1 1 COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES 2 HOUSE LIQUOR CONTROL COMMITTEE 3 PHOENIXVILLE BOROUGH HALL 4 351 BRIDGE STREET PHOENIXVILLE, PA 19460 5 WEDNESDAY, APRIL 4, 2018 6 1:00 P.M. 7 PUBLIC HEARING - UPDATE ON ACT 39 AND ACT 166 OF 2016 IMPACT ON CRAFT BREWERIES AND CRAFT DISTILLERIES 8 9 BEFORE: HONORABLE ADAM HARRIS, MAJORITY CHAIRMAN HONORABLE WARREN KAMPF 10 HONORABLE CRAIG STAATS HONORABLE MIKE TOBASH 11 HONORABLE JEFF WHEELAND HONORABLE PAUL COSTA, MINORITY CHAIRMAN 12 HONORABLE FRANK BURNS 13 14 15 16 17 18 19 20 21 22 23 24 25 SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 2 1 COMMITTEE STAFF PRESENT: 2 MICHAEL BIACCHI EXECUTIVE DIRECTOR, REPUBLICAN CAUCUS 3 LYNN BENKA-DAVIES 4 EXECUTIVE DIRECTOR, DEMOCRATIC CAUCUS BRITTNEY RODAS 5 RESEARCH ANALYST 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 3 1 I N D E X 2 OPENING REMARKS By Chairman Harris 4 3 By Chairman Costa 4 - 5 4 DISCUSSION AMONG PARTIES 5 - 8 5 PRESENTATION By Christian Lampe 8 - 15 6 QUESTIONS 15 - 20 7 PRESENTATION 8 By Mark Sofio 20 - 25 9 QUESTIONS 25 - 32 10 PRESENTATION By Robert Cassell 33 - 38 11 By Jared Atkins 38 - 39 12 QUESTIONS 39 - 54 13 Presentation By Attorney Jean Krack 54 - 59 14 QUESTIONS 59 - 68 15 PRESENTATION 16 By Jessica Capistrant 68 - 72 17 QUESTIONS 72 - 79 18 CONCLUDING REMARKS By Chairman Harris 80 19 20 21 22 23 24 25 SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 4 1 P R O C E E D I N G S ------------------------------------------------------- 2 CHAIRMAN HARRIS: On this beautiful 3 sunny day, thank you all for taking the time to come to 4 the hearing. It's going to give you an update on Act 5 39 and some of the changes we made, but also just a 6 general opportunity to get feedback from those in the 7 industry. 8 What we've been doing, is it working? 9 Is it not working? Should we still be tweaking things? 10 Is it time to maybe put the brakes on for a little bit? 11 So we're very excited to hear from all 12 of you. And on behalf of myself and my Co-Chair and 13 Representative Kampf, who invited us today, we want to 14 say thank you. 15 With that, I'll turn it over to Chairman 16 Costa for a few remarks. Then we'll have the members 17 and the staff introduce themselves. 18 CHAIRMAN COSTA: Thank you, Chairman 19 Harris. 20 I'm looking forward to hear - a lot of 21 times we make - lot of times we make decisions on how 22 we should do things -. Am I okay now? 23 Sorry about that. That was the wrong 24 mic. You know, we make decisions, and it's good to get 25 the feedback on how those decisions actually impacted SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 5 1 the business, not just our side, but also your side. 2 So we're anxious to hear what you all have to say. So 3 thank you for letting us be here. 4 CHAIRMAN HARRIS: Okay. Thank you. 5 And if I could just have a friendly 6 reminder? If everyone could put their phones - either 7 turn it off or on silent as we move forward or submerge 8 it in water. That will also keep it quiet, I've 9 figured out. 10 And we'll just start all the way to my 11 right. If we can just have all the members and staff 12 introduce themselves? 13 MS. RODAS: Hi. I'm Brittney. I work 14 for Representative Costa. 15 REPRESENTATIVE STAATS: Good afternoon, 16 everyone. I'm Craig Staats, representing the 145th 17 District in Bucks County. 18 REPRESENTATIVE BURNS: And I'm 19 Representative Frank Burns. I represent the 72nd 20 District in Cambria County. 21 REPRESENTATIVE WHEELAND: Good 22 afternoon, everyone. I'm Jeff Wheeland, 83rd District, 23 Williamsport. We're just about ready to open up 24 another small brewery, New Trail Brewery, in 25 Williamsport. SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 6 1 And a little bit of my history. I was a 2 former beer wholesaler and then beer retailer in my 3 previous life. 4 So again, I'm looking forward to the 5 testimony and I appreciate everyone participating. 6 REPRESENTATIVE KAMPF: So I'm Warren 7 Kampf. I'm actually the State Rep for this area. 8 We're in the 157th District today. 9 I want to thank the Committee and the 10 Chairmen for agreeing to host it here. I'm very proud 11 of this - this excellent town that we have, the Borough 12 of Phoenixville. It's undergoing quite a 13 transformation, really, because of the town fathers and 14 mothers working very hard to make that happen over the 15 last 20 to 25 years. 16 And the latest developments with craft 17 brewing and distilling coming to the town are very 18 interesting. So me being on the Committee, it made 19 sense that I would ask the Chairmen to take a look at 20 doing it - doing it here. 21 And I would be remiss if I didn't think 22 the Borough for allowing us to host us here. And here 23 we have the Mayor. Mayor Urscheler is back there to 24 the left. Thank you very much, Mayor, for allowing us 25 to be here and have the - have the hearing in this SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 7 1 hall. 2 CHAIRMAN HARRIS: Ditto. Thank you, 3 Mayor. I did type in Phoenixville Borough Hall, and it 4 took me to a boarded-up building a few blocks away, 5 which kind of concerned me. But this is actually very 6 - a very nice setting. 7 I'm Representative Adam Harris. I 8 represent the 82nd District, so I'm in the center part 9 of the state, Juniata, Franklin and Mifflin Counties. 10 CHAIRMAN COSTA: Good afternoon again, 11 everybody. 12 My district is part of the City of 13 Pittsburgh and its eastern suburbs in Allegheny County. 14 And I, again, look forward to hearing what you all have 15 to say. 16 MS. BENKA-DAVIES: Hi. I'm Lynn 17 Benka-Davies. I'm with - I'm with Representative Paul 18 Costa, as the Executive Director for the Liquor Control 19 Committee. 20 MR. BIACCHI: Mike Biacchi, House Liquor 21 Control Committee for Rep Harris. 22 CHAIRMAN HARRIS: Okay. 23 Well, I guess we're all ready to get 24 started. 25 So first off we have the panel of the SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 8 1 Brewers of Pennsylvania. If we could just have you 2 each introduce yourself and then you can begin with 3 your written testimony at your leisure. 4 ATTORNEY ZELLER: May it please the 5 House Liquor Committee, Attorney Ted Zeller. I'm 6 General Counsel to the Brewers of Pennsylvania and 7 counsel to - actually, to several of the breweries in 8 this great Town of Phoenixville. 9 You're absolutely right, it's kind of 10 been a hotbed for craft beer. And I think it's serving 11 the town well. 12 MR. LAMPE: I want to thank you for 13 asking us to come here today. I'm Chris Lampe, 14 President of the Brewers of Pennsylvania, as well as 15 co-owner of - of Weyerbacher Brewing Company in Easton, 16 Pennsylvania. 17 MR. SOFIO: I'm just tickled to be here. 18 Thank you for having me. I'm Mark Sofio, with Crowded 19 Castle Brewing Company, one of the new breweries here 20 in Phoenixville. And we're happy to be here and happy 21 to share our story and insights with you. 22 MR. LAMPE: So I'm going to start 23 without any further ado. As I said, I'm the President 24 of the Brewers of Pennsylvania, as well as part owner 25 of Weyerbacher Brewing Company. SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 9 1 Brewers of Pennsylvania is a nonprofit 2 organization which is comprised of and supports 3 Pennsylvania breweries which believe in the nobility of 4 brewing and hold dear the great traditions and history 5 of Pennsylvania brewing. 6 BOP members employ an estimated 10,000 7 employees, earning $296 million in wages and generating 8 $1.1 billion in direct economic benefits to communities 9 throughout the Commonwealth. 10 Despite these numbers, we believe the 11 Pennsylvania brewing industry can grow more further - 12 through further analysis of recent legislative changes 13 and further promotion of the brewing industry in the 14 Commonwealth. 15 The BOP has approximately 170 members 16 throughout the Commonwealth. And once again, thanks to 17 the House Liquor Committee for this opportunity to 18 testify today. 19 While Acts 39 and 166 did change the 20 legislative landscape in which we must operate, there 21 was a regulatory change in 2015 which created the 22 ability of breweries to operate taprooms at their 23 facilities. This was a groundbreaking event, which 24 allowed breweries to promote their own products at 25 their own facilities and gave breweries the opportunity SARGENT'S COURT REPORTING SERVICE, INC.