Beer distributors cry foul over ruling on ads
By Kim Leonard

TRIBUNE-REVIEW
Friday, August 26, 2005

While the state Liquor Control Board is using mass-mailed
advertisements to promote wine, whiskey and other wares in its new
supermarket locations, local, licensed beer distributors no longer have
that option -- and many are wondering why.

"It's a hardship -- it's one less place where we can advertise," said
George Duffy, of Duffy's Pop & Beer for Less in McKees Rocks. His
business stopped placing ads in the weekly Pennysaver, a shopper
publication, because the LCB declared it off-limits in recent legal
opinions that were based partly on the state Liquor Code.

The issue is this: The Pennysaver was deemed a circular or mailing, as
opposed to a newspaper, in a May 9 opinion by LCB chief counsel Faith
S. Diehl that cited definitions in Webster's dictionary. And beer
distributors are prohibited under the state Liquor Code from sending
out price lists, circulars or handbills by mail to the general public.

Other recent LCB legal opinions contain similar messages. Duffy said
the restriction is especially tough for small beer distributors because
while they could legally advertise their prices in newspapers, they
can't afford the higher rates.

"It's hard to get the word out, if nobody can take your ad," he said.

Bill Weaver, general manager for the Pennysaver, said he knows of about
a half-dozen distributors who received warnings over the past year that
they could lose their licenses if they continued to advertise. He said
the Pennysaver has asked the LCB to reconsider, to no avail.

About 780,000 copies of the Pennysaver are distributed by mail each
week, in 83 targeted editions. The all-advertising publication is owned
by Westminster Holdings Inc., which is a sister company of the
Tribune-Review Publishing Co.

Unlike the beer distributors, the LCB can advertise liquor prices
through circulars by mail, spokeswoman Molly McGowan said.

In fact, the One Stop Shops that sell wines and liquor inside 11
supermarkets have been advertising by mail through a cooperative
venture with the grocery store chains. McGowan said she doesn't believe
the agency pays for advertising space in the circulars.

In Western Pennsylvania, the LCB has stores at the Giant Eagles in
Seven Fields and Ohio Township, and at a Shop 'n Save in South Fayette.
Leases are pending for space at seven more supermarkets statewide.

A Giant Eagle circular keyed for delivery on Sept. 1, for example,
contains a "Celebrate in Style" section picturing bottles of Jack
Daniels Old No. 7 Tennessee Whiskey, Smoking Loon and Twin Fin
California wines and other products. Prices are listed in large red
type.

Advo Inc. will distribute the circular by mail to about 600,000 homes
in the Pittsburgh area, Giant Eagle spokesman Dick Roberts said.
Representatives of Shop 'n Save couldn't be reached for comment about
whether that chain will put LCB ads in its circulars.

The state police Bureau of Liquor Control Enforcement has issued
warnings related to the advertising restrictions, but Officer Joseph
Baran of the Pittsburgh office said he didn't know how many. He didn't
know of any license revocations or fines related to advertising in a
shopper.

"It's not a major infraction," Baran said.

And while the U.S. Postal Service prohibits sending alcoholic beverages
through the mail, advertisements for them can be mailed as long as the
ads are truthful, spokesman Tad Kelley said.

Weaver said as many as a dozen beer distributors' ads may have run in
the past in a typical pre-holiday edition of the Pennysaver. The
upcoming holidays, and the new state law allowing Sunday hours for
distributorships, make it essential that distributors "get their word
out," he said.

McGowan said the state Legislature would have to make any changes to
the distributors' advertising rules, because they involve the state
code.

Mary Lou Hogan, executive secretary and counsel for the Malt Beverage
Distributors Association of Pennsylvania, said the restriction "should
be reviewed, at the very least, to see if it makes sense for the way
that beer and alcohol is marketed today."

"I hope the beer distributors band together and go after them on this,"
Weaver said of the LCB. "This sounds like restraint of trade."