The Pa.L.C.B., in answering a multitude of questions, has given Pennsylvania’s brewing industry some clarity concerning the ability to deliver beer directly to consumers. It affirmed that, breweries in Pennsylvania are now permitted to ship directly to consumers, with a few restrictions. This is the second legal opinion in two months that supports the proposition that a brewery’s direct sales to consumers are exempt from franchise laws. See our blog post on the other legal opinion here.
Initially, the Pa.L.C.B. states that a brewery must transport its beer either through a properly licensed transporter-for-hire or in properly identified vehicles, which do not have to be owned or leased by the brewery. To be properly identified, the vehicle must be marked with the brewery’s name, address and license number in letters no smaller than two inches high. Magnetic signs stuck to the side of the vehicle will suffice to meet this requirement. Additionally, the driver of the vehicle must have evidence that he/she is covered by the brewery’s privilege to deliver the beer, in the form of written identification that the driver is an employee of the brewery.
If the brewery hires an independent contractor to deliver its beer to consumers, the entity/independent contractor must have a transporter-for-hire license. In Pennsylvania, there are three types of transporter-for-hire licenses. The Class A license authorizes the holder to transport liquor, malt or brewed beverages, or alcohol to or from destinations located within Pennsylvania. The Class B license authorizes the holder to transport malt or brewed beverages to or from destinations located within Pennsylvania. The Class C license, which is a fleet license, authorizes the holder to transport liquor parcels within Pennsylvania. Therefore, if a brewery wishes to hire an independent contractor to deliver its beer, it must ensure the independent contractor has a Class A or Class B transporter-for-hire license.
The Pa.L.C.B. noted that there are no restrictions in the Liquor Code or its regulations to prohibit a brewery from shipping its products directly to a consumer for off-premises consumption. However, the actual sale must occur on the licensed premises, although there is no direction as to exactly how the sale must be consummated. The Liquor Code provides that distilleries and wineries may take orders over the telephone or online, but it does not say the same for breweries. As with all sales by a brewery for off-premises consumption, there is no size limitation or packaging restrictions for the sale. This means the brewery could sell cans, bottles, growlers, crowlers, or kegs and deliver them directly to a consumer’s house or place of business (as long as the beer is not being purchased for resale). What is not mentioned, but is implied in the brewery’s sale of beer for off-premises consumption, is that the brands being sold or delivered must be registered with the Pa.L.C.B. Also, the brewery will be responsible at the point of sale, if in person, or at the point of delivery to ensure that the consumer is of legal age to purchase alcohol in Pennsylvania.
With the explosion of breweries across the country and in Pennsylvania, this Pa.L.C.B. legal opinion further reduces the stranglehold (directly caused by beer franchise laws) that a beer wholesaler has over a brewery.