ABC Issues New Marketing Rules for Tennessee Restaurants, Bars, Package Stores, Fundraisers and Other Liquor License Holders

By - March 29, 2015 | Alcoholic Beverage Law | Email Will Cheek

We encourage industry members to learn the ins and outs of the new Tennessee ABC rules for marketing spirits and wine.  Read more here: Market Memo

Reminds us of the ubiquitous 1974 song by one hit wonder The Hues Corporation:

to rock the boat, don’t rock the boat baby
rock the boat, don’t tip the boat over
rock the boat, don’t rock the boat baby
rock the boat

Tennessee ABC Declines to Revoke Liquor License for Being Too Close to Church

By - March 27, 2015 | Alcoholic Beverage Law | Email Will Cheek

Monthly Tennessee Alcoholic Beverage Commission meetings are typically unexceptional.  Not a place to expect much drama or hullabaloo.

For industry insiders, the March ABC meeting featured a real cliffhanger.  The City of Memphis asked the ABC to revoke the license of Gagliano’s Liquor, Inc., d/b/a The Bottle Shoppe.  The ABC agenda framed the issue as follows:

On February 11, 2015, Mayor Wharton issued a letter revoking his approval of the City of Memphis’ Certificate of Compliance (dated July 31, 2014) for this location based on allegations of the site being too close to two churches and a residential community. The Commission is tasked with determining what recommendation to make to TABC staff regarding the action of the City of Memphis, including, but not limited to, having the issue set for TABC revocation before a state administrative law judge.

Two of our favorite Memphians, City Attorney Roane Waring and Memphis Alcohol Commission Executive Secretary Aubrey Howard, journeyed to Nashville to advocate for revocation of the liquor license of The Bottle Shoppe on behalf of Memphis Mayor A.C. Wharton.

Commissioner John A. Jones quickly extinguished hopes for help from the ABC.  Since the formation of the Tennessee ABC in the 1960s, there has always been a Jones on the Commission.  We love the perspective that Commissioner Jones often brings to the discussion.

Commissioner Jones observed that in his 20 plus years as a Commissioner, the agency had never revoked a liquor license because a city changed its position on approval of a certificate of compliance.  Jones noted that Memphis could deny renewal of the certificate of compliance when it came up for renewal.

Reminds us of Got My Mind Made Up by Bob Dylan and Tom Petty

Don’t ever try to change me,
I been in this thing too long.
There’s nothin’ you can say or do
To make me think I’m wrong.

We appreciate the Commission taking a firm position on this issue.  City approval of a certificate of compliance should be final for purposes of city laws like distance requirements.  The Commission should not be a forum for enforcement of local laws that a city has already signed off on.

Will Tennessee Feature Blockbuster Sequel to Whiskey Wars?

By - March 19, 2015 | Alcoholic Beverage Law | Email Will Cheek

Tennessee’s relatively newly-minted Attorney General found a way to seize the spotlight during the middle of Tennessee’s legislative session.  In what we suspect was one of the top daily downloads on the Hill, General Herbert Slaterty found a potentially fatal constitutional defect in Tennessee’s state law that defines Tennessee Whiskey.

Read about it here!

When we originally analyzed the whiskey bill, we thought that the exception carved out for Pritchard’s made the entire bill unconstitutional.

If a state-mandated recipe for Tennessee Whiskey was critical to survival of the product in the marketplace, why exempt what was then the state’s third largest distiller?

It is too early to tell, but General Slatery’s humble opinion may lead to a windfall of historic perspective for lobbyists.  With the Legislature starting to focus on winding down for the session, time is critical.  We expect a considerable amount of whiskey will be consumed in the ensuing evenings as distillers, legislators and lobbyists map out next steps, or reach a consensus to defer action until January 2016, when the Legislature reconvenes.

Conjures up a song that demonstrates the longevity of anti-government sentiment among some distillers:

“My daddy he made whiskey, and my granddaddy too

We ain’t paid a whiskey-tax since seventeen-ninety-two.”

Albert F. Beddoe immortalized the words in the 1953 tune Copper Kettle (The Pale Moonlight).

Tennessee ABC Sings New Tune About Sanctions against Distilleries and Wineries for Sales to Minors

By - March 04, 2015 | Alcoholic Beverage Law | Email Will Cheek

We are pleased to report that the TABC promptly responded to industry comment about suspending manufacturing privileges for sales to minors.  We broke the news here.

The new guidance says that sales to minors may lead to a suspension of rights to sample and sell spirits at the retail store, but sales to minors will not lead to a suspension of the right to manufacture.  We applaud the ABC for revisiting its policy based on industry feedback.

Brings to mind a classic by George and Ira Gershwin, “Changing My Tune:”

Wanted a permit to make me a hermit
To grumble and glare at the moon
But I’m arranging from now
To be changing my tune

Although some have grumbled that the TABC changes rules too often, we think that revising a rule based on industry comment is a good thing.  There is nothing wrong with the TABC proposing a rule and later revising the rule to better serve the alcoholic beverage industry.


Tennessee Distilleries and Wineries Can Be Shut Down for Sales to Minors

By - March 01, 2015 | Alcoholic Beverage Law | Email Will Cheek

The Tennessee ABC’s widespread compliance checks for sales to minors are testing wineries and distilleries.  We hear that at least one winery has failed and has been charged with a first count of sale to minor.

Why worry?  Under the ABC’s new policy for sales to minors, a second sale results in a 10 – 14 day suspension.

Based on what we have heard from the ABC, the suspension shuts down manufacturing.  Meaning that a second sale to minor could halt distilling or wine making for up to 2 weeks.

Hee Haw’s hard to forget tune by Buck Owens & Roy Clark comes to mind:

Gloom, despair, and agony on me

Deep, dark depression, excessive misery

If it weren’t for bad luck, I’d have no luck at all

Gloom, despair, and agony on me

Imagine Jack Daniel’s shut down for two weeks.  The economic impact would be enormous.

For distilleries, there is a way to prevent sanctions of retail sales from impacting distilling.  The new distillery law grants rights to taste and sell at retail with no additional license.  But the downside is that a sale to minor at the tasting room can shut down distilling.

The prior method for selling at retail required two permits – one for distilling and one for retail sales.  The prior method is still valid and we encourage distilleries to consider going “Back to the Future.”

With separate licenses, sales to minors should not impact the right to distill.

We hope that a Legislative solution comes forth.  The prior retail license is not as business friendly and the consequences of sales to minors at wineries and distilleries is devastating.

Here is an Easy Way to Card in Tennessee: Take the Math Out of Carding for Sales to Minors

By - February 19, 2015 | Alcoholic Beverage Law | Email Will Cheek

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.

Do I Need A Liquor License to Serve Wine in Tennessee?

By - February 17, 2015 | Alcoholic Beverage Law | Email Will Cheek

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.

What is the #1 Concern for Tennessee Restaurants and Bars? Survey says: Sales to Minors.

By - February 09, 2015 | Alcoholic Beverage Law | Email Will Cheek

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.


Free Booze for Tastings at Tennessee Restaurants and Bars?

By - January 13, 2015 | Alcoholic Beverage Law | Email Will Cheek

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

Tennessee ABC Releases Draft of New Rules for Consumer Tastings and Distillery Marketing

By - January 07, 2015 | Alcoholic Beverage Law | Email Will Cheek

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