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Wednesday, June 4, 2008

David Shipula is bugging me

David Shipula is the current president of the Malt Beverage Distributors Association of Pennsylvania. (Disclosure: I was compensated to travel to Pittsburgh and address the MBDAPA several years ago; I do freelance consulting for some members of the Association.) He is also the owner of Beer Super in Wilkes-Barre. He seems to be a good guy, working for the Association.

But he's saying some stuff in the papers lately that bugs me.

In the May 19 issue of the Philadelphia Inquirer, he writes in a piece titled "Keep Beer in Beer Stores," "Now, I can't be the only person who sees a problem with making it easy to buy beer and gasoline in one convenient location."
No, you're not, but just because two people think french-kissing makes girls pregnant doesn't mean we're going to be overrun with babies. People drive to gas stations to buy gas, sure, but they also drive to Beer Super to buy beer. Are the gasoline fumes going to drive them to drink to excess on the way home? There's nothing about buying gas that makes people more likely to drink. Is it the "ice-cold sixpack" "waved in their face" that Shipula brings up that's the problem at the gas station? Funny, because he also lauds people buying six-packs at Pennsylvania's restaurants and bars, most of which they're driving away with, judging by the parking lots at so many of them. I know there's no bar within walking distance of my house. Beer at gas stations driving people to drink is a bogeyman. It makes no sense in the light of day, or reason.

Then he says, "They also want the supermarket shopping experience to remain something the entire family can enjoy without giving children - from toddlers to teenagers - the idea that beer is as harmless as, say, a calorie-laden, high-fructose corn syrup-laced soft drink."
Yet it's okay for beer to be sold at a restaurant or deli or pizzeria where the family's getting dinner? What, it's raw food that makes beer scary? Besides, when was the last time you saw "the entire family" enjoy "the supermarket shopping experience"? On an Ozzie & Harriet re-run? This paragraph is so ridiculous it's embarrassing.

In the Johnstown Tribune-Democrat on June 2, he wrote a letter that said "Sheetz has its gas pumps on one property deed and its convenience store on another to skirt the law prohibiting beer sales at gas stations."
What law would that be? I searched the entire PA Liquor Code, and the only mention I saw of gas stations, service stations, or gasoline sales is here, under the rules for who has standing to petition licenses being granted (standing to petition, i.e., those who have half a leg to stand on as opposed to total loonies), where it's noted that the MBDA had standing to petition an "application for a double transfer of an eating place malt beverage license to premises on which a restaurant, convenience store, and gas station would operate", that is, the Sheetz case. There is no such law. Period.

In the Scranton Times-Tribune on April 8, he wrote another letter that said "In fact, the buying power of large supermarket chains like Wegmans makes it very difficult for small food and beverage producers to compete profitably. Shelf space is at such a premium in supermarkets that manufacturers and distributors are forced to pay “slotting allowances” to even get their products displayed on supermarket shelves."
Manufacturers and distributors do pay "slotting allowances," also known as "slotting fees," to get their products on supermarket shelves...except for alcohol beverages. That's illegal, slotting fees for alcohol beverages having been banned by the then-Bureau of Alcohol, Tobacco, and Firearms in 1995, a federal ban. Once again, a bogeyman: grocery wholesalers have to pay slotting fees, beer wholesalers do not. As it happens, Wegmans loves small producers; it gives their stores a competitive advantage. I've been in Wegmans in New York: the beer selection's quite nice.

That's also where he says this: "Individual beer distributors can own one and only one license for retail, off-premises consumption — and then only in quantities of one case or more of beer. Already, Wegmans has been granted six licenses by the Liquor Control Board."
True, but they're not the same kind of license! Wegman's licenses are so-called "deli licenses," which allow only sixpack sales. That's how chains of bars own more than one license, something Shipula doesn't mind. Why doesn't he care that Appleby's, for example, owns multiple licenses that allow retail, off-premises consumption (as all tavern licenses do in PA)? Because Appleby's doesn't sell sixpacks to go. If they aren't competition, he doesn't care. This is all about money and competition.

Shipula admits that, finally, after throwing smoke. He says all he wants is a level playing field. But that's not going to happen with the maze-like provisions of the Pennsylvania Liquor Code, where the MBDAPA apparently found reason to argue that if Sheetz doesn't want to sell on-premise, they can't sell off-premise. This ignores Appleby's, of course, which does sell on-premise but chooses not to sell off-premise, as do many, if not the majority of Pennsylvania's restaurants with liquor licenses.

These arguments play on fears -- Beer is dangerous! People will use it irresponsibly at the slightest provocation! -- that it is stunning to hear coming from the head of a beer industry association. They are full of statements and implications that are simply not true. They are worrisome.

I understand that the distributors see supermarket sales as the single greatest threat to their livelihood, and this looks like the wedge to open that up. I think that instead of spending their time and money fighting against something that is simply, clearly legal under the Code as it stands, they should be putting their efforts into changing the laws that govern how all booze is sold in PA. Get rid of the case law and allow six-pack and single sales for distributors ASAP. Get rid of the State Store system and let distributors sell wine and spirits. Get normal.

I am on the side of the beer business. I support them, I work with them, I'm grateful to them. But I am a consumer. I want to buy beer where and how everyone else in the Union does, and I don't see any good reasons why I should not be able to. All I see above are bad reasons. Let's fix this. All of it.


@SKeithJ said...

It's rough to see you so angry Lew. I don't like. I hope that at the end of the day, when legislation does finally change, the people making the decisions will look with open minds on how ridiculous some of the arguements are.

On a brighter note, Jack touched on the Gilded Otter. My parents went to New Paltz and took me on trips a while back. I haven't been there in forever and a day. How's the Brew Pub?

Lew Bryson said...

Well, I am angry. Obfuscation makes me that way.

The Gilded Otter was great, as good or better than I remembered it. Darren's beers were just the thing after five hours of driving. Wish we'd had time for lunch.

Unknown said...

Excellent post. Sums up my feelings exactly. Being new to PA, I don't understand the fear that many lifelong residents have of supermarket alcohol sales. But I could live without that particular convenience if the distros were allowed to sell any quantity of beer, possibly wine. I can't see that hurting the businesses at all, and the children will be fine as well.

It's the lack of obvious reason that kills me- why do we have to buy 24 beers to avoid having prices unreasonably marked up, and why does no-one I've talked to know the answer to that question?

Another question- whatever happened to the Senate bill about the case law?

Lew Bryson said...

Funny thing, Matt: according to a guy I met who worked for the lawyer who wrote it, the 'case law' was part of a model code written by the beer wholesalers and handed to the PA legislature after Repeal. They proceeded to enact most of it as part of the PA Liquor Code (that agrees with what I read in a report written some 25 years ago on the PLCB). At the time, it seemed like a great idea to be able to only sell cases, without the annoyance of breaking them down for individual sale: less work, easier sales. So now they're hoist on their own petard.

As for the Senate six-pack bill? Who knows? The status seems to change almost weekly, and it's months past when it was supposed to pass. I gave up holding my breath in February.

Anonymous said...

Well here in Centre county things aren't so well. With Wegmans and Sheetz corrupting our decent standards of morality, we now have wimmen buying beer recklessly at the same place they buy food and their kids are exposed to a near pornographic isle of sixpacks. We had to put a border crossing from Blair county to keep drivers who may have purchased gas and beer at the same time off our streets. We at Otto's have more workman's comp issues from the excess beer deliveries to Wegman's 300 yards away. Not to mention the BMW we had to buy Danny Wegman for a shelf fee. Fire and brimstone stuff happening here. Really.

Charlie Schnable
Otto's Pub and Brewery

Lew Bryson said...

Ah, Charlie. Thank you for that front-line report from where these terrible prophecies are coming true. I feel terrible, and most of all for the poor people in all those other states where this kind of malicious chaos has reigned for years.

Hee hee!

Anonymous said...

Here's a link that might make you angry:

The HR perspective is indicative of our societal philosophy on alcohol.

My comment is about the 25th down, from anon that starts, "We have a severe drinking problem in this country..."

Lew Bryson said...

Yup, that made me angry. I encountered that kind of thinking 15 years ago at work; I just didn't believe it. One beer? Made me dangerous? Ridiculous.

Anonymous said...

There you go again talking about the supermarket business and how they conduct there business you have not a clue about slotting allowances for beer companies,great its against the law but take it from someone who called on some of the largest supermarket chains in the state there are so many ways to skirt this issue have you heard the term co-operative merchandising agreements it basically says the more beer you sell in a given six or one year period and hit your goals you will be rewarded,free goods,trips.merchandise etc but you are working and writing for the company that will benefit most if beer were allowed in supermarkets,just today miller and coors will be combining there marketing and sales-forces to fight you think there will even be a small crumb left for any local craft beer in pennsylvania think not or if it is will be so priced out of the market they will starve to deaf..

Anonymous said...

as a new yorker who has visited pa often let me tell you this story . there is a beer beverage about 2 miles from me that has been open since i was a kid i havent shopped there in years but i hear its still the same . the place is dirty and ready to fall apart they sell maybe 9 different beers . there cooler is a joke beers are a little colder then room temperture in there . within a mile of him are at least 4 supermarkets 6 gas stations and another beverage place yet this guy is still in business david shipula you are a joke . your one of those guys if your business made a net million dollar profit one year but a penny less the next year you would lay off half your staff and raise your prices citing hard economic times

Anonymous said...

When this guy writes the op-ed or letter to the editor does the paper say who he represents? It bothers me when articles or letters read like they were written by disinterested citizens. I hope they made it clear he was a paid lobbyist or merchant avoiding competition.

Lew Bryson said...

Three Anonymousers...

Okay. David Shipula does always identify himself as the president of the association, and even says that it's about his business. He's up front about that; it's the arguments he uses that irk me.

There are crappy booze stores everywhere, unfortunately, but yeah, a monopoly/oligopoly situation makes things worse.

And...whatever you're saying, wouldn't it be great if the state would actually enforce laws like these, and the tapline cleaning law, and price-fixing laws, and like that, instead of all the silly crap they're running around enforcing now? Be a better market, wouldn't it? Supermarket sales seem to be working GREAT for craft brewers in the West; why would it be different here?

Bruce said...

Wow, this guy would soil his pants if he saw some of the stores up here in New Hampshire.

Beer, wine, guns, ammunition, machetes, and chainsaws all in one convenient stop.

It's a wonder the state hasn't depopulated itself.

Lew Bryson said...

Reminds me of a place a buddy took me to in Texas (Shiner, Texas, actually): beer, gas, guns, ammo, hunting knives, porno, live bait and fishing gear, and the guy did dentistry in the back. And Shipula's worried about gasoline and the "family shopping experience"? Weenie.

Anonymous said...

He'd REALLY be bugging you if you were watching Channel 22 news. He was on at 6pm (about a 10 minute segment) and will be on again at 7pm., click on WYOU Interactive

Anonymous said...

I travel quite a bit on business, and PA is a GREAT beer state with terrible beer laws. Many times I visit PA and leave empty handed because I can't find a "deli" to purchase a few craft beers to pack in my suitcase. I think craft beer sales would go up if the case law was changed, because you would see more tourists purchasing singles and six packs to take home.

Here in Nashville, Kroger and Publix carry beers from Yazoo and Terrapin, and I have yet to see my regular mom and pop bottle shops go under. Craft beer on the shelves of supermarkets means more exposure. I agree with you Lew, PA needs to be "normal" when it comes to beer. People think I am joking when I explain PA beer laws to them. Using the children argument is nothing but lame anecdotal evidence, and the people that use it are fully aware of that.