Sales to minors is the number one issue facing Tennessee restaurants, bars and venues. The Tennessee ABC has stepped up compliance checks. Despite best efforts, even seasoned servers and bartenders are failing.
Dedicated owners are serving suspensions of their liquor and beer permits. State law now requires that beer boards and the ABC notify each other of suspensions, generally leading to two suspensions for the same sale to minor. The ABC now imposes a 14 day suspension for a second sale to minor in 3 years.
Veteran servers and bartenders are being criminally charged for selling to minors. If convicted, the server or bartender cannot work in the industry in Tennessee for 8 years.
The consequences for failing a compliance check are serious for the business and the employee.
We looked into some possible changes for Tennessee drivers licenses and were taught an excellent lesson. We thank Senator Bill Ketron and Micki Yearwood, Senior Legislative Advisor, for help on this issue.
You don’t have to look at the person’s date of birth and calculate if the person is over 21.
Each under 21 ID has a red box around the photo. On the right hand side of the red box is the date that the person turns 21. It is not as easy to read, but reading the date in the red box requires no math. If you know today’s date, you can instantly tell if the person is old enough to purchase alcohol.
Not sure why, but a Tom Wait 1975 classic comes to mind:
warm beer and cold women, I just don’t fit in
every joint I stumbled into tonight
that’s just how it’s been
all these double knit strangers with
gin and vermouth and recycled stories
in the naugahyde booths
We have recently met with top ABC agents and the ABC Director about ABC compliance checks. Based on our experience, the ABC uses informants that are actually under 21 and present an ID that clearly shows the informant is under 21. No funny business. These are clean stings where servers just make mistakes.
We encourage all Tennessee industry members to rethink how they card. You do not need folks to know the born on date. No math is needed. Jut look at the date on the right side of the red box around the photo.
Liquor laws in Tennessee are complicated and even we sometimes get things wrong. We thank Keith Bell, the Director of the Tennessee ABC, for corrected this post about complementary wine
Everyone in the restaurant and bar business knows you must have a liquor license to sell wine and spirits. It’s a crime to sell liquor without a license.
Outside the hospitality industry, a surprising number of businesses think nothing of “giving” away a glass of wine at a spa, hair stylist or nail shop. Of course, you only get that free wine if you purchase something. I can’t walk in off the street and expect a glass of wine for free.
Until recently, these folks were selling liquor without a license. Committing a crime.
The Beastie Boys’ debut album sums it up:
Most illingest be-boy, I got that feeling
‘Cause I am most ill and I’m rhymin’ and stealin’
Unbeknownst to us, the law was changed to specifically allow the service of complimentary beer, wine and spirits to customers at a business licensed as a cosmetologist. Here is the Cosmetology alcohol serve law. The law specifically allows hair dressers and other licensed cosmetologists as follows: “wine, beer, liquor or alcoholic beverages may be served to a patron without a charge, but no such beverages shall be served to a patron who is intoxicated or believed to be intoxicated;”
Although cosmetologists can serve complimentary liquor, other businesses do not have the same authorization. We believe that another popular practice is probably illegal. There is nothing wrong with inviting some friends over to your house and giving them some free booze. Doing the same at your business, however, raises questions.
Giving away wine at a store or other business is a marketing tactic. Although the patron is not required to purchase anything, the goal is for the business to make sales.
We advise caution any time a commercial purpose is associated with complimentary beer, wine or spirits.
Ask anyone that holds a liquor license in Tennessee. What is your #1 concern? Survey says: Sales to Minors.
As we see it, sales to minors has become headline news for three reasons:
1. State law now requires the ABC and beer boards to notify each other of suspensions for sales to minors. This results in 2 suspensions for the same sale, almost always at different times.
2. For the first time we can remember, the ABC is fully staffed. The ABC has enough agents to be consistently active in the field.
3. The ABC began to suspend licenses. In the past, the ABC fined restaurants and bars, but did not suspend licenses unless the license holder was not trying to effectively card. This meant that a business that had good training, written policies about alcohol service, required servers to card and fired employees that failed to card, for example, got a fine for a second or third sale to minor.
No longer. The ABC typically suspends a restaurant or bar liquor license for 14 days for a second sale to minor within three years. Package stores get a little leniency, with a 10 day suspension that can be broken down to a one week suspension with the rest served over one day a week, for example.
We do not fault the ABC and beer boards for conducting compliance checks. Sales to minors is a huge issue for the alcoholic beverage industry.
Supposedly clean crooner Neil Diamond sings a suggestive song that is inappropriately appropriate:
Girl, you’ll be a woman soon
Please, come take my hand
Girl, you’ll be a woman soon
Soon you’ll need a man
We have a collision of good policy and the reality that sales to minors is not something easy to enforce. Underaged drinking is a cultural phenomenon in the U.S. Combined with the explosion in technology that makes forgery of IDs rampant, requiring bars to solve the problem of underaged drinking is unfair and unrealistic, in our humble opinion.
The Tennessee Alcoholic Beverage Commission cracked down on free booze beginning July 1, 2014. We blogged about it here.
Distilleries, wineries, importers and other manufacturers can no longer give free product to wholesalers and retailers. This was a big change for the industry.
In the 2014 legislative session, as part of the ugly compromise that legalized wine in grocery stores (which we affectionately call “WIGS”), retail liquor stores were granted the right to accept free product from distilleries and importers, as we blogged here. All free product must pass though the wholesalers.
We thought that the new free-booze for tastings rule only applied to retail package stores – not restaurants, bars and other on-premise license holders. WIGS specifically applies to food stores and retail package stores.
The TABC appears to be interpreting the new free booze rule for tastings as applying to both on and off-premises retail licensees. If so, this is a huge benefit for restaurants and bars.
The TABC has proposed regs out for informal comment on this and other issues. We will keep readers posted on updates.
Bruno Mars’ Liquor Store Blues comes to mind:
Standing at this liquor store
Whisky coming through my pores
Feeling like I run this whole block
Lotto tickets and cheap beer
That’s why you can catch me here
Tryna scratch my way up to the top
The TABC has implemented a number of restrictions on the rights of distilleries, importers and other suppliers to market at restaurants, bars and package stores. Until recently, the new rules were not written. Often, industry members learned about the new rules when they were cited for violations and assessed large fines. Uncertainty is a bad thing for the industry and rumors about new ABC rules were rampant – and often wildly incorrect.
We applaud the TABC for taking a first step toward proposing written rules for tastings and other related trade practices. Attached is what TABC Director Keith Bell called “a very rough draft of our outline.” Distiller-Rep-Memo-Outline-ABC-Regs-Draft-01179350.docx
The Director asks for comments by January 15, and we encourage industry members to carefully analyze the proposed rules and comment to the Director via this link.
The new rules call to mind an Elvis Presley hit:
Well you got me working boss man
Working round the clock
I want to little drink of water
The recently minted Tennessee law that legalizes wine in grocery stores (which we affectionately call WIGS) gives retail package store owners new rights in exchange for having to compete against goliath grocery stores for wine sales.
Many liquor stores have been focusing on the newly vested rights to sell beer, glassware, gourmet cheese and other items under WIGS. Scores of stores have obtained approval from the ABC to merge liquor stores with adjacent beer stores.
A lesser known provision of WIGS eliminates the long-standing prohibition preventing liquor store owners from owning restaurants and bars. Before WIGS, the ABC aggressively investigated and enforced any accusation of ownership by a retail liquor store owner in a restaurant or bar. It was completely taboo.
WIGS is not entirely clear, but as we read the section, a retail liquor store owner can also partially or wholly own one or more restaurants or bars. Here is the provision:
Notwithstanding any other provision in title 57 or any rule to the contrary, an individual or corporation may hold a retail license issued pursuant to § 57-3-204 and may also hold a license to sell alcoholic beverages for consumption on premises pursuant to title 57, chapter 4; provided, however, that each license must be operated as a separate and distinct business and shall not be at the same location.
Reminds us of the shortest Beatles song, Her Majesty, from Abbey Road:
“I wanna tell her that I love her a lot,
but I gotta get a belly full of wine –
Her majesty’s a pretty nice girl;
some day I’m gonna make her mine – oh yeah.”
We see WIGS as a first step toward removing unnecessary government restrictions from the liquor industry. We encourage liquor entrepreneurs to exploit the changes for better business and profits..
An investigation by Nashville Channel 4 WSMV reporter
According to WSMV, the ID is complete with date of birth, address and photo, along with a hologram across the card. All of the information provided by the WSMV informant was false. According to WSMV, the 22-year-old was able to purchase alcohol in two different locations.
WSMV asked the ABC if they consider the ID a fake ID.
“This is a fake ID. Because anybody could make that,” Tennessee ABC Assistant Director Ginna Winfree said.
Now, the businesses that sold the 22-year-old the alcohol could be in trouble with the state.
“Based on this, they’re (the businesses) definitely committing a crime,” Winfree said.
Sabrina Jacal, the owner of Servicio Internacional, the company selling the IDs, said she doesn’t have to have state approval to make the IDs. “I’m not authorized to do anything. It’s not an authorization that needs to be given,” Jacal said. Jacal said she’s not selling fake IDs, but instead IDs that also serve as membership cards for translation services.
A particularly politically incorrect Ted Nugget song comes to mind:
Well, I don’t care if you’re just 13
You look too good to be true
I just know that you’re probably clean…
Jailbait you look fine, fine, fine…
If you are a Tennessee attorney looking for easy CLE, you may want to join us with a “Liquor Law Update: WIGS, High Gravity Beer…And Things That Make You Go Hmmmmm.”
Tomorrow December 2, 2014, and on line afterwards, Red White and Food advocate Emily Ogden and I will discuss the Wine In Grocery Store law and other major 2014 revisions to Tennessee liquor law. Course info is here.
Here is what we will cover:
New 2014 Tennessee liquor laws dramatically changed the liquor business in Tennessee. Wine in Grocery Stores (which we affectionately call “WIGS”) not only legalized the sale of wine in Kroger, WIGS gave retail liquor stores the right to sell beer and a host of other goods beginning July 1, 2014. The WIGS compromise requires the voters of each city or county to petition to have a local referendum election to approve of WIGS in the city or county. If WIGS is approved by local option election, grocery stores cannot begin selling wine until July 1, 2016.
WIGS was a true compromise that disappointed all industry members. As a hard-negotiated compromise, WIGS is full of provisions that make little sense from a business perspective.
Related legislation modernized the definition of beer to allow higher proof beers to be sold alongside Yazoo Dos Perros and Miller Lite beginning January 1, 2017. Current Tennessee law limits the alcoholic content of beer to 5% by weight.
2014 laws also legalized wineries to open a second retail store and have a restaurant. This allows wineries like Arrington Vineyards to open a restaurant at the winery and sell Arrington wines by the glass, as well as other alcoholic beverages. The new law enables City Winery in Nashville to make wine and have a restaurant concert venue, like the company does in New York and Chicago.
Learn this and much more in this one-hour session.
As part of the unseemly compromise to pass legislation authorizing the sale of wine in groceries in Tennessee, state law was changed to allow manufacturers to donate product for tastings at retail liquor stores. We blogged about the new law here.
We have been hearing from reliable sources that some manufacturers are using the tastings law as a conduit to illegally channel free booze to retailers for purchasing product.
Before the Tennessee ABC cracked down on free booze, the industry often gave free booze to a retailer that ordered a certain quantity. For example, a retailer might get 3 free bottles if it ordered 3 cases.
The TABC cracked down on free booze effective July 1, 2014.
Free booze for tastings gives unscrupulous industry members a way to funnel free product to retailers under the guise of using the product for tastings.
Conjures up Neil Young’s bizarre “Welfare Mothers”
Down at every laundromat in town now
(Welfare mothers make better lovers)
While they’re washin’ you can hear this sound now
(Welfare mothers make better lovers)
We applaud the new law and its goal to allow manufacturers to provide complimentary booze to retailers to help market wine and spirits. As a business-friendly state, it makes sense.
We strongly support efforts to prevent using the tasting law as a way to avoid the prohibition on free booze.
One idea is to mark free bottles with a label saying that the product is not for sale. This gives the TABC something to look for in stores. Another idea is to require wholesalers to break the seal of free product upon delivery to a retailer. Customers will generally not purchase open stock.
We invite industry members to share tips for ways to short-circuit the use of free tasting product as an illegal incentive for purchases.
The annual liquor license renewal for Tennessee on-premise liquor license holders has been the same for as long as we can remember. A TABC Agent inspects, tells the license holder it needs to renew and leaves a copy of the renewal paperwork.
A common complaint from corporate license holder was that the renewal application was not forwarded to corporate offices for renewal. This sometimes caused a last-minute or late rush to renew.
We recently learned that the TABC has changed the procedure for renewals. TABC agents still inspect before the renewal deadline. But renewal forms are no longer provided.
TABC agents direct license holders to forms available on line.
We are advising clients to calendar renewals. Given the recent ABC rule about voiding late renewals, which we covered here, timing for renewals is a potential trap.
Green Day’s bizarre lyrics to Homecoming comes to mind:
Jesus filling out paperwork now
At the facility on East 12th St.
He’s not listening to a word now
He’s in his own world and he’s daydreaming
With a prolonged interruption in service as the penalty for a late renewal, we strongly encourage that renewals be closely monitored and completed on time.