More about the Cost of Lancaster County Liquor Licenses

August 5, 2019
Aaron K. Zeamer

Thank you to Chad Umble for another informative article about the changing landscape for PA liquor licenses.  I’m sure there are many who read the article and wonder why the PLCB doesn’t just increase the number of available licenses or create a different kind of license for grocery stores and convenience stores to alleviate the pressure on the restaurants.  The answer to that question is neither simple nor clear, but I can give you some thoughts on why those options are unlikely to occur.

First, simply issuing more licenses would involve a change to the liquor code in Pennsylvania, which would have to pass through the legislature.  It is not as simple as the PLCB simply saying that the quota should be updated or more licenses should be issued.  Any time a bill is introduced regarding changes to the liquor code, it usually generates a lot of attention from many industry groups.  The Brewer’s Association, Restaurant and Lodging Association, Tavern Owners Association, the Malt Beverage Distributors Association, and more recently the Convenience Store Council and the Food Merchants Association, all are trade groups that are impacted by even small changes to the liquor code.  Each of these organizations represents members in various aspects of alcohol sales in the state and any change to the liquor code often impacts each of these groups very differently.  As a result, when liquor bills are advanced in the house or the senate, enormous pressure is placed on our legislators to recognize the interests of these various groups and not change the landscape to hurt any particular industry.  What often happens as a result of this is little or no change. 

Second, there are plenty of people and businesses who currently hold licenses throughout the state that are perfectly happy with the current market and do not want things to change.  They are currently sitting on a very valuable asset that they can sell and reap a large profit.  They have played by the rules of the current system for decades or more and see this increase in value as a retirement option or the fruits of their hard labor over the last 10, 20 or more years.  Those individuals don’t want the PLCB, our legislature, or anyone else suddenly opening the floodgates and allowing a large surge of licenses to become available in their area.  It would significantly reduce the value of their license almost overnight.  This problem is even more complicated by the fact that, in some areas of the state, licenses have little to no value.  So simply increasing the quota across the state for how many licenses can be issued based on the population may make the problem worse, not better.

The bottom line is that, like many issues facing our government, there is not an easy “one size fits all” answer.  There are varied interests and groups that have a significant stake in the current system and don’t want a change to negatively impact their business or industry.  Because of that, changes are often minimal and, with a few exceptions, take time to occur.  It is also why it is unlikely to see a large increase any time soon in the number of available restaurant licenses in Lancaster County or any other county across the state.

Aaron Zeamer is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He practices in a variety of areas including Business Law and Liquor License matters. Aaron works frequently with commercial real estate agents, brokers, restaurant and bar owners, breweries, distilleries, and wineries to facilitate the sale and transfer of PA liquor licenses.