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New Pennsylvania HB 1690: The Cidery Dilemma

Norris McLaughlin Liquor Law Blog, Legal Liquor, Ted Zeller, Attorneys at Law

As promised, I will continue to outline nuances of the new changes to the Pennsylvania Liquor Code and choices that consumers, manufacturers, wholesalers and retailers can make. HB 1690 will become effective in early August and it will be interesting to evaluate what impacts the new law will have on the Pennsylvania market. The changes present different options for cider manufacturers who were limited to Pennsylvania’s previous strict requirements. Under prior law, alcoholic cider manufacturers, as defined in the Liquor Code, could sell cider like beer in the Commonwealth; that is, they could sell through wholesalers/importing distributors, which could sell to bars and be carried by distributors by the case. As mentioned, the definition of alcoholic cider was quite restrictive and was defined as beverages which may contain carbonation in an amount not to exceed 392 one thousandths of a gram per hundred milliliters and flavors, produced through alcoholic fermentation of any fruit or fruit juice, consisting of no more than 5.5% alcohol by volume. With an ABV limitation of 5.5%, the cider market in Pennsylvania was quite limited since all other cider makers had to resort to the winery laws in the State. Yes, limited wineries could produce cider and could sell directly from its own premises or directly to restaurants, bars and hotels, but could not use the Pennsylvania distributor as a bulk seller of cider. Instead, any consumer cider sales over 5.5% ABV had to be processed through the Pennsylvania State Store system, good luck with that.

Under the new PA Law, the definition of alcoholic cider has been raised to 8.5% ABV and the carbonation and fruit fermentation requirements will remain the same. This means that you could choose a brewery license and sell cider like beer through distributors, instead of the State Store. Beer wholesalers could also sell cider to bars and restaurants but you expose yourself to exclusive, perpetual territorial rights which only apply to beer franchise laws. Remember, on many levels, beer is more heavily regulated and restricted in Pennsylvania than other alcohols. Also, if you went for a brewery license, you could not take advantage of the new laws that allow limited distilleries and wineries to sell each others products with any type of beer for on-premise consumption. You would need to go for a brewery and a brew pub license (which means you need seats for 30 and a health permit and, again, distilleries and wineries have no such limits). If you stayed with the winery license, you could sell any beer, other limited wines, and other limited distillery products not only at your limited wine production licensed premises but also any satellite locations for on-premise consumption only. You could sell your cider for offpremise consumption at your production site or satellite locations. For some reason, it appears that limited distilleries only get this expanded ability to sell any beer or other limited wines at the production premises and not their satellites. In addition with the winery license, you could sell direct to bars and restaurants without involving state beer franchise laws but you could not sell to beer distributors. Yes, I know it is confusing, but welcome to Pennsylvania.

For additional information regarding this matter or for addressing any other liquor law matters, please contact Theodore J. Zeller III, Esquire at tzeller@nmmlaw.com or at our offices at 610-391-1800.