Attorneys from the Saxton & Stump Liquor Licensing and Alcohol Group are actively guiding current and potential bar and restaurant owners as they navigate the nuances of new rules for the state-sanctioned auction of abandoned liquor licenses.
The next auction – scheduled for June 15 – will be the first-ever to include a game-changing modification approved by state lawmakers in late 2025: All licenses sold at auction can be moved to a business outside the county where they were abandoned. Previously, a liquor license sold at auction could only be used in the county where it was originally issued.
There are 10 restaurant (R) licenses available at the upcoming auction, according to the Pennsylvania Liquor Control Board. This is the 15th auction the state has conducted, and the first since October.
How the new rule affects you
There are some unique rules regarding moving the license. The most important thing is that, of those 10 available licenses, only two can be moved to the same county. Also, if more than two businesses want to move a license to the same county, preference will go to the highest bidders at auction. When they submit their bid, those who intend to move the license will be asked to list their top five counties to which they want to move the license.
The new law leaves bidders in a quandary about how much money would represent a winning – or at least competitive – bid on these movable licenses. The historical bidding data from the previous 14 auctions may be completely moot, since previous buyers competed only within the license’s designated county, but now they must compete against buyers across the entire state.
Another additional cost
In addition to the potential increase in the winning bid for each license, there is also an associated cost of moving the license. If the license bidder proposes to move it to a county the state designates as first through fourth class – any county with a population of 145,000 or more – it would cost an extra $50,000. Moving the licenses to fifth-to eighth-class counties – populations under 145,000 – would cost $25,000.
As a frame of reference, the only southcentral counties with fewer than 145,000 people are Adams and Lebanon.
The new regulation brings a wealth of questions that attorneys in the Saxton & Stump Liquor Licensing and Alcohol Group have studied and are currently advising clients on its subtleties. If you are considering bidding on the abandoned licenses at the June 15 auction or any future auction and have questions about what constitutes a competitive bid, please contact me or anyone in our group.
