The landscape of liquor license options for the hospitality entrepreneur
The past two years have brought a lot of change for many business owners, not the least of which are owners in the hospitality industry. While this cycle of change has unfortunately caused some to close their doors, leaving the industry altogether, we have also seen an unprecedented number of new entrepreneurs curious about the different options for selling alcohol in Pennsylvania as a manufacturer, retailer or distributor. To even consider entering this highly regulated and competitive landscape, would-be entrepreneurs need a working knowledge of the options available and an idea of the costs and challenges associated with each.
What is the “quota system”
Certain categories of liquor licenses are bought and sold subject to what is called the “quota system”. The quota system restricts these categories of licenses (“R Restaurant Licenses, “C” Club Licenses, and “D” Distributor Licenses), so that only a finite number can be issued per county, based on population. As a general rule, this number is one license per 3000 inhabitants, but it can vary depending on the license. Since most counties in Pennsylvania already have more retail liquor licenses than the quota currently allows, a new business owner looking to acquire an “R” license would need to purchase that license from an owner. existing license in the desired county.