Alcohol Businesses to be Included in COVID-19 Hospitality Industry Recovery Program if New Bill Passes

Breweries, distilleries, and wineries of Pennsylvania may soon receive some much-needed financial relief thanks to a new bill.

In March 2021, the Commonwealth of Pennsylvania created a statewide program called the

COVID-19 Hospitality Industry Recovery Program, or “CHIRP.” CHIRP allocates $145 million in funding assistance to the hospitality industry businesses adversely affected by the COVID-19 pandemic. Funding was provided to Pennsylvania counties in the form of block grants based on the county population.

However, while the CHIRP program allows many restaurants and bars that experienced

revenue losses from the pandemic to receive operating expenses, certain liquor industries were left ineligible for the funding by the program’s requirements. These requirements include:

• Being physically located in the county of application and in operation as of February 15, 2020.
• Having fewer than 300 full-time equivalent employees entity-wide as of February 15, 2020.
• Having a documented 25% reduction in gross receipts between 2019 and 2020 due to financial impact from COVID-19.
• Being a for-profit business and not a publicly traded entity.
• Having a maximum tangible net worth of not more than $15 million as of February 15, 2020.

A final requirement which caused ineligibility for many liquor-serving businesses is that the business must have a NAICS (North American Industry Classification System) designation within the Accommodation subsector (721) or Food Services and Drinking Places subsector (722) as its primary activity. These classifications do not apply to most local alcohol producers because they do not serve food or drink on the premises or provide accommodations required under the NAICS designation.

For this reason, breweries, micro-breweries, wineries, and distilleries that do not have a 721 or 722 NAICS were only able to apply for CHIRP funds if they provided onsite consumption and were only able to claim a 25% decline in gross receipts for onsite food and beverage consumption. These businesses were unable to include wholesale or other gorss receipts and expenses in their application, disqualifying many.

The new bill, introduced by state Rep. Bob Merski (D-Erie), amends the CHIRP requirements to include the NAICS classifications of breweries, wineries, and distilleries. In support of the bill, Rep. Merski stated, “Pennsylvania’s breweries, wineries, and distilleries play a vital role in the state’s economy, employing thousands and contributing billions annually in revenue. Like so many industries, however, they have not escaped the impact of the pandemic. Despite creative strategies to counter the loss of sales from bar and restaurant closures, many – especially those with limited distribution channels – have struggled.”