Measure will allow equal access for these low-abv products
The Distilled Spirits Council of the United States (DISCUS) welcomes the introduction of SB 688 by Senator Mike Regan which would allow low-alcohol-by-volume spirits ready-to-drink cocktails (RTDs) to be sold from state stores, grocery stores, convenience stores, and local restaurants and taverns alongside their beer- and wine-based counterparts.
“In Pennsylvania, beer- and wine-based RTDs can be sold in nearly 11,000 locations, including grocery and convenience stores,” said Senator Mike Regan. “Meanwhile, spirits RTDs with the same or lower amounts of alcohol can only be sold in about 600 locations. My bill helps level the playing field for these comparable products, providing economic opportunity to thousands of Pennsylvania businesses and increasing consumer convenience.”
Expanding access to spirits RTDs in Pennsylvania will help small businesses, including the more than 117 craft distilleries in the state as well as the many grocery and convenience stores that will sell their products. By applying the 18% liquor tax to RTDs containing up to 12.5% alcohol and expanding access to these products, the state could gain between $153.3 and $184.5 million in new revenue over the course of three years.
Despite growing consumer demand for spirits RTDs, a DISCUS survey found that nearly two-thirds (62%) of craft spirits distillers say they are not producing spirits RTD products due to market barriers.
“As a small producer in Pennsylvania, we’ve been hesitant to enter into the ready-to-drink market simply because we know we will be at a 10,000-store disadvantage even though these products have the same alcohol content as beer and wine RTDs,” said Herman C. Mihalich, founder and distiller at Dad’s Hat Rye Whiskey. “What’s worse, is our consumers want these products, but because of the unfair market structure, we can’t meet that consumer demand. We are being left out of the fastest growing spirits category, and that stifles innovation as well as consumer choice.”
A recent survey showed consumers support greater access to these products, including in grocery and convenience stores, with 83 percent agreeing that spirits RTDs should be sold where beer and wine are available for purchase.
“It is time for Pennsylvania to do right by small businesses and consumers and provide equal access for spirits RTDs,” said Andy Deloney, senior vice president of state government relations at DISCUS. “There is no reason to treat these similar products differently. SB 688 would support consumer choice and convenience.”
The distilled spirits industry is a significant driver of economic activity in Pennsylvania, contributing to the vibrancy of the manufacturing, hospitality, tourism, and agriculture industries. There are currently 45,900 jobs in the state depending on the spirits industry, generating more than $4.29 billion in state economic activity each year. Greater access for spirits RTDs will allow the industry to contribute even more.
Pennsylvania is one of many states taking a closer look at this issue to ensure that producers of spirits-based RTDs are being treated fairly, recognizing that treating beverages differently based on the myth that some alcohol is “softer” than others sends a dangerous message to consumers.