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UPDATE: Hotels CANNOT Sell Bottles of Booze in Tennessee

By - August 19, 2016 | Alcoholic Beverage Law | Email Will Cheek

UPDATE: Apparently we had a miscommunication with the ABC.  Hotels CANNOT sell spirits by the bottle.  Hotels can sell wine by the bottle in connection with food service, including room service.  There is no change in the policy.

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Old dogs can learn new tricks.  Today, we found out that the Tennessee ABC has been quietly advising that hotels can sell spirits by the bottle at gift shops, with some conditions.

Tennessee law generally prohibits the sale of bottles of spirits at any business holding an on-premise liquor license, like a restaurant or bar.  You cannot order a bottle of Jack Daniels to your table at a honky tonk.  Only wine can be sold by the bottle.

Hotels are a little different.  You have a room.  What you do in your room is your own business.  The ABC apparently recognized this difference.

Here are the rules for bottle sales, as we understand them:

  1. The bottle must be opened by a hotel employee.  Guests cannot purchase a sealed bottle.
  2. The bottles must be priced at or above cost.  Ensure that the bottle is scheduled on your price schedule filed with Revenue.
  3. The hotel must pay the liquor-by-the-drink tax.
  4. The bottle must be consumed on property. We strongly encourage hotels to post signage instructing that alcohol must be consumed in the hotel and cannot be taken off property.
  5. The hotel must ID check to ensure the purchaser is 21 or over.

It logically follows that a hotel can also sell a bottle of spirits through room service.  We are cautiously advising hotels that it is legal to sell a bottle of Jack to a room, using the same guidelines.

Instead of signage, we recommend that the room service include a card that says that alcohol must be consumed in the hotel and cannot be taken off property.  We think most hotels will prefer to include a card that says that alcohol must be consumed in your room.  Who wants guests wandering around the property with drinks from their room?

Brings to mind a Van Halen classic, Take Your Whiskey Home:

Well, my baby, she don’t want me around
She said she’s tired of watchin’ me fall down
She wants the good life (ow) only the best
But I like that bottle better than the rest

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Tennessee Liquor Industry Big Player in Money and Politics – Again

By - August 01, 2016 | Alcoholic Beverage Law | Email Will Cheek

We could not help noticing the enormous amounts of money donated by liquor industry associations in the second quarter of 2016.      Nothing really new, but it confirms just how important the state political process is to the wholesalers and retailers, which were massively impacted by wine in groceries (WIGS) and scored a number of victories in the final WIGS law.

According to our friends at The Tennessee Journal, the liquor wholesalers topped the list of all PACS with $106,000 contributed in the second quarter.  Although retail liquor stores were 11th on the list at $39,500, their stellar lobbyists – McMahan Winstead – donated an additional $45,250.

In comparison, the second highest contributor are the Teachers at $63,450.  The hotel restaurant association logged $42,500.

Reminds us of one of our favorite lines from a movie – Richard Pryor in the 1970’s classic “Car Wash”

Cause money walks…..and bullshit talks…

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What Kinds of Wine Can a Grocery Store Sell in Tennessee

By - July 19, 2016 | Alcoholic Beverage Law, WIGS Manager | Email Will Cheek

Food stores licensed to sell wine in Tennessee under WIGS can only stock certain kinds of wine.  As WIGS has rolled out, confusion over what can be sold at a grocery has been a major issue.

There are no final rules yet from the ABC – its early and we do not expect final rules yet – but here is our summary of what wine we believe a grocery store can sell in Tennessee:

  1. Wine.  The law defines wine as being the product of fermented grapes.  Think Chardonnay, Merlot, Champagne.
  2. Blackberry and other Fruit Wines.  As long as the wine is made from fermented berries, groceries can sell it.  Flavored fruit wines are probably not allowed.
  3. Wine Coolers.  This is a product being discussed, but for now, wine coolers can be sold by grocery stores.
  4. Beer up to 5% by weight, which is roughly 6.4% by volume.  This goes up to 8% by weight, roughly 10% by volume, starting January 1, 2017.

A grocery cannot sell:

  • Fortified alcoholic beverages, like port alcoholic beverages and sherry, unless the wine is under 18% alcohol by volume
    • MD 20/20, Thunderbird, Night Train and Wild Irish Rose are all under the maximum strength of alcoholic beverages and can be sold at food stores
  • Alcohol derived from alcoholic beverages that has had substantial changes to the alcoholic beverages due to the addition of flavorings and additives
  • Sake
  • Spirits like whiskey, vodka and run
  • Liqueurs and cordials like Frangelico, Schnapps, Baileys and Grand Marnier
  • Beer over 5% alcohol by weight or 6.4% alcohol by volume

Our buddy Willa reminds us of the Gordon Lightfoot tune Blackberry Wine:

There’s a new moon risin’ and the wind sings its old song
Pass it on over it’s a sin to be sober too long

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WIGS 20% Minimum Markup Massively Mystifies Tennessee Groceries

By - July 18, 2016 | Alcoholic Beverage Law, WIGS Manager | Email Will Cheek

Wine in groceries has been legal in Tennessee for just 18 days.  But the WIGS law seems to have raised more questions than answers.

The statutory 20% minimum markup has been a constant source of questions for grocers.  Here is one of our favorites:

When the wholesale price of wine drops, what is the minimum price that can be charged?

For example, say you have purchased wine at $10 per bottle.  You price the wine at $12, the lowest legal price.

The wholesaler offers you the same wine for $9 a bottle.  You can price this at $10.80.  You buy the $9 wine, but have wine on the shelves that you purchased at $10.

Can you sell the all of the wine at $10.80, including the wine you purchased at $10?

Our best guess is yes.  We think the last invoice price will be the rule for WIGS pricing.  Look to the last invoice price and make sure the price is marked up at least 20%.

The Eagles comes to mind:

Wastin’ our time
On cheap talk and wine

There is no guidance from the ABC yet.  Given the huge number of WIGS questions, we do not fault the ABC.  Things are moving at the speed of light.

 

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Hot Off the Press: Tennessee ABC Issues FAQS for WIGS

By - July 11, 2016 | Alcoholic Beverage Law, WIGS Manager | Email Will Cheek

Moments ago, TABC Director Clay Byrd released final guidance for wine in grocery stores, which we affectionately call WIGS.  Here is your very own copy.

WIGS has been live for consumers for 11 days, but the euphoria is still palpable.  We hear the Pointer Sisters classic:

I’m so excited, and I just can’t hide it
I’m about to lose control and I think I like it

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We Can Dance if We Want to – Without a Beer Permit in Nashville

By - July 09, 2016 | Alcoholic Beverage Law | Email Will Cheek

For as long as we have practiced law, we have always been amused by the Metro Nashville Dance Permit.  We fondly recall hanging out at World-Famous honky tonk Tootsie’s back before they had a dance permit.  If you dared to stand up and start swaying to the music, the bartender would yell: “Sit down.  We ain’t got no dance permit.”

Earlier this year, Metro quietly eliminated the dance permit requirement.  If you have a dance permit in Nashville, you do not have to renew it.

For decades, if your business had live music, a dance floor, or even a random drunk dancing to a song on the juke box or radio, you had to have a dance permit in Nashville.  Although not a complicated process, most saw it as an unnecessary bureaucratic requirement.

Although the antithesis of a Tootsie’s song, we cannot help thinking about the classic early ’80s hit by Canadian one-hit wonder Men Without Hats:

We can dance if we want to
We can leave your friends behind
‘Cause your friends don’t dance and if they don’t dance
Well, they’re no friends of mine

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Call Me The VEEP! Tennessee ABC Names New Second In Command

By - July 08, 2016 | Alcoholic Beverage Law, WIGS Manager | Email Will Cheek

Zack
Zack Blair – Assistant Director, Tennessee Alcoholic Beverage Commission

Zack Blair has been named Assistant Director of the Tennessee Alcoholic Beverage Commission.

Previously, Assistant Director Blair served as Director of Legislation for the Department of Children’s Services for the State of Tennessee.

Assistant Director Blair whet his appetite for the alcoholic beverage industry while working as Legislative Assistant to Senator Bill Ketron. Assistant Director Blair’s first experience with alcoholic beverage law was during the second year of the WIGS struggle, back in 2008, when he served as a legislative intern during college while a student at Lipscomb University. Senator Ketron is generally known as the godfather of liquor legislation in the State Senate.

Assistant Director Blair is a native Middle Tennessean and a third generation graduate from Smyrna High School.

Although a truly native Tennessean, the classic Eagles “New Kid in Town” comes to mind:

There’s talk on the street; it sounds so familiar
Great expectations, everybody’s watching you
People you meet, they all seem to know you
Even your old friends treat you like you’re something new

We wish Assistant Director Blair well in his new role.

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WIGS Means Wine for Ecstactic Tennesseans but a FUBAR for Food Stores

By - July 06, 2016 | Alcoholic Beverage Law, WIGS Manager | Email Will Cheek

Wine
Vicki Schmidt, Paralegal at Bone McAllester Norton

D Day for wine in Tennessee came with great fanfare.  Volunteer State Vinophiles celebrated July 1 like it was 1999.  Here is alcoholic beverage team member Vicki Schmidt purchasing the fourth bottle of wine on July 1 from her local Walmart.  Vicki got in line before 8 am to be the first, but was scooped.

 

 

 

 

 

 

 

 

Its hard for folks out of state to understand the excitement.  We got tons of photos, texts and e-mails from friends that made a special point of buying wine before going to work.  Here is one of our favorite clients, Rebecca Ramsey from the Nashville airport – BNA to those on the inside – with her buddy Devi Sanford, making history.

Wine Buds
Devi Sanford with Airport Authority’s Rebecca Ramsey

 

 

 

 

 

 

 

 

 

WIGS D-Day conjures up one of our favorite tunes:

I was dreamin’ when I wrote this
Forgive me if it goes astray
But when I woke up this mornin’
Coulda sworn it was judgment day
The sky was all purple,
There were people runnin’ everywhere
Tryin’ 2 run from the destruction,
U know I didn’t even care

‘Cuz they say two thousand zero zero party over,
Oops out of time
So tonight I’m gonna party like it’s 1999
In our humble opinion, the Tennessee ABC and industry members pulled off a minor miracle to license the sale of wine by July 1.  In the wake of licensing efforts, there are a number of important questions to resolve for wine sales.  The industry is working with the Tennessee ABC to resolve these.

One question we hear a lot is what can a food store legally sell.  Wine is very narrowly defined for food stores and the following cannot be sold:

  • Fortified alcoholic beverages, like port alcoholic beverages and sherry.
    • MD 20/20, Thunderbird, Night Train and Wild Irish Rose are all under the maximum strength of alcoholic beverages and can be sold at food stores
  • Alcohol derived from alcoholic beverages that has had substantial changes to the alcoholic beverages due to the addition of flavorings and additives
  • Spirits like whiskey, vodka and rum
  • Liqueurs and cordials like Frangelico, Schnapps, Baileys and Grand Marnier
  • Sake
  • Beer over 5% alcohol by weight or 6.25% alcohol by volume – known as High Gravity Beer in Tennessee

 

As we read the law, wine coolers cannot be sold by food stores, because the wine is substantially changed by sweeteners and usually flavorings.  Industry members are generally in agreement that wine coolers should not be sold at food stores, unless the ABC makes a rule that allows the sale.

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Boot Scootin’ Boogying Now Legal in Nashville Without a Dance Permit

By - June 23, 2016 | Alcoholic Beverage Law | Email Will Cheek

For as long as our ancient selves can remember, Nashville required a dance permit for every place that played live music or had a dance floor.  Dancing without a dance permit in Nashville was illegal for decades.

Earlier this month, with absolutely no fanfare, Metro Nashville repealed the dance permit law.  The ordinance is here.

Nashville restaurants, bars, hotels and venues rejoice!  You save $100 per year and the hassle of having to fill out a renewal every year.

Our good friend Willa reminds us of the Brooks & Dunn hit “Little Miss Honkytonk”:

She’s got my number, knows my favorite songs on the jukebox
Goes to gettin’ down like crazy and the whole place rocks
We’ll have a few and get to feelin’ right
She’ll be my queen bee I’ll be her neon knight
I’m her big cat daddy, she’s my little Miss Honky Tonk

We originally raised a stink about the antiquated dance permit in our blog post about a prom that had to have a dance permit.

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WIGS Industry Agrees to Disagree About Who Can Receive Orders of Wine – For Now

By - June 22, 2016 | Alcoholic Beverage Law, WIGS Manager | Email Will Cheek

A wide range of industry members met this Monday June 20 to discuss proposed regulations for WIGS.  Thanks to Matt Scanlan for organizing and hosting.

One hot question is whether deliveries of wine must be made to a designated manager.  Some say yes, some say no.  For now, we agreed to defer making a recommendation to the ABC – until after the dust settles from the first day of wine sales, NINE days from now.

For now, we are advising folks that wine deliveries may be accepted by any store employee, regardless of whether they hold a designated manager permit.  We caution that in the near future, the ABC may require that designated managers are the only employees that can legally accept wine deliveries.

With the wine count down, the Beatles “Revolution 9” comes to mind:

Number 9

Number 9

We never understood that song…

We believe that the best rule is to require designated manager to accept deliveries of wine.  The designated manager does not have to physically haul cases of wine, but should be at the store when wine is delivered.  In particular, invoices should be carefully reviewed upon delivery.  If the price of a variety of wine increases, the store may have to mark up the price for all bottles on hand of that variety of wine.

A designated manager is trained to understand how the 20% markup works.  No one else at the store is trained on this.

We believe the specialized training for designated managers should be put to good use.  Designated managers should be required to receive wine deliveries.

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