New Tennessee Drivers License Law Promises More Headaches for Restaurants and Bars Trying to Prevent Sales to Minors

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

Tennessee tackled one of the biggest issues for carding minors over two decades ago.  Tennessee was on the forefront of states requiring that drivers licenses be plainly marked “Under 21″ if the person was under the age of 21.  TCA 55-50-334.

Problem is, the ID law has a broad loophole: “Upon attaining the age of twenty-one (21) years, any licensee may obtain a license without the letters, words and numbers required above by paying the fee for a duplicate license. However, no person shall be required to obtain the duplicate license, until the license expires.”

An “Under 21″ ID in Tennessee can be valid for up to five years after the person turns 21.

Instead of being an easy fix for servers, the “Under 21″ ID has become a trap.  Because so many people older than 20 have “Under 21″ IDs, many servers are so accustomed to the IDs that they presume the person must be old enough to drink.

New Tennessee legislation appears ready to increase the problem by three years.  SB209 is headed for the Governor’s desk, making Tennessee drivers licenses valid for eight years.

We see SB209 as a bill with good intentions, but a significant unintended consequence for preventing sales to minors in Tennessee.  We believe that the fact that Tennessee drivers licenses are valid long after a person turns 21 is a huge reason why so many restaurants and bars in Tennessee are failing ABC compliance checks.

Reminds us of the 1988 Looney Tunes smash movie ” Who Framed Roger Rabbit” and the classic line from Jessica Rabbit:

“I’m not bad. I’m just drawn that way.”

We have been blogging about effective carding strategies in Tennessee and encourage folks to focus on sales to minors in Tennessee.  Good operators have had liquor licenses and beer permits suspended for sales to minors.  Some are looking at devastating suspensions and revocation.  It is a real problem for the industry.

What Happens If I Sell Beer, Wine or Spirits Without a License in Tennessee?

By - April 15, 2015 | Alcoholic Beverage Law | Email Will Cheek

Folks ask us all the time.  What happens if I sell beer, wine or spirits without a license in Tennessee?

The short answer:  It can be really bad.  Do you want to go to jail or lose your business?

The sale of alcohol without a license is a crime in Tennessee, punishable as a Class B Misdemeanor.  TCA 39-17-702.  Conviction of a Class B Misdemeanor leads to jail time of up to six months, a fine of up to $500, or both. TCA 40-35-111.

From a practical perspective, a legitimate business that fails to have proper permitting may face serious legal consequences from the Tennessee ABC or local beer board.  Criminal charges are rare in our experience.

However, the failure to have proper alcoholic beverage permits may disqualify the business from being issued a liquor license or beer permit.  This is a risk that no responsible business owner should take.

Cosmetologists have a special exemption that allows service of complimentary wine, which we blog about here.

Kid Rock gets it:

So let’s roll the dice, one more time
Take a chance on love again tonight
Risk it all, lay it on the line

Perhaps the biggest concern is insurance.  We find that most insurers limit liability to liquor claims.  Generally, insurance policies exclude coverage for liquor liability without a valid liquor license.

Most folks do not recognize the importance of insurance, until you need it for a claim.  If someone who drinks at your business later kills or maimes another person in a drunk driving accident, for example, your insurance may not cover the claim, if you do not have a liquor license and dram shop insurance.

Without insurance, you could end up spending tens of thousands of dollars in legal fees and hundreds of thousands or even millions of dollars in damages.

We think it is not worth the risk to play fast and loose with the liquor laws.  Hire a licensed caterer.


How Much Food Does a Beer Bar Have to Serve in Tennessee?

By - April 10, 2015 | Alcoholic Beverage Law | Email Will Cheek

We love feedback from readers and this post is in response to a good question from a follower.

Question: In a beer-only bar, with no liquor license, do you have to have a kitchen and what are the food requirements?

Great question without an easy answer.  The reason?  The laws for beer are set by each city and county.  There are hundreds of Beer Boards in Tennessee and each has its own set of laws.

Because Tennessee has separate licenses for beer and liquor, there are probably hundreds of bars in Tennessee that only serve beer.  In almost every Tennessee city and county, the requirements for beer generally make it cheaper to open a beer bar than a place with full liquor service.

Beer bars in Tennessee are often well-loved watering holes that are quaint comfortable places to get loaded.  The kind of place you might expect to see George Jones or Janis Joplin

Although many beer boards have no rules for food service, some have very specific requirements.

For example, in Hendersonville, the beer laws require that food sales be at least 60% of total sales.  Hendersonville audits sales annually and the effect is to essentially prohibit bars in the city.

In Nashville, a beer bar must serve a meal.  Meal is not defined.  Beer inspectors in Nashville look for a food menu, kitchen equipment to prepare the food on the menu, and a place to store food inventory.

Maryville limits the number of Taverns, a business that’s primary purpose is the sale of beer, to 12.

We cannot help but think about Hank William’s classic:

There’s a tear in my beer
’cause I’m cryin’ for you, dear
you are on my lonely mind.

The take away?  Check local beer laws.

Powdered Alcohol Ban Headed for Approval in Tennessee

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

Powdered alcohol has quickly become a public nuisance, at least in the eyes of some legislators.  In Tennessee, legislation is swiftly bound to become law and criminalize the sale of powdered alcohol, except for medicines.

Critics claim the substance is ripe for abuse, particularly by minors.  Naysayers say that powdered alcohol can be snorted for a quick buzz or covertly sprinkled onto someone’s food.

The man behind the product disagrees.  “It would take you an hour of pain to [snort] the equivalent of one drink,” Mark Phillips said in an interview with the New York Times. “It really burns.”  We understand the product is lightweight, but bulky; not something that could be easily slipped into a coke or snorted.

We believe that the alcoholic beverage market is filled with products that target younger drinkers looking for a quick cheap buzz.  Alcoholic whipped creams, colorful pre-mixed shots at liquor store check outs and potent sugary pre-mixed cocktails seem to pose much more danger than powdered alcohol, at least from the vantage point of our easy chair.

According to the Times, Palcohol was “inspired by a love of hiking but a distaste for carrying bottles of adult beverages uphill.”

Based on the chilly reception of powdered alcohol in several states, we suggest that Mr. Phillips plans to end hikes at a bar or restaurant with a liquor license.

Heed Alan Jackson’s advice:

‘Cause life’s like a river
And the water is deep
Cross it with care
Or you’ll end up like me
Let my mistakes
Be your steppin’ stones
And walk on the rocks that I stumbled on

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.