The House chose to shake up the wording on a bill that, if passed, would have allowed restaurant owners with a mixed beverage license to cut their food-to-alcohol sales ratios.
The House chose to shake up the wording on a bill that, if passed, would have allowed restaurant owners with a mixed beverage license to cut their food-to-alcohol sales ratios.
Voting 5-1 Tuesday evening, a House subcommittee chose to advance HB 219 to the floor with an amendment. Instead of reducing the state’s ratio laws, the sub-committee voted to substitute a pilot program that will be developed for restaurants to calculate their food and beverage ratios, report them to the ABC Board, then ABC will report the results of the program in 2018 to the General Assembly.
“This bill doesn’t deal with the ratios,” said Del. Scott Taylor (R, Virginia Beach) who proposed the original HB 219. “It deals with allowing relief and allowing a study over two years for volunteer restauranteurs to calculate their ratios based on wholesale pricing of food, alcoholic or nonalcoholic beverages.”
Taylor noted that the ratio law has become a wide spread problem across the Commonwealth that “hinders and hurts small businesses”, specifically mentioning sports and LGBT restaurants that aren’t your typical sit down restaurant, but aren’t a bar either.
With the amended bill, restauranteurs could calculate the ratios based on wholesale costs instead of retail costs.
“{For example,} we buy a bottle of Absolut from ABC, and I sell my drinks for $10 and you sell yours for $7, so I have to sell more food based on my price and you have to sell less food based on your price,” said Taylor. “This is simply to create fairness.”
Del. David Albo explained the GA created a similar two-year pilot program a few years ago involving about 20 or 30 business owners.
The program allowed mixed beverage licensees to determine food-to-alcohol ratios by volume rather than comparing the percentage of food sales to mixed beverage sales. Whether it’s cheap or expensive alcohol, restaurants had to sell the same amount of food for every gallon of alcohol.
“What they did was submitted their ratio reports based upon the new system and the regular system and they got to choose which one they wanted to use,” he said. “As it turned out it didn’t do much.”
Albo proposed creating a similar pilot program with this bill.
“People could voluntarily enter the program, they would submit their {ratio} reports based on wholesale and based on regular and we come back in two years to find out if it helps,” said Albo. “You measure the sales of alcohol based on wholesale and the sales of food based on wholesale. “That doesn’t do anything to put more alcohol on the street, it just allows people to calculate a different way.”
Albo introduced a similar bill, HB 171 which doesn’t reduce the ratio, but would include sale of nonalcoholic beverages in the food sales to lessen the burden on restaurant owners.
Restaurant owners and individuals that work in the industry came before the General Assembly Tuesday evening to persuade them to strike down the mixed beverage license law saying it is a burden on struggling bars and smaller businesses.
Kevin Clay, owner and Hospitality Consultant for Big Spoon Agency, spoke before the assembly. Clay is spearheading the “Fix the Mix” campaign, a non-partisan, independent, volunteer-led effort of restaurant owners pushing for reform of Virginia’s food rules for mixed beverage licensees.
He launched an online petition to garner support for the original bill.
“The message has been overwhelming clear from the restaurant community that it’s time to reform the mixed beverage statutes,” Clay said. “Changing this measurement as Del. Taylor proposes lets our small business owners pair their quality food with premium spirits and craft cocktails to keep Virginia on the map as a culinary destination.”
Clay brought up some pretty eye opening stats to the committee on the impact the state sees from violators of the ratio law.
Virginia ABC charged over 200 restaurants and assessed over $9.6 million in civil penalties for violations of the existing 45 percent rule from 2007 to 2014.
He mentioned Todd Howard, owner of Charlottesville staple EsCafe, was hit with a 30 day suspension of his mixed drink license and $2,500 fine for selling too much alcohol.
Cville Weekly has the full story here.
“As you know, the restaurant industry is known for tight margins both in food and labor costs and with 60 percent not making it through first year of business, that’s a lot of money here on the table that can be invested back in small businesses for job creation and improving the economies in our communities across the Commonwealth,” Clay said.
Some restauranteurs weren’t so crazy about the sudden amendment to the proposed legislation.
Mac McCormack who owns three restaurants in RVA, including McCormack’s Big Whisky Grill at Regency Mall, McCormack’s Whisky Grill in the Fan, and McCormack’s Irish Pub in Shockoe Bottom stood before the committee to voice his concerns.
“I’m here to support Del. Taylor’s rule, the original one anyway, I don’t know how the new one would actually fix the problem that I’m in.”
McCormack said one of his restaurants, McCormack’s Whisky Grill on Robinson, is currently facing a 30 day suspension of their license due to the ratio issue.
“I only missed my ratio by 3 percent,” he said.
Two of the restauranteur’s establishments specialize in high end spirits with their average drink price costing $24 and same for entrees, which creates a problem if someone wants to get a little buzzed at dinner.
“If anyone ever has two drinks in my restaurant, we’ve already violated the laws as they stand,” he said.
One of his restaurants has 2,300 different types of liquor. He mentioned one particularly popular shot going for $120 a pop.
“If you’re eating dinner at my restaurant and you choose to have that particular whiskey, I should have sold you the equivalent of five entrees to make up for that ratio,” he said.
A few organizations, such as the Downtown Business Group, were unsure if the new changes would be beneficial or not.
“You’ve got restaurants on both sides of it, but what needs to happen is a really thoughtful study on this,” said Myles Louria, a lobbyist from the Downtown Business Group. “Bringing people together, bring law enforcement, bring the various restaurants together and let’s get the information.” “We need more information with how we’ll move forward on this,” he said.
Other groups were completely opposed.
“This is a public safety issue for us,” said David Napier, President of the Shockoe Bottom Neighborhood Association. “I’ve been in the restaurant business for a long time, I’ve always been able to meet the ratio. I cannot support this.”
Bryan White of Historic Housing thinks reducing the ratio percentage would make it easier for establishments to operate as bars instead of restaurants.
“I think we can all agree the Commonwealth only licenses restaurants. There are a number of establishments in Virginia that are operating as bars and it is very difficult if we were to reduce the requirement to sell food we would be making it easier for restaurants to be licensed to sell mixed beverages who are not actually operating as restaurants.”
The pilot program would expire July 1, 2018 and the ABC Board would report results of the program Oct. 1, 2018.
Voter breakdown:
YEAS–Knight, Albo, Helsel, Robinson, Torian–5.
NAYS–Greason–1.
ABSTENTIONS–0.
NOT VOTING–Anderson–1.
Read more about another alcohol bill involving The National and The Norva here.
