Since the end of Prohibition, Pennsylvania distributors have not been permitted to sell anything less than a case of 24 12-ounce bottles or a “single container” holding at least 128 ounces (i.e., a keg…or remember party balls?).  Lawyers and regulators have read that language to mean that anything less than a case of bottles had to be purchased somewhere other than a distributor – like a bar, deli, or recently, grocery stores.

However, with little fanfare, on March 6, lawyers for the PLCB released what could be considered a historic Advisory Opinion that announced the PLCB will now interpret a “single container” to include a 12 pack of 12-ounce bottles – as long as the 12 pack is one individual package.  For large brewers, this argument makes lot of sense because the total amount in 12 bottles is 144 oz – still over the 128 oz requirement.

This interpretation was brought to the PLCB’s attention by Pittsburgh lawyer Charles Caputo, who filed the request for the interpretation on behalf of Rivertowne Brewing last year, but the PLCB did not address it until Caputo forced the issue with the Pennsylvania Commonwealth Court in December.  In a press release, the PLCB characterized the decision as a “clarification of existing law.”

While Pennsylvania consumers are rejoicing in the news that they will now be able to buy a $20 “half case” as compared to a $40 “full case,” the Brewers of Pennsylvania  (www.brewersofpa.org), thinks the PLCB decision will harm small Pennsylvania brewers.  In a formal response the BOP explained, “We as the small beer Brewers of Pennsylvania employ an estimated 10,000 employees earning $296 million in wages and generating $1.1 billion in direct economic benefits to communities throughout the state…Today we can provide 6 packs and even 12 packs for sale at distributors but nearly all of our members do not have manufacturing and packaging capability to offer 18 packs.  Foreign-owned, mega-brewers have such predatory, ‘loss leader’ packages in states all around us and today’s PLCB decision serves up a competitive disadvantage that can be destructive to small businesses, such as our suppliers, across the state.”

The BOP also believes that the PLCB exceeded its “legal authority and obligation to the welfare of citizens of Pennsylvania in today’s ruling…though an advance for all who celebrate the diversity of beer brands and flavors, [the ruling] has failed on some levels and has inexplicably handed a huge advantage to out-of-state, global brewing entities.”  Ted Zeller, BOP General Counsel, said the new interpretation opens the door for large manufacturers to sell 18 packs.  That, he said, would put family-owned and smaller craft breweries at a disadvantage because the larger companies can offer lower prices for the larger packs, which most smaller operations don’t have the resources to manufacture and market themselves.  “We’re not against 12-packs in any shape or form, but we’re against being competitively disadvantaged based on a legal interpretation we’ve relied upon since Prohibition.”

Because this rule change is an interpretation of an agency rule rather than a newly adopted statute, we can probably expect a challenge in the court system and possible reversal.  But until then, consumers should be on the look out for 12 packs in their local distributor as soon as brewers with the capacity can change their product packaging.

Cheers!

The Brewholder

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