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Pa.L.C.B. Announces Second Restaurant Liquor License Auction Under Act 39 of 2016

The Pennsylvania Liquor Control Board has announced the second restaurant liquor license auction, which is permitted under Act 39 of 2016.  These auctions are for “zombie licenses” that have been expired and in possession of the Pa.L.C.B. dating back to the year 2000.  In this round of the zombie license auction, the Pa.L.C.B. is auctioning off 50 licenses from 48 counties.  The Pa.L.C.B. stated that its goal is “intended to further test and evaluate market reaction while also maximizing auction revenue and preserving the value of existing, non-expired licenses.”

The first auction offered a limited number of licenses from a limited number of counties.  The newly announced auction will feature one license each from 40 counties that did not have licenses auctioned in the first auction.  Those counties are: Armstrong, Beaver, Bedford, Berks, Bradford, Cambria, Carbon, Clarion, Clearfield, Clinton, Columbia, Crawford, Elk, Fayette, Franklin, Greene, Huntingdon, Jefferson, Lackawanna, Lawrence, Lebanon, Luzerne, Lycoming, McKean, Mercer, Mifflin, Monroe, Montour, Northampton, Northumberland, Pike, Potter, Schuylkill, Snyder, Sullivan, Susquehanna, Venango, Warren, Wayne and Wyoming. Additionally, one license will be available in each of the following counties, for which the Pa.L.C.B. stated the bids from the first auction demonstrated a high demand: Chester, Dauphin, Lancaster, Lehigh, Montgomery and York.  Finally, two licenses each will be available in Allegheny and Philadelphia counties.

Similar to the first auction, this round will be through a sealed-bid process.  Bids for the available licenses are due on March 3, 2017, at noon.  The bids will be opened and the winners of the auction will be determined during the week of March 6, 2017.  The minimum bid for each license is $25,000, which must be accompanied by a $5,000 surety to ensure the bidder’s ability to pay for the license.  The highest bidder will be given the ability to file a license transfer application with the Pa.L.C.B. within 6 months of winning.  However, if the winner’s payment is not received by the Pa.L.C.B. within 2 weeks of winning, the winning bidder will lose the chance to file the transfer application, and the Pa.L.C.B. will give the second-highest bidder six months to file the transfer application.

In the first auction, the two Lehigh County licenses sold for $120,011 and $231,000 respectively.  The price disparity between the bids shows the unpredictability of these auctions.  One winning bidder got a license well under the current market value, while the other is slightly above the current market value in Lehigh County.

If you wish to submit a bid in the Pa.L.C.B. liquor license auction, or have any questions about this post, please contact Matthew Andersen, Esquire, at mandersen@nmmlaw.com or our offices at (610) 391-1800.  For information regarding federal and Pennsylvania liquor law matters or general manufacturing and distribution advice, please contact Liquor Law Department Chair Theodore J. Zeller III, Esquire, at tzeller@nmmlaw.com or at our offices at 610-391-1800.