The last couple of years have brought about lots of change for many business owners, not the least of which being owners in the hospitality industry. While this cycle of change has regrettably caused some to close their doors, leaving the industry altogether, we have also seen an unprecedented number of new business entrepreneurs curious about the various options to sell alcohol in Pennsylvania as a manufacturer, retailer or distributor. To even consider entry into this heavily regulated and competitive landscape, prospective entrepreneurs need a working knowledge of the available options, and a sense of the costs and challenges associated with each.

 What Is the 'Quota System'

Certain classes of liquor license are bought and sold subject to what is known as the "quota system." The quota system restricts these classes 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 the population. Generally speaking, this number is one license per every 3000 inhabitants, but it can vary by license. Since most Pennsylvania counties already have more retail liquor licenses than the quota currently allows, a new business owner seeking to acquire an "R" license, would need to purchase that license from an existing license owner in the desired county.