On July 17, 2024, Pennsylvania Governor Josh Shapiro signed SB 688 into law, expanding the number of available outlets that can sell ready-to-drink cocktails (RTDs) across the state.
The new law defines “Ready-to-drink cocktails” as “beverage[s], composed in part of distilled liquor … premixed and packaged in original containers by the manufacturer, containing not more than sixteen ounces … The term shall include any beverage consisting of at least one-half of one per centum, but not greater than twelve and one-half per centum, alcohol by volume.” Notably, this term does not encompass beer, malt or wine-based RTD beverages.
Explaining the intent behind the bill, sponsor Senator Mike Regan, in a February 17, 2023, memo, cited the recent growth and overall popularity of the RTD category as the reason why RTD beverages deserve to be treated differently from other liquor-based products.
Prior to the new law, liquor-based RTDs could only be sold through state-run stores, where they compete for limited shelf and cooler space that is not commensurate with their market share. Spirits and all products containing spirits had to be sold by in-state manufacturers and out-of-state vendors to the Pennsylvania Liquor Control Board. The board would then sell to liquor-licensed retailers, such as restaurants and bars, and to its state liquor stores. As a result, consumers would have to purchase RTDs in the same manner they would purchase higher ABV spirit products at a state-run store.
With SB 688’s enactment, Pennsylvania now allows for these spirits-based RTDs to be sold either through the board state-store system or through the state’s independently licensed beer network with the acquisition of an additional permit. Notably for manufacturers – both in-state and out-of-state – Pennsylvania’s franchise laws that cover Pennsylvania beer distribution do not extend to RTDs.
Before buying RTDs for resale, retailers and distributors will need to acquire a new type of permit called a “Ready-to-Drink Cocktail Permit.” Retailers will be able to purchase RTDs from state-run stores (as they do currently), in-state limited distilleries, and distributors and importing distributors.
