Pennsylvania’s liquor board drove up prices on Stateside’s canned cocktails

Pennsylvania’s system for selling liquor is driving up the price of some of the state’s most popular canned cocktails, according to reporting by NewsWorks Lab, as the Pennsylvania Liquor Control Board uses its power as both regulator and retailer to control how those products are sold.

The dispute centers on Philadelphia-based Stateside Vodka and its fast-growing ready-to-drink brands, especially Super Lyte, a vodka-based canned cocktail that launched this spring and quickly became one of the hottest alcohol products in the country. NewsWorks Lab reported that after the liquor board asserted broader control over Stateside’s products in June, Pennsylvanians began paying more for some of those drinks than they did before.

The episode has drawn attention to a long-standing feature of Pennsylvania’s alcohol system. The PLCB not only regulates licenses and oversees large parts of the state’s liquor market, but also runs roughly 560 state liquor stores, 13 licensee fulfillment centers, and two major distribution centers in Pittsburgh and Philadelphia. That gives the agency unusual influence over what products enter the market, how they are packaged, and what consumers ultimately pay.

The issue became more visible after lawmakers passed Act 86 in July 2024. That law allowed beer distributors, grocery stores, convenience stores, and hotels to sell spirits-based ready-to-drink cocktails. It also allowed manufacturers such as Stateside to sell directly to those retailers. But the law preserved the PLCB’s authority to buy and sell those same products, leaving the board in direct competition with businesses it also licenses and regulates.

For the beverage industry, that structure can shape pricing, margins, and market access well beyond a single brand. If the state sets the floor price on popular ready-to-drink cocktails while also competing to sell them, private distributors and retailers can face tighter profits and less flexibility in how they stock and price fast-moving products.

Stateside told NewsWorks Lab that the company faces pressure on several fronts at once because of that arrangement. A company representative said the board is “our regulator, they are our customer and they are our competitor.”

PLCB spokesperson Shawn Kelly defended the agency’s role, saying it operates under powers set by state law and serves as a major source of public revenue. Kelly said the agency generates about $750 million a year in taxes and profits for Pennsylvania’s general fund and provides $3 million in annual grants to support the state’s wine, beer, and spirits industries.

Kelly also disputed the idea that the board was unprepared for canned cocktails. He said the category has been growing for more than five years and that the agency began adapting to canned beverages when canned wine gained traction in 2016. He said the Legislature intended the PLCB to remain the main wholesaler of ready-to-drink cocktails, with direct manufacturer sales to licensed retailers serving as an additional option, not the primary system.

The conflict intensified after the rapid rise of Super Lyte. Stateside launched the noncarbonated drink with 0 sugar, 90 calories, and 4.5% alcohol by volume. At an industry event in California in April, co-founder Clement Pappas predicted it would become the biggest ready-to-drink launch in the category’s history. NewsWorks Lab reported that the brand then sold 1 million cases in 142 days, surpassing the previous record, and Stateside President Matt Quigley projected last month that it could reach 4 million cases by the end of the year.

That surge in demand collided with Pennsylvania’s state-run system. According to NewsWorks Lab, the PLCB first contacted Stateside in March to say it wanted to sell Super Lyte. Stateside said it could not immediately fill the order because it had already presold 300,000 cases and did not expect to have added production capacity until the fall. The company also said the board wanted product packaged in shrink-wrapped 24-can cases, a format Stateside did not typically use for Super Lyte and had not built into its packaging plans.

Stateside told the board it could not meet that order on the timetable requested but offered a later timeline. Then, according to the company, communication went quiet until June 3, when PLCB Executive Director Rodrigo Diaz sent a sharply worded letter to Pappas. In that letter, Diaz wrote that the board wanted to buy all ready-to-drink cocktail varieties sold by Stateside “in all configurations,” unless the agency said otherwise.

That demand had broad implications because Pennsylvania law allows the PLCB to set the benchmark price for products it lists. Once the board lists an item, private sellers cannot offer it below the PLCB price. In the letter, Diaz wrote that although a licensed Pennsylvania manufacturer may sell ready-to-drink cocktails directly to the public and to licensees, those sales may not be made below the board’s price for the same item.

The effect reached a wide network of sellers. NewsWorks Lab reported that the board’s position affected about 2,400 grocery stores, convenience stores, beer distributors, restaurants, and hotels, along with hundreds of bars and nightclubs.

Before the board listed all of Stateside’s products, private distributors had more room to buy in bulk at lower prices. Shawn David, co-owner of Beaver County Beverage in Monaca, told NewsWorks Lab that before Super Lyte was listed by the PLCB, pallet purchases from Stateside could bring the price down to as little as $47.99 per case. After the board listed the product, David said, he had to drive about 30 miles to the PLCB’s Licensee Service Center in Bridgeville and pay the state-mandated wholesale price of $53.99 per case.

Because distributors must buy the products from the PLCB at a wholesale price only 10% below the state retail price, retailers say their profit margin has narrowed sharply. David said consumers are paying more while private sellers are making very little.

The dispute also exposed how product formats became part of the pricing battle. NewsWorks Lab reported that Stateside had sold certain package sizes directly to private retailers that were not listed in the state system. For example, Fine Wine & Good Spirits stores initially carried four-packs of Surfside, Stateside’s vodka iced tea and lemonade brand. Stateside later offered six-packs and 12-packs with different UPCs that were not in the state system, allowing those packages to be sold to private retailers at lower prices. Similar differences existed with eight-packs and 12-packs.

Once the PLCB decided it wanted every variety of Stateside’s ready-to-drink cocktails in every package configuration, that flexibility largely disappeared. Kelly said the board considered expanding its selection because customers wanted more products and package sizes and because Stateside was growing more popular. He said the agency’s contracted logistics companies rented equipment to shrink-wrap trays of canned cocktails so they could be handled more easily at state distribution centers.

NewsWorks Lab reported that the board acquired shrink-wrapping capability through its contractors and negotiated a fee of $1 per case that Stateside paid. Kelly said the PLCB maintains standard labeling, packaging, and delivery requirements for all suppliers to ensure products can be safely received, stored, and transported, and that suppliers who do not meet those standards pay fees to bring products into compliance.

Lawyers and trade groups told NewsWorks Lab that the core problem is structural. Shauna Boscaccy, a Harrisburg attorney who specializes in liquor law and serves as executive director of the Pennsylvania Beer and Beverage Wholesalers Association, said the board historically focused on wine and spirits and was not built around high-volume canned products. Kelly rejected that characterization, but the clash has still raised new questions about how well the old system fits a fast-growing ready-to-drink market.

Charlie Caputo, general counsel for the Malt Beverage Distributors Association of Pennsylvania, said beer distributors are caught in the middle when a conflict arises between Stateside and the PLCB. Kelly, asked whether the board’s overlapping duties create a conflict of interest, said that is a matter for lawmakers because the agency’s role is defined by statute.

The roots of the system go back nearly a century. Pennsylvania created the PLCB in November 1933, just before federal Prohibition ended. Historians say the system was designed to keep tight state control over alcohol sales, distribution, and price. Char Miller, a historian at Pomona College who has written about Gov. Gifford Pinchot and Progressive Era regulation, told NewsWorks Lab that the board has held tightly to its authority over ready-to-drink cocktails because it does not want to give up its effective monopoly.

Nearly 92 years later, that legacy is now colliding with one of the fastest-growing segments of the alcohol business. Ready-to-drink cocktails have blurred the old lines that kept wine and spirits in state stores and beer in separate distribution channels. In Pennsylvania, the rise of canned cocktails has exposed how a regulator with the power to license competitors, buy their products, set minimum prices, and sell directly to consumers can shape the market at every level.