Monthly Archives: November 2012
We hear it all the time – and occasionally mutter it ourselves – why is it so darn hard to get a liquor license and follow all the cryptic laws? Why all the red tape, the crazy forms and the crazy rules?
A recent article in Washington Monthly reminds us of the method in the madness of liquor laws. After Prohibition, we as a Nation significantly controlled the distribution of alcohol to prevent us from regressing back to a state of copious and nearly constant intoxication. It was a bold social program that may have achieved its goal of moderating alcohol consumption.
The Tennessee ABC’s stepped up enforcement of the minimum food service requirement for bars is rocking the industry. Bar owners are howling about food service.
Instead of issuing fines, the ABC has been setting licenses for hearings seeking suspension or revocation of the liquor license. A bar without liquor for even a few days is usually fatal – meaning the owner looses everything.
In the past, the ABC issued fines to bars that failed to meet minimum food service requirements. It was considered a cost of doing business.
We have also heard that the ABC has declined to renew licenses for bars that have obvious food service problems, such as limited kitchen equipment, little food inventory on hand, or for those that tell the truth, and report less than 15% food sales on the food service affidavit.
Although the 15% figure for food sales sounds easy for bars to meet, the reality is that many bars are not going to be able to sell much food. For example, on Lower Broad in Nashville, no one hits the honky tonks for dinner. Folks dine out before they go dance the night away.
The limited service license was a bold step forward to help bars comply with the law, but the 15% minimum food service requirement does not reflect the realities of the marketplace for many responsible bar owners.
For nearly 20 years, Tennessee brewpubs have been selling growlers to patrons. Suddenly, the Tennessee ABC has announced that brewpubs and breweries can no longer ring up growler sales inside the restaurant.
The Tennessee ABC has always had a rule against selling bottles of beer – including growlers – to go from establishments holding ABC liquor-by-the-drink licenses. Nearly two decades ago, brewpubs devised what was apparently an acceptable way to sell growlers. Customers purchased growlers at the bar, the growlers were filled at the bar and delivered to customers at the front door. This has been the practice for nearly two decades.
Recently, Smokey Mountain Brewery was told by ABC agents that selling growlers inside the brewpub was a violation of state law. We do not know if citations were issued, but ABC staff attorney Ginna Winfree has made it clear to us that growlers sales are forbidden inside the restaurant.
The age-old rules are no longer kosher.
The Tennessee ABC’s stepped enforcement of food service requirements has led to claims that the ABC caused a high-profile casualty in Knoxville. The website for Knoxville venue the Valarium and CiderHouse has announced their closing due to “new rule changes from the TN Alcoholic Beverage Commission concerning minimum percentage [food sales].”
The club also claimed they could not meet the “minimum number of days they require us to be open per week.”
The club says that: “since we cannot meet their requirements, we will relinquish and not renew our ABC license when it expires November 24th, 2012.”
Although we are very familiar with the Tennessee ABC’s recent increase in enforcement of food service requirements at bars, we are skeptical about the claims of Valarium and CiderHouse. We do not see a successful venue closing without trying to meet the requirements.
We have nightclub clients that have struggled with the 15% minimum food service requirement for years, but most have found ways to meet it and none have thrown in the towel without trying different strategies to make it work.
The ABC has been very flexible about accepting club marketing strategies to increase food sales percentages. There are lots of ways for bars to try to comply with the 15% food service rule.
The new ABC policy is going to wreak havoc among bar owners, but we don’t think it will force folks out of business right away.