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The Buzz

A Beerfly's view. If you see anything here that seems crazy, click here.

Fresh Buzz

Vintage Buzz

2004 Buzz

Oct. '04: Beer's Image 

Sept. '04: Clearly Insane 

August '04: Love of Lager

July '04: Speak Up!

June '04: Get Drafted

May '04: Shedding Tiers

April '04: Keg Party

March '04: Ultra Madness

February '04: Case Law

January '04: Best of 2003

2003 Buzz


Dec. '03: Wine good!

Nov. '03: Say Anything

Oct. '03: Shots at Saveur

Sept. '03: Pay For It!

August '03: Subtlety

July '03: RIP, Corner Bar

June '03: Screw 'Em!

May '03: Extreme Beer?

April '03: Liquor Taxes

March '03: St. Patrick's

February '03: Coffee

January '03: Taxes


November, 2004

Are We Ready for the Packie?

Most New Englanders I know refer to liquor stores as "packies:" package stores. That’s not because you buy stuff there to "get a package," an old euphemism for getting a drunk on, but because you bought "packaged goods" there, booze in a bottle as opposed to booze by the drink at a tavern. Packies sell only to go, not for on-premise consumption. Packies sell beer, wine, and spirits (though there are exceptions), lottery tickets, smokes, and whisky magazines.

I liked the packie. When I lived in New England, there was one three doors from my apartment, and we never went dry. There were three or four that I went to regularly, including one near Farmington that I went to darned near religiously, and one in Hartford that carried Orval and Old Peculier, a special treat. Of course, Connecticut also had beer in the supermarkets, but I rarely bought it there.

Why would I? The hours were the same (at 8:00 the packie closed, and the supermarket pulled a big curtain down over the beer selection on the shelves), the prices were close, and the supermarket never had anywhere near the selection. Not to mention that no one at the supermarket knew the first thing about beer.

I know there are exceptions. I’ve lived in California, and there are supermarkets there with great beer selections. I bought my first Anchor OSA in a California supermarket, back in 1987. I’ve seen good selections in upstate New York and Virginia. Supermarkets can do a decent job.

But when it comes to serious beverage selection, give me a specialist every time. As I used to argue, where do you want to buy beer? A place where they sell nothing but booze, day in and day out? Or from a place where the guy stocking the beer may be wrapping pork chops tomorrow and was maybe doing inventory on the disposable diaper shelves last week?

Why do I bring this up? The three-tier system, as I’ve said elsewhere, is under serious legal assault, and doesn’t look like it’s going to survive. That’s going to bring about direct brewer-to-supermarket sales in the states where supermarket sales are legal…and that will put pressure on non-supermarket sale states to go that way. I can’t see such sales becoming federally mandated or enforced by court decision – the 21st Amendment is pretty clear on that, and interstate commerce is not threatened – but believe it: the pressure will be there.

Resist it. I don’t like the idea of supermarket sales at all, don’t want to see beer in the convenience stores, don’t want wine in the drugstore, don’t want pints of whiskey in the gas station. That may sound out of character, may sound like the kind of stupid booze law I’ve been against before, and maybe it’s time to hit the crazy link at the top of the page. After all, wouldn’t it be great to be able to go to a nice supermarket, a Wegman’s or a Whole Foods or a Trader Joe’s, and get everything you need for a weekend: clams, fresh chicken, specialty bread, choice produce, a couple bottles of wine, the Cointreau you need for that special dessert, and a whole mess of good beer?

Okay, maybe it would be great. Maybe it would be really cool for everyone in the Philadelphia five-county area to be able to drive to a place like that within 30 minutes and do your party shopping. But what about the poor boogers out in Reading, and Easton, and Wilkes-Barre, and Erie? I know they have decent beer distributors now, but what’s going to happen to those places when the supermarkets skim off all their volume sales?

Don’t lose me now, because I’m going to talk biz for a little. If supermarkets get direct sales from producers, here’s what’s going to happen. Say you’re Anheuser-Busch. You’ve got a choice between continuing to deal with a bunch of wholesalers, who often get rambunctious and often sell beer other than yours…or you can dump the wholesalers and use your wonderful transport network to send beer directly to the supermarkets’ warehouses. You’ll probably still have over 85% of your off-premise business, with one customer instead of five or six, and you’re going almost direct to the beer-drinkers.

Your wholesalers? They’re drying up and blowing away, because they just lost all the Bud sales they used to make to the supers, plus the beer stores they supply are hurting because the huge supers are underpricing them with the great deals they’re getting from you because they’re not paying the wholesalers’ markups any more. Pretty soon you’ll be able to move in, buy them out, and use their fancy refrigerated warehouses to deliver even more cheap beer to the supermarkets.

Who’s happy with this? Well, Joe Six-pack is happy, because now he gets cheap Bud Light at the Piggly-Wiggly. Mrs. Papacappi down at the Piggly-Wiggly is happy, because she’s getting a really great price on Bud Light, which lets her run it as a loss leader to get Joe in the store to sell him over-priced deli meats, and she’s finally getting slotting fees from her beer shelves, which is going to make this a great year for her. Mich Budman, the A-B rep, is happy, because he’s got so many fewer calls to make, even though he’s still making sales like he used to.

Who’s screwed? Let’s see…Jim Grottenbier, the local small brewer, is bumming. He’s been effectively shut out of the supermarkets because he can’t afford the slotting fees (and even if he could, Mrs. Papacappi doesn’t really want his stuff in there any more: she’s making so much money off her new slotting fees that Jim’s beer is just going to screw up her accounting; besides, Budman bought up so much space there’s not really much left for Jim’s beer). Serena Haulenbeeren’s wholesale business is croaking, so she’s grabbing craft and import brands left and right (even though she doesn’t have a clue on how to sell anything that does under a pallet a week on the floor). Walt Bythecase (it’s an old English name, "bith-cass"), the retail guy, isn’t selling much Bud any more, or Miller, or Coors, or Corona, or Heineken…and while there wasn’t a lot of excitement to selling those beers, they sure did pay the bills.

Oh, right: and you. You get screwed. Because Walt’s going to go out of business, and Serena’s brand-flailing is going to put a lot of micros out of your area, and Jim’s beer is going to be a lot harder to find. If you think Mrs. Papacappi is going to be selling a lot of micros, you’re a fool. Supermarkets sell a lot of high-end foods, it’s true, but beer’s bulky, it doesn’t have a margin like wine does (and if Mrs. Papacappi can sell wine, she’s going to use as much space as she can for the high-margin, low volume stuff), and it not only needs refrigeration, it’s light-sensitive. Supermarkets like the sure thing. There will be exceptions, like Trader Joe’s, and Wegman’s, and so on, but unless you live in a major city or its suburbs, you are looking at mail-order.

At least, that’s my best guess. Me, I’d just as soon see the packie. My ideal situation starts with the State Store system broken up completely, a necessary first step in Pennsylvania, Virginia, and the remaining control states. Pennsylvania’s current thaw under Chairman Newman is dictatorship with a human face: even if you can get better wine, it’s still a state-run business. Why? That's downright Stalinist, sonny. I’d like to see them replaced by privately-owned package stores selling all kinds of booze with a generous licensing policy: booze superstores.

Want more? I’d like to see the current tavern licensing system thoroughly revamped to allow more licenses that are more strictly policed for public nuisance. It is my firm belief that more licenses will improve the character of bars, rather than erode it. And I’d like to be able to buy beer in any quantity I want, any day of the week, with samples…at the packie. Hell, people think there’s a "deli license" in Pennsylvania (my own state rep thought so) that allows a place to sell beer and sandwiches and deli stuff…make it easier to get a tavern license, and that’s what you’ve got.

Sounds great to me. Only problem is…it doesn’t work. How do you allow delis and packies and bars and restaurants to sell booze, but come up with a real legal test that excludes chain supermarkets? I have one idea, but it’s anathema to me: do the same as Maryland’s brewpub law, and limit the number of outlets that can be owned by one group. Works, but exactly why should it be that way? I can’t think of any solid legal reason, just the personal one that I want it to be that way. But only in this case; I wouldn’t want a law like that keeping Iron Hill from building the new brewpub in Phoenixville that Jack Curtin keeps talking about. Maybe a law that limits the number of retail licenses except in the case of brewpubs?

Is it time to click on the crazy link up at the top of the page? Maybe. It’s sure a lesson on how to write bad law. And it’s time to get to my real point: no one knows what’s going to happen in the next ten years in the booze business. Wholesale and retail is going to change completely, and it’s going to revolve around midnight laws that are real "sausage grinders," laws made by ignorant legislators influenced by well-financed lobbyists, laws that will have unintended consequences. And I almost guarantee that these laws will not be friendly to the small brewer and small importer...or you.

You need to get involved. We all need to get involved. How? I’m not sure at this point, but I’m working on it. I need to find a good booze lawyer. When this starts going down, it’s going to be the most important changes to booze law since Repeal, and speaking as a Pennsylvanian…I’d kinda like to see them get it right this time. More to come.


Copyright © 2008 Lew Bryson. All rights reserved. 
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Revised: March 07, 2005