If you read our earlier report, you saw that the Pennsylvania Liquor Control Board (PLCB) has supported Governor Wolf’s mandate to waive license fees for those in the hospitality and service industry. However, if you read the press release closely you will see a statement made by the PLCB that states most craft breweries will still be required to pay those fees.
The release confirms; “Manufacturers, beer distributors and transporters for hire – businesses less impacted by COVID-19 restrictions, will be required to pay license fees in 2021.”
In response to our question on how this impacts local craft breweries, the PLCB confirmed; “Yes – breweries are manufacturers and will be required to pay license fees” Elizabeth Brassell, PLCB Director of Policy & Communications.
Let’s break the manufacturer statement down a bit more. As you may (or may not) know, any craft brewery who is brewing beer at their facility is licensed as a “manufacturer” of beer. As a result, these operations (which make up a majority of breweries throughout the state) will still be required to pay their license fees in 2021.
Why does this not apply to manufacturers (i.e. most craft breweries)? In our opinion; when the state defines manufacturers they think of breweries like Sam Adams. Facilities that rely heavily on retail sales being made outside of the brewery walls, such as kegs at bars or bottles/ cans sold through bottle shops, grocery stores, etc. Breweries that do not offer much taproom space. In fact, in a speech by Jim Koch (owner of Sam Adams), in which we attended, he confirmed that Sam Adams taproom sales are extremely minimal.
As a result, the PLCB sees the example above as a business that has been “less impacted by COVID-19 restrictions”. Meaning manufacturers are not impacted by Covid restrictions because consumers are rarely visiting them for retail sales.
The reality of the situation is that a majority of the Pennsylvania craft beer industry does not operate in this manner. If you have ever visited a brewery throughout the state you know they have a taproom on-site along with their brewing (“manufacturing”) operations. These taproom sales are what power a majority of the revenue to keep the brewery profitable.
So while you see the press releases and news articles of the fees being waived by the PLCB, please keep in mind these initiatives will most likely not have a positive impact on your local craft brewery.
