Project License, Continuing Care Retirement Community License, Economic Development Licenses, Farmer’s Market Permits, Hospital Permits, Municipal Golf Course License, Off-Premises Catering License, Performing Arts Facility License, and Tourist Development Project License, among others.
Licensing for Sale of Alcohol for “Off-Premises” Consumption
The Commonwealth of Pennsylvania through the PLCB controls the sale and distribution of alcoholic beverages within the state. Private licensees can sell malt and brewed alcohol (beer) for off-site consumption with a Distributor “D” License.
- Distributor (D) Liquor License
Distributor “D” licensees can sell malt and brewed beverages to the public continuously between the hours of 7am on Monday until midnight on Saturday provided the store has a minimum of 1,000 square feet and a functioning toilet room for employee use.
- Importing Distributor (ID) Liquor License
Importing Distributor “ID” licensees are permitted to sell malt and brewed beverages to Distributor “D” licensees and are not permitted to sell directly to the public. Importing Distributor “ID” licensees must have a warehouse no less than 2,500 square feet and provide a functioning toilet room for employees.
Cost of Restaurant “R” Liquor Licenses in Pennsylvania
Liquor licenses are acquired through direct issuance by the PLCB, private transactions, brokered transaction, or auction of expired licenses administered through the PLCB approximately twice yearly. Pricing is dictated by supply and demand. At the time of this article, a license is offered for sale in Bucks County for $375,000, and a license in Lehigh County is offered for $150,000. At the last PLCB Expired Liquor License Auction held in June 2020, 43 bids were received for 18 licenses. Winning bids ranged from $25,111 for a license in Butler Township, Schuylkill County to $250,112 for a license in Lansdale, Montgomery County. The average winning bid for the auction was $88,508. The number of bids received for each of the 25 licenses receiving bids ranged from one to six. Seven licenses – one each in Armstrong, Cameron, Crawford, Erie, Greene, Washington, and Westmoreland counties – received no bids.
In summary, Liquor Licensing in Pennsylvania is comprehensive and multi-layered. For example, Restaurant “R” licensees can obtain special exception permits for Sunday sales, extended hours and selling wine for off-premises consumption, things that are not permitted as an ordinary license holder. Pennsylvania’s County-Quota laws apply to primary license types, however, performing arts facilities, continuing care retirement communities, airport restaurants, municipal golf courses, hotels, privately-owned public golf courses, racetracks, non-primary pari-mutuel wagering locations and national veterans’ organizations are not subject to the County-Quota law. Most “retail” oriented liquor licenses issued in the Commonwealth of Pennsylvania include (1) Restaurant “R” License, (2) Eating Place “E” License, (3) Hotel “H” License, (4) Brewery “G” License, (5) Catering Club License, and (6) Distributor “D” License. Pricing for Restaurant “R” licenses vary by County based on supply and demand.
For assistance with finding the right location for your restaurant, eating place, brewery, brew pub, beer distributor, hotel, or distillery, contact a Metro team member at (856) 866-1900.