Why a hit canned cocktail costs Pennsylvania stores more: the 2024 law that kept the state in the middle

Beer distributors and convenience stores in Pennsylvania are paying the state more for one of the country's best-selling canned cocktails than they once paid its maker, Spotlight PA reported on Friday, because the Pennsylvania Liquor Control Board decided to buy all of the company's ready-to-drink products itself.

For shoppers, that can mean higher shelf prices or fewer places carrying the product. For the state, it's a question of how much control the PLCB should have over a fast-growing category it both sells and regulates.

What happened

According to Spotlight PA, distributors buying directly from the maker, Stateside, paid as little as $47.99 for a 24-can case of its Super Lyte vodka cocktail. In a June 3 letter, PLCB Executive Director Rodrigo Diaz told the company the agency "wants to buy all" of its ready-to-drink varieties. Now distributors buy from the state, and Spotlight found a wholesale price of $53.99 a case at one PLCB service center. State rules require the wholesale price to be at least 10% below the PLCB's own retail price, which distributors said leaves them almost no margin, the report said.

PLCB spokesman Shawn Kelly told Spotlight the Legislature intended the agency to be the "primary" wholesaler of these drinks, with direct sales as "an additional option." Asked about the agency being regulator, supplier and competitor at once, he said that is "for lawmakers to address." Kelly said the PLCB returns about $750 million a year to the state's general fund.

What the records add

The arrangement comes from Senate Bill 688 of the 2023-24 session, signed July 17, 2024, as Act 86 of 2024. It created a ready-to-drink cocktail permit so beer distributors, grocery and convenience stores, restaurants and hotels could sell spirits-based canned drinks, according to the PLCB's summary of the law%20(Final).pdf). Spotlight reported that the law also kept the PLCB's right to buy and sell the products.

Sponsors. The prime sponsor was Sen. Mike Regan, a Republican from the 31st District. All 11 co-sponsors listed on the bill page are Republicans.

A two-vote margin in the Senate. The Senate first passed the bill 26-24 on June 5, 2024. Republicans voted 26-2 for it, with Sens. Michele Brooks and Doug Mastriano voting no. All 22 Democrats voted no.

Wider support after House changes. The House amended the bill and passed it 163-38 on July 2, 2024. Democrats voted 88-14 and Republicans 75-24. The Senate then agreed to the House version 32-17 on July 11: Republicans 22-5, and Democrats split 10-12.

Fourteen months. The bill was referred to the Senate Law and Justice Committee on May 5, 2023, and reached the governor's desk in July 2024, according to its history.

What happens next

Spotlight PA reported no pending legislation, hearings or PLCB rule changes on the issue, and Stateside told the outlet it expects to supply the PLCB without trouble once production expands. Any change to the PLCB's role would take a new law. With the two-year session ending Nov. 30 and four voting days left, the House on Nov. 9 and 10 and the Senate on Nov. 17 and 18, a change this year is unlikely; a bill introduced in January would start the process over.