Justices to hear Pa. beer battle

HARRISBURG - Michael Cortez never dreamed he'd be heading to the highest court in the state over a six-pack of beer.

But the vice president and general counsel for Sheetz Inc. will do just that Wednesday when his central Pennsylvania convenience-store chain appears before the Supreme Court to resolve a dispute over where beer can be sold in the state.

The fundamental question: Does Pennsylvania's arcane and, some argue, outdated liquor code allow the company to sell six-packs to go at one of its stores in Altoona?

How the justices rule could affect where and how Pennsylvanians buy beer, long a sore point in a state where consumers complain that the six-pack is a rare sight on store shelves.

A ruling favorable to Sheetz could mean many more places to pick up a six-pack.

It would also mean increased competition for thousands of beer distributors, bars and taverns, which say such a decision would cost them customers and cut into their livelihoods.

"It's David vs. Goliath," said Mary Lou Hogan, executive secretary and counsel for the Malt Beverage Distributors Association, which is battling Sheetz in the case.

"If Sheetz can sell beer, so can Wal-Mart and Costco and all the other big chains," she said. "You tell me what will happen to small businesses that try to compete with those giants."

Cortez disagreed. "This isn't about whether convenience stores or grocery stores or other big stores can sell beer," he said. "It's about whether one of our stores can do it."

He added: "I never thought we'd be here arguing this."

Consumers in Pennsylvania can buy beer by the 24-bottle case at beer distributors, or head to bars to buy up to two six-packs, often at marked-up prices.

About 500 eateries, such as delicatessens and pizza shops, can sell six-packs to go and serve beer as long as they meet space, seating and other requirements, according to the Pennsylvania Liquor Control Board, which approves the licenses.

The board awarded Sheetz such a license in 2004.

The company had built a large seating area and kitchen at its Altoona store. It wanted to sell six-packs there but did not want to serve beer on the premises.

The Liquor Control Board said the Sheetz store, with its new dining area, met the criteria for a beer license.

But beer distributors fought the decision, and the disagreement revolves in part around competing interpretations of a passage in the state's liqour code.

The Malt Beverage Distributors Association contends that Sheetz falls short of the code's requirements because it wants to sell beer only for take-out and not for drinking on the premises.

It also says that if Sheetz succeeds, other convenience and grocery stores will rush to build small eating areas so they can apply for a beer license.

"You can't make profound changes in the way, and venues, in which beer will be sold without changes to the law," said Robert Hoffman, the association's attorney. "It is not the Liquor Control Boards's job to rewrite the law."

Even if the association succeeds in the Sheetz case, it faces another legal fight.

This year, the Liquor Control Board licensed Wegmans Food Market Inc. to sell six-packs of beer at six supermarkets in Pennsylvania, including stores in State College, Wilkes-Barre and Williamsport.

Those supermarkets have eat-in cafes that qualify them for restaurant licenses, rather than eatery licenses like the one that Sheetz sought. That means Wegmans can choose to sell wine and hard liquor in addition to beer.

The Malt Beverage Distributors Association is challenging Wegmans in Commonwealth Court.

Hoffman said the Wegmans case could leave a much broader stamp on the business of selling beer in Pennsylvania.

"I think the Wegmans case is much bigger than Sheetz because it essentially questions which venues are allowed to sell beer in this state and which aren't," he said.

And the stakes are high when it comes to beer sales.

According to the Pennsylvania Beer Wholesalers Association, the economic impact of beer-related businesses to the state's economy is nearly $7 billion annually. The beer industry employs 80,873 workers, providing them with $2.3 billion in wages and benefits.

For Sheetz's Cortez, however, the issue is specific to one store in Altoona.

"Ultimately, do we think that consumers in Pennsylvania deserve to be able to buy beer like people in most other states in the union do? Yes," he said. "But we believe that's a separate issue."