Last Call

Tennessee Liquor Stores Given Free Booze for Tastings

By - August 17, 2014 | Alcoholic Beverage Law | Email Will Cheek

The Tennessee Wine in Grocery Stores law was a game changer on many levels.  One obscure victory for retail liquor stores is the ability for distilleries and importers to donate product for tastings at retail liquor stores.

Tennessee liquor stores earned the right to conduct tastings in 2011.  We blogged about the new law here.

The Tennessee ABC cracked down on free liquor beginning on July 1, 2014.  Only nonprofits and liquor stores tastings can receive free liquor under Tennessee law.

The crackdown on free liquor was a big change for the Tennessee liquor industry.  Reminds us of a classic Beastie Boy tune about rebellion:

Yo ho ho and a pint of Brass Monkey
And when my girlie shakes her hips she sure gets funky
Skirt chasin’, free basin’, killin’ every village
We drink and rob and rhyme and pillage

 

Retail liquor stores scored a number of huge victories in the WIGS battle and we commend their lobbyist David McMahan for making the best out of WIGS. Grocers cannot conduct tastings, much less receive free product for doing so.

What Can I Sell at My Tennessee Retail Liquor Store?

By - August 10, 2014 | Alcoholic Beverage Law | Email Will Cheek

The Tennessee Wine in Grocery Store law, which we affectionately call WIGS, allows Tennessee liquor stores to sell a list of very specific items.  We understand that this list was the result of complicated and contentious negotiations.

We find it most interesting that before the specific list is a lawyerly phrase that gives enormous flexibility about what a retail liquor store can sell:  “Such items may include but are not limited to.”

Hank Williams’ classic “All My Rowdy Friends” comes to mind for no apparent reason:

And the hangovers hurt more than they used to
And corn bread and iced tea took the place of pills and 90-proof
And it seems like none of us do things quite like we used to do
And nobody wants to get high on the town
And all my rowdy friends have settled down

 

The list of items approved for sale at Tennessee retail liquor stores is quite specific.

Printed or video material related to alcoholic beverages or food
Utensils and supplies related to alcohol, including corkscrews, strainers, pourers, flasks, wine racks, etc.
Gift cards, packages and baskets
Nonalcoholic beverages, such as water, soft drinks, red bull, mixers, etc.
Kegs and growlers of beer, wine and possibly liquor (be aware of TTB restrictions and licensing requirements for liquor and wine)
Beer and wine-making kits and related products and supplies
Lemons, limes, cherries, olives, etc.
Peanuts, pretzels, chips, cheese, crackers and other snack foods
Coolers, ice chests and ice
Party supplies, decorations, bags, greeting cards, etc.
Articles of clothing and accessories related to alcoholic beverages
Combined packages of multiple alcoholic beverages
Cigarettes, cigars, lighters, etc.
Lottery tickets

 

Gas, for example, was excluded from the list, presumably by convenience stores.  Bread, milk and other food staples was excluded for grocery stores.

From a legal perspective, saying “include but are not limited to” suggests that the list should be read broadly.

For example, WIGS allows the sale of tobacco products.  Can a liquor store also sell e-cigarettes and other vaping devices?

Does “Peanuts, pretzels, chips, cheese, crackers and other snack foods” include stuffed olives, pate, humus, smoked sausages and cocktail shrimp?

Does party supplies include rented chairs, tables and tablecloths?

Given the Tennessee ABC’s strict construction of liquor laws and large monetary fines for alleged violations, retail liquor store owners have good reason to worry that deviating from the specific list is fraught with danger.

The compromises that lead to the passage of WIGS includes new opportunities for retail liquor stores.  It will be interesting to see how broad the Tennessee ABC will construe these privileges and how profitable the new lines of business will be for stores.

Where Is My Wine in Tennessee Grocery Stores?

By - August 06, 2014 | Alcoholic Beverage Law | Email Will Cheek

Tennessee’s Wine in Grocery Stores law, which we affectionately call WIGS, is deep into its next test.  Will enough local voters sign petitions to place the local option election authorizing WIGS in your city or county on the ballot for approval?

Whilst Tennessee wallows in the WIGS battle, we hear Pink Floyd singing:

Tired of lying in the sunshine staying home to watch the rain
You are young and life is long and there is time to kill today
And then one day you find ten years have got behind you
No one told you when to run, you missed the starting gun 

 

WIGS legalized wine in food stores.  But each city or county must have a local option election to authorize the sale of wine in food stores.  To place the local option on the ballot requires the signatures of 10 percent of the residents that voted in the last gubernatorial election.

Petitions must be completed and shared with the local election commissions by August 21 to be on the ballot for November 4th elections.

Although WIGS is hugely popular, the local option requirements pose a problem for some cities.

Confusion about WIGS complicates the local option process.  In Memphis, the Memphis Business Journal declared victory for wine, although WIGS insiders know Memphis is far short.  On average, about half of the signatures on wine petitions are from folks that do not vote in the city where they sign the petition, or are not registered voters.

The failure of Memphis to approve WIGS could be a huge setback for Memphis food stores that compete with grocers in Germantown, Bartlett and other suburbs.  Memphis is about half way to having enough petitioners to place WIGS on the ballot.

In addition, we have real concerns that Memphis voters may not approve WIGS at a popular election.

Other Tennessee cites are more promising for WIGS.  According to reliable sources, the following have enough signatures to place WIGS on the November 4 ballot:

 Alcoa
Brentwood
Bristol
Church Hill
Clarksville
Clinton
Dunlap
Dyersburg
Fairview
Farragut
Gallatin
Gatlinburg
Greeneville
Harriman
Hendersonville
Jonesborough
Kingsport
Kingston
Unincorporated Knox County
Knoxville
Lebanon
Lenoir City
Loudon
Maryville
Morristown
Mount Juliet
Murfreesboro
Newport
Oak Ridge
Oakland
Paris
Pleasant View
Rogersville
Sevierville
Smyrna
Spring Hill
Thompson’s Station
 

We understand that WIGS is close to having enough signatures to be on the ballot in Nashville, Brentwood, Franklin and Hendersonville.  Same with Chattanooga.

But the August 21 petition deadline is just days away.  Wine in Tennessee grocery stores is at a critical crossroad in many cities.  Although WIGS is largely about convenience to customers, the failure of a city to approve WIGS will be a huge blow to grocers trying to compete against grocers in neighboring cities.

Here Is a Quick Fix for the Sales to Minor Problem in Tennessee Restaurants, Bars and Clubs

By - July 30, 2014 | Alcoholic Beverage Law | Email Will Cheek

Ask any restaurant, bar or club owner in Tennessee about recent stings for sales to minors.  With tough consequences, sales to minors is near the top of the worry list.

Cheap Trick’s classic tune Dream Police seems fitting:

The dream police
They live inside of my head
The dream police
They come to me in my bed
The dream police
They’re coming to arrest me
Oh no
 

Based on what we know, the stings involve undercover informants that produce driver’s licenses which clearly show the informant is under 21.  Problem is, servers and bouncers misread IDs and the informants order alcohol.

A second sale to minor in two years typically leads to two separate 14 or 15 day suspensions – one for liquor and one for beer.

Tennessee’s law about under 21 driver’s licenses is a big part of the problem.  Although underage drivers licenses are clearly marked as under 21, the licenses are valid for as long as three years after the person turns 21.

Instead of creating the impression that the person is too young to drink, servers are required to do math to determine if the person really is under 21.

The solution is easy.  Tennessee driver’s licenses should expire shortly after someone turns 21.  That way, almost no one with an under 21 license will be of age.

Other states have tackled this problem and we think Tennessee should change its laws to simplify carding.  Here are the laws in a few other

states:

Arizona – Under 21 licenses not valid for alcohol sales 30 days after the 21st birthday.

Colorado – Under 21 licenses expire 20 days after the 21st birthday.

Idaho – Under 21 licensees expire 5 days past 21st birthday.

Kansas – Minor license expires on 21st Birthday.

Kentucky – Under 21 licensees expire 90 days past 21st birthday.

Michigan – Under 21 licenses expire on the 21st birthday.

Minnesota –  Under 21 licenses expire on the 21st birthday.

Montana – Under 21 licenses expire on the 21st birthday.

Nebraska – Under 21 licenses expire on the 21st birthday.

New Hampshire – Under 21 licenses expire on the 21st birthday.

Ohio – Under 21 licenses expire on the 21st birthday.

South Dakota – Under 21 licenses expire 30 days after the 21st birthday.

West Virginia – Under 21 licenses expire 30 days after the 21st birthday.

Wyoming – Under 21 licenses expire on the 21st birthday.

We are encouraging the Tennessee Hospitality and Tourism Association to back legislation to make 21 year olds get new driver’s licenses at or closely after their 21st birthday.

If under 21 IDs expire at or close to the 21st birthday, servers can presume that the person is underage.  This significantly reduces the chances of math errors.

If legislation is introduced next winter, we will call on our loyal readers to contact legislators to get the law passed.  Stay tuned.

Tennessee ABC Defers Decision on New Payment Rule for Restaurants and Bars

By - July 22, 2014 | Alcoholic Beverage Law | Email Will Cheek

The death of the 10 day payment law for liquor purchases by restaurants and bars in Tennessee officially has an afterlife.  Zombie or Angel, the issue was on today’s July 22, 2014 agenda of the Tennessee Alcoholic Beverage Commission.

During the eleventh hour of the 2014 legislative session, the long-standing 10 day credit rule was eliminated for on-premise liquor license holders.  We blogged about it here.

Elimination of the 10 day credit rule came as a surprise to the restaurant and hotel industry.  Conjures up the Gap Band’s classic 1982 hit:

You dropped a bomb on me, baby 
You dropped a bomb on me
 

The change has led to a host of problems for on-premise liquor license holders.  Fortunately, the ABC issued informal rules at the April 2014 meeting.  But there are issues with the informal rules.

We raised a few of the issues at today’s ABC meeting, and were joined by legal counsel to the Tennessee hospitality association and legal counsel to the wholesalers’ association.

Unfortunately, Commissioner Jones could not attend the meeting.  The issues were deferred until the August meeting on August 26, 2014 at 1:30 pm CDT.

Stay tuned as we cover this important issue.

Are Tennessee Liquor Stores in for a Bad Romance with Beer, Cheese & Corkscrews?

By - July 17, 2014 | Alcoholic Beverage Law | Email Will Cheek

Beginning July 1, 2014, Tennessee liquor stores can sell beer, cheese, corkscrews and many other items.  Before passage of wine in grocery stores, which we affectionately call WIGS, liquor stores could only sell wine, spirits, lottery tickets and cash checks.

Lady Gaga gets the dilemma

I want your love and
All your lover’s revenge.
You and me could
Write a bad romance.

Liquor store owners are not going to get rich from selling low-profit items like Budweiser and Fritos.  We see the right to sell additional items as more about marketing and retaining traffic flow in stores than making up for lost profits from losing Yellow Tail sales to WIGS.

This month’s Tennessee ABC agenda has a handful of retail liquor store owners seeking approval to consolidate beer and liquor store operations.  The ABC must approve expansion of a liquor store premises if the owner wants to include an adjacent beer store or other expansion space.

Embracing WIGS is an enormous challenge for Tennessee retail liquor stores.  We wish owners well as they embrace previously-forbidden merchandise and prepare to compete against the goliath grocery stores.

Adding fuel to the fire is strong consumer demand for wine to be legalized in groceries sooner, like July 1, 2015.

Why the New Wine in Grocery Law Leaves Gas Stations and Convenience Stores High and Dry in Tennessee?

By - July 15, 2014 | Alcoholic Beverage Law | Email Will Cheek

Most folks knew that pharmacies like Walgreens and CVS were left out in the cold under Tennessee’s Wine in Grocery Store law, which we affectionately call WIGS.  The 20% food requirement dashed the hopes for wine in Walgreens.

Problem is, the 20% food requirement may also prevent almost all convenience stores from selling wine.

Somehow, the undecipherable lyrics to Mac Arthur Park come to mind:

Someone left the cake out in the rain
I don’t think that I can take it
Cause it took so long to bake it
And I’ll never have that recipe again
Oh, nooo!

 

Convenience stores benefit from the exclusion of gas sales.  Gas has a separate tax that does not count as taxable sales under the WIGS law.

But the definition of food sales leaves convenience stores high and dry for wine.  Food is defined as items that are taxed at the lower food tax rate, like flour, sugar, bread and other grocery items used to prepare food.  Ready to eat food items – think hot dogs, chips and other snack foods, and Coke and Red Bull, are excluded from the definition of food for purposes of the 20% food requirement.

We expect many businesses, including convenience stores, to ask the Tennessee Legislature to tweak WIGS to treat everyone fairly.  WIGS was an ugly truce reached at the height of a bloody battle.  When the dust settles, we see WIGS being tweaked to take care of many folks that were excluded from WIGS.

Stay tuned.

Memphis to Benefit from Tennessee Distillery Law

By - July 11, 2014 | Alcoholic Beverage Law | Email Will Cheek

D. Canale & Co. announced plans to resurrect the classic Memphis whiskey brand “Old Dominick.”  The distillery and tasting room will be at 301 South Front Street, across from Gus’s World Famous Fried Chicken.

The distillery was named for the company’s founder, Dominick Canale, great-great grandfather of Chris Canale, president of D. Canale & Co.  “We are so eager to be back in business in the city our family has called home for over 150 years,” Canale said.  Read more at The Memphis Business Journal.

Distilleries have been opening across Tennessee following recent changes in state law.  From what we know, Old Dominick is the first for Memphis.

The classic 1964 Roger Miller hit comes to mind:

Chug-a-lug Chug-a-lug
Make u wanna holla hidy hoe,
Burns your tummy don’t you know
Chug-a-lug chug-a-lug
 

Cutting Edge Craft Cocktails Test Boundaries of Liquor Laws in Tennessee and Other States

By - July 08, 2014 | Alcoholic Beverage Law | Email Will Cheek

A fabulous panel of mixologists that are upping the ante for cocktails were featured at this year’s 2014 National Conference of State Liquor Administrators “NCSLA” conference. But the creative concoctions are pushing the boundaries of many state laws, including Tennessee.

The art of the craft cocktail was largely lost during Prohibition, when tipplers turned to substandard illegal spirits for a quick buzz at illicit speakeasys.

Recently, fashionable barkeeps have revived the lost art of the cocktail.  From Alchemy in Memphis, The Patterson House in Nashville, Easy Bistro & Bar in Chattanooga to Peter Kern Library in Knoxville, craft mixology is cool.

Warren Zevon captures the moment in one of our favorites, Werewolves of London:

I saw a werewolf drinking a pina colada at Trader Vic’s
His hair was perfect
Aaahoo! Werewolves of London
Draw blood
Aaahoo! Werewolves of London
 

One hot trend is barrel aging cocktails – mixing large batches of drinks and aging them for 4 to 6 weeks in a used oak whiskey barrel.  Avoiding fruit or other ingredients that are health issues, barkeeps age craft cocktails like Manhattans or bacon old fashioneds.

Barrel aging improves consistency and is much faster to serve than scratch made cocktails.  Cocktail enthusiasts say that barrel-aged cocktails are more flavorful, better-blended and delicious.

In Tennessee, for example, barrel-aging cocktails probably runs afoul of Tennessee’s recent efforts to restrict infusions.  See Section 9 of the attached new Tennessee law on infusing.  Although a bit ambiguous, we read the law as restricting infusing to 240 hours, which is a clever way of saying you must sell all infused product within 10 days.  Not long enough for barrel aging.

Hot tea drinks are also in vogue.  Bar flies enjoy the vapors and tastes of bourbon, berry and tea.

Punch cocktails are being elevated from the frat house to fashionable canteens.  One Manhattan watering hole features 10 craft punch mixtures in drink machines on Wednesdays, and then serves the concoctions for the rest of the week, until it is gone.  As long as the mixture is moving in the drink machines, the NYC health department says no bacteria can grow.  Punch is delivered to tables in a punch bowl, allowing for speedy service and well-blended flavors for a group cocktail.

In Tennessee, we hear from reliable sources that the ABC has been gathering information about bitters at several high-end cocktail purveyors.  Bitters is defined as “a liquid, often an alcoholic liquor, in which bitter herbs or roots have steeped, used as a flavoring, especially in mixed drinks, or as a tonic.” 

House-made bitters are a key component for most craft cocktail enthusiasts.  From what we know, house-made bitters present thorny issues under both federal and Tennessee laws.  Stay tuned for more information.

Puff Yourself to Death: Are Electronic Cigarettes and Other Nicotine Vaporizers Legal in Tennessee Restaurants and Bars?

By - June 30, 2014 | Alcoholic Beverage Law | Email Will Cheek

E-cigarettes have ignited a controversy among state and federal regulators. Willie Nelson sums it up:

Smoke smoke smoke that cigarette
Puff puff puff
And if you smoke yourself to death
Tell St Peter at the Golden Gate
That you hate to make him wait
But you just gotta have another cigarette

We did a little research on the issue and, as of now, it is legal to have an e-smoke at a bar or restaurant in Tennessee.  A call to the local health department confirms that e-smoking is legit.  The U.S. Food & Drug Administration is looking into rules for vaping, but as of now, e-cigarettes are legal.

A business can voluntarily ban vaping.  There is no law that prevents restaurants and bars from prohibiting e-smoking.  For example, Vanderbilt recently added e-cigarettes to its smoking policy.

The Federal Airline Administration has banned e-cigarettes, not because of health concerns, but because there is insufficient information about possible interference with aircraft navigation.  E-cigarettes are electronic devices.

Interestingly, Sumner and Rutherford county jails have approved of e-cigarettes, presumably because of the revenue stream.

Stay tuned for more on this emerging legal issue.  Thanks to intern and recent Vanderbilt grad Jaziree Smith for her research on vaping.