Nonprofits have seen a number of changes in recent months with the requirements for special occasion liquor licenses, which is the main way charitable events are licensed and the only way that donated alcohol can be served on premises. Although a surprise to many nonprofits, the rules are manageable, if the event knows of the new rules early enough.
A new rule we discovered this month involves compliance with charitable solicitation laws. Although not terribly burdensome, complying with charitable solicitations takes time.
Calls to mind “Sun City” by Artists United Against Apartheid, a multi-celebrity benefit song featuring Steven van Zandt, Miles Davis, Peter Gabriel, Bono, Springsteen, Lou Reed, Herbie Hancock, Bob Dylan, Peter Garrett, Run DMC and Joey Ramone:
We’re rockers and rappers
United and strong
We’re here to talk about South Africa
We don’t like what’s going on
Many nonprofits learn of the new ABC requirements days before the event, which is not enough time to register. Among the requirements is a bond, which normally takes several days to process.
With all the changes, we strongly encourage nonprofits to focus on Tennessee liquor licensing well in advance of the event. We are seeing too many well-intentioned fundraisers scrambling to comply with the new liquor laws.
We are huge fans of the Tennessee distilleries that are working together as the Tennessee Distillers Guild. Fierce competition among distilleries has been set aside for the better good of promoting distilling in Tennessee. Industry leaders Jack and George have joined forces with new distillers to support the Tennessee Distillers Guild.
Yesterday, the Tennessee Distillers Guild website went live. Check it out here.
The Tennessee Distillers Guild could be a magnet for Millennial and other highly desirable tourism in Tennessee. A Tennessee whiskey trail could be a huge draw.
Although Kentucky’s bourbon trail is well established, Tennessee’s whiskey trail has a marquee brand known world-wide. Jack Daniels is one of the most-recognizable U.S. brands – like Coca-Cola. Unlike most of the bourbon purveyors in Kentucky, most of the distilleries in Tennessee’s guild are truly small artisan businesses with fabulous stories to tell.
George Jones immortalized the famous illegal Tennessee moonshine tradition:
Well I asked my old pappy why he called his brew
White lightning ‘stead of mountain dew
I took a little sip and right away I knew
As my eyes bugged out and my face turned blue
Lightning started flashin’ and thunder started crashin’
Shhhoooh… white lightnin’
This summer, we expect many of the purveyors of moonshine to have aged Tennessee whiskey for tasting and sale. The Tennessee Whiskey Trail will offer craft spirits that are unique to Tennessee and made in limited quantities that are available in very limited quantities.
Stay tuned for progress from our home-grown distilleries.
For as long as we can remember, the Metro Nashville Beer Board has imposed an automatic formula for penalties for sales to minors. First offense is a fine, second offense is a 14 day suspension, and third offense is a 30 day suspension.
It mattered not how hard you are trying to prevent sales to minors or how large is your venue.
The mathematical application of penalties calls to mind a classic School House Rock Song, Three is a Magic Number:
Every triangle has three corners,
Every triangle has three sides,
No more, no less.
You don’t have to guess.
When it’s three, you can see
It’s a magic number.
Last night, Wednesday September 23, 2015, the beer board offered a $2,500 fine to several restaurants charged with a second sale to minor. Previously, a 14 day suspension was the only option.
As best we can understand the rationale, the Metro Nashville Beer Board will consider a fine for a second sale to minor if the restaurant or bar can demonstrate that it has policies and training in place to prevent sales to minors.
The Tennessee ABC used to follow a similar policy for sales to minors. If you are doing a good job trying to prevent sales to minors, you got a fine instead of a suspension.
Any restaurant or bar owner knows that no matter how much you train and how good your carding procedures are, you are at the mercy of your servers. A simple mistake by a server can lead to a disastrous suspension of your liquor license.
Although we agree that sales to minors is a huge issue for the industry, we applaud the Metro Nashville beer board for recognizing the efforts of law-abiding liquor license holders.
We have heard from restaurant and bar owners in Memphis, Nashville, Chattanooga and Knoxville about what folks say is an ABC sting for sales to minors. Several folks have described a sting where 3 or 4 ABC agents sit at a table and order food. Folks over the age of 21 order alcoholic beverages, but an agent under the age of 21 does not try to order alcohol.
After the meal, the server presents the check and the under age cadet pays the tab.
The ABC charges the restaurant with a sale to minor because the meal, including alcoholic beverage, is paid for by the minor.
We have been in close communication with leadership at the ABC over the past several months. In our humble opinion, the ABC would not engage in a sting like described above. We have checked with a trusted source at the ABC, and the sting is not employed by ABC agents.
Clash’s hit Police on My Back seems appropriate:
Yes, I’m running down the railway track
Could you help me? Police on my back
They will catch me if I dare drop back
Won’t you give me all the speed I lack
We think license holders can beat a charge from a sting like the rumor mill describes. SAC Melvin Brown and other law enforcement at the ABC certainly understand that they will loose these cases. We chalk this alleged “sting” up to the rumor mill.
After our post, Jeff from Black Horse Pub in Clarksville commented about the unpredictable practices of local police. Jeff notes:
I agree the abc may not execute that sting. But local municipalities playing the game are not under the same guidelines as the tabc. The Montgomery county sheriffs office just had a bunch of drug possession cases tossed because the deputies set up on I-24 and were stopping cars that just looked like they were packed for bonnaroo. They actually stated that they were using “going to bonnaroo” as probable cause to stop the cars. Their dashboard cams showed them standing on the side of the interstate watching for cars with “hippies” in them and then jumping in their cars and chasing down kids cars. You can never underestimate them.
Tennessee professes to be a business-friendly bastion. But like many states, business-friendly advocates in Tennessee also support laws that aim to curtail the rights of immigrants.
A law passed in 2015 raises the bar for immigrants seeking to obtain beer permits, which are necessary to open markets in Tennessee. The new law requires:
After July 1, 2015, a city or county shall not issue a permit under this chapter unless the applicant has been a citizen or lawful resident of the United States for not less than one (1) year immediately preceding the date upon which the application is made to the city or county.
Previously, a handful of beer boards required proof of rights to work in the U.S, like a green card, before issuing a beer permit. For example, Nashville has required documentation for a couple of years.
The new state law requires a one year waiting period – meaning that someone that legally immigrates to the U.S. cannot qualify for a beer permit for one year after being granted permission to work in the U.S. Based on our informal experience, the vast majority of non-chain markets are independently owned by immigrants.
There may be U.S. constitutional issues with the new state residency law and waiting period, but that will require expensive litigation and several years to resolve. We see the new law unfairly impacting immigrants for years to come,and although it may ultimately be declared unconstitutional, relief is not going to be snappy.
Rock icon Led Zeppelin sang about immigration in a very different time and about a very different group of immigrants:
We come from the land of the ice and snow,
From the midnight sun where the hot springs blow.
The hammer of the gods
Will drive our ships to new lands,
To fight the horde, singing and crying:
With the passage of wine in grocery stores, which we affectionately call WIGS, the Tennessee ABC has made a commitment to on-line paperless filings for WIGS applicants.
At the August ABC meeting, the Commission was updated about the progress of the new on-line system. The report projects that the paperless system will go “live” on May 18, 2016. The report indicates that design for the system is complete and that the system is being implemented.
The goal is to make WIGS applications entirely electronic. The ABC also hopes to have the electronic filing system ready for retail liquor stores and wholesalers.
We appreciate how difficult it is for the ABC to go paperless. We went paperless in 2006, but we only had a few hundred files to digitize. The ABC has tens of thousands of files.
Johnny Paycheck knows all about it:
Take this job and shove it
I ain’t working here no more
My woman done left and took all the reasons
I was working for
Wine hits the shelves in grocery stores starting July 1, 2016. Theoretically.
Trader Joe’s captures the excitement in this sign, photographed Monday.
There is lots to be done behind the scenes before Kroger can sell Kendall-Jackson. The Tennessee ABC has to implement a new application process, cities have to adopt new procedures for certificates of compliance and grocers have to obtain wine licenses and certify employees to sell wine.
Which is why we caution that July 1, 2016 is hypothetical for wine in groceries.
Eddie Brickell & the New Bohemians is philosophy 101 for us:
Choke me in the shallow waters
Before I get too deep
What I am is what I am
Are you what you are or what?
Meanwhile, we sympathize with the uneasiness among retail package store owners about the potentially dire consequences of wine in groceries.
Over the past few years, Tennessee has become ground zero for new laws requiring universal carding for beer, wine and spirits. Tennessee was the first state to require everyone to be carded for beer sales, which we blogged about here. More recently, Tennessee passed a law that requires that all patrons must also present valid ID to purchase wine and spirits in liquor stores.
We blogged about who has to card here.
The exceptions to universal carding are pretty obscure and, in our humble opinion, not easy to find or understand by your average license holder, much less consumers.
Kid Rock not unsurprisingly weighs in:
couldn’t wait to turn 21
To sit in the backyard sun and drink beer with dad
Drinking beer with dad
Out there on the back porch swinging
Drinking beer with dad
Picking my guitar and grinning
We’d hem and haw, we’d cuss and fight
But that’s where I learned life’s best advice
For retail liquor stores, here is the exception that was passed effective May 15, 2015:
SECTION 3. Tennessee Code Annotated, Section 57-3-406(d)(1), is amended by deleting the language “the adult consumer” in the second sentence of the subdivision and substituting instead the language “the adult consumer whose physical appearance does not reasonably demonstrate an age of fifty (50) years or older”.
SECTION 4. Tennessee Code Annotated, Section 57-3-406(d)(1), is further amended by deleting the language “person” in the last sentence of the subdivision and substituting instead the language “person whose physical appearance does not reasonably demonstrate an age of fifty (50) years or older”.
SECTION 5. Tennessee Code Annotated, Section 57-3-808(a), is amended by deleting the period”.” at the end of the subsection and substituting instead the following language:
; however, it is an exception to any criminal punishment or adverse administrative action, including license suspension or revocation, for a violation of this section if the sale was made to a person who is or reasonably appears to be over fifty (50) years of age and who failed to present an acceptable form of identification.
Rather that making it expressly legal not to card someone that has an ID that says the person is over 50 and the person looks over 50, the law eliminates criminal prosecution for selling to a 51 year old that presents an ID.
In our humble opinion, the legislature dodged the issue of carding elderly and regulars. Although politically popular, universal carding is not without its faults.
For beer, the following was enacted a few years ago. Like the retail liquor store exemption, it does not eliminate the carding requirement; it only decriminalizes the failure to card.
57-5-301. (a) (1)The permit holder or employee shall make a determination from the information presented whether the purchaser is an adult. In addition to the prohibition of making a sale to a minor, no sale of beer for off-premises consumption shall be made to a person who does not present such a document or other form of identification to the permit holder or any employee of the permit holder; however, it is an exception to any criminal punishment or adverse administrative action, including license suspension or revocation, as provided for a violation of this section if the sale was made to a person who is or reasonably appears to be over fifty (50) years of age and who failed to present an acceptable form of identification.
The concessions for older folks to not be required to show ID in Tennessee to purchase alcohol are pretty wimpy, in our humble opinion. The law still requires you to card everyone, but if you fail to card some older folks, you cannot be criminally cited.
No wonder most places require everyone to show ID, including octogenarian.
Often celebrated by foodies for creative but cheap eats, food trucks have become grazing ground zero for diners in Memphis, Nashville, Knoxville and Chattanooga. Food trucks have many advantages over bricks and mortar restaurants, with one key exception.
Tennessee liquor laws do not allow a food truck to serve beer, wine and mixed drinks the way that a restaurant or bar does. We blogged about the topic here.
In Tennessee, liquor licenses are generally issued for a specific building. Add a patio or expand your restaurant, for example, and you have to get approval from the ABC.
Food trucks are mobile by definition and do not qualify for restaurant liquor licenses. There is no special liquor license for food trucks.
James Brown and Paliament-Funkadelice bassist Bootsy Collins gets it with Munchies for Your Love
I got the munchies for your love
Your love is kind of sweet, sweet enough to eat
I’m hooked on you chocolate star
I got the munchies for your love
Alcohol at food trucks is a hot topic at national liquor conferences, but state liquor laws are driven largely by liquor industry politics and not consumer demand. We are not seeing states flocking to adopt food truck liquor licenses. Tennessee is no exception.
Although we have found ways to license food trucks in certain circumstances, very few food trucks will qualify for beer permits and liquor licenses under Tennessee law.
We have heard from numerous folks about how ridiculous it is to card old folks for alcohol. We blogged about the pitfalls of universal carding.
Tennessee law requires universal carding for beer sales from grocery and convenience and at liquor stores. Details are here.
Although Tennessee law does not require restaurants, bars and clubs to card everyone, the fear of damaging suspensions of liquor and beer permits has provoked large numbers of businesses to adopt universal carding. Fans of universal carding say that the policy is a hard and fast rule that takes guessing out of the hands of servers. No more reckoning about how old a person is.
Blue Oyster Cult’s classic is appropriate:
Don’t fear the Reaper
Baby take my hand
Don’t fear the Reaper
Tennessee restaurants, bars and clubs are under considerable pressure from the Alcoholic Beverage Commission. ABC minor stings have hit restaurants and bars hard, particularly in Memphis and Nashville.
The pressure is intense. Under old ABC policy, failing a minor sting lead to a fine, as long as the establishment demonstrated that it was trying to card. New ABC policy means a 10-14 suspension for a second sale and 30-45 days for a third. A fourth sale to minor in three years may lead to revocation.
Making matters worse is a new state law that requires beer boards to impose a suspension at least as long as the ABC. The new law requires the ABC to notify the beer board of any suspension for sale to minor by certified letter. The law also requires beer boards to notify the ABC of suspensions and requires the ABC to suspend the liquor license at least as long as the beer board.
Pouring salt in the wound is the fact that the ABC suspension and the beer board suspension generally are imposed at different times.
We know of many well-known respectable businesses in Memphis and Nashville that are facing the prospect of lengthy suspensions. Managers and staff are under huge amounts of pressure to avoid a fourth sale to minor, which can lead to revocation.
For older customers in particular, the result of the stepped up ABC enforcement makes no sense. Why card 55 year olds? Try purchasing alcohol with a foreign ID, like Ireland or Israel. Even in Nashville honky tonks and Beale Street blues clubs, bars often will not take the chance of serving someone with a foreign ID.
The end result of the new policy is that Tennessee is less friendly to tourists. In our humble opinion, not a good trend for a state that derives a lot of revenue from visitors.
Jim Leonard followed our post on universal carding and has some good comments below. We tend to agree that universal carding is publicly popular, but really takes the focus off identifying and refusing service to under age patrons.
Mr. Leonard comments:
I am writing in response to Will Cheek’s post on August 9th about the extensive carding policies used by nearly every liquor-by-the-drink (LBD) in the State of Tennessee. My thanks to Will for allowing me to share my thoughts on his blog.
Let me first clarify that laws for retail alcohol sales have been relaxed slightly. C-stores (grocery and convenience stores) and liquor stores are supposed to card everyone who reasonably looks to be under 50 years old. The actual laws (2007 for c-stores, 2014 for liquor stores) still say ‘universal carding’ but the fines have been removed in cases where the patrons are 50+ so effectively that lifts the ‘universal’ carding requirement.
There are many reasons why LBDs should not enforce a universal carding policy. First, this policy is an extraordinary reaction to a problem that doesn’t really exist. It is true that there are people under 21 who want alcohol and it is best for everyone if they don’t get it. That said, is there any evidence that underage drinking has become such a crisis in the State of Tennessee that we must adhere to the most unreasonable policies in the country? There are 49 other states and well over 149 other countries that do not resort to universal carding policies. The government, specifically the Alcoholic Beverage Commission is imposing a solution that in no way aligns to the magnitude of the problem.
Second, universal carding at LBDs does not work. Many establishments here in Chattanooga have employed universal carding since the retail law changed for liquor stores on July 1, 2014. ABC agents routinely conduct underage stings and they always catch a server who fails to card or fails to properly read an ID. ABC’s own documentation has made my case for me, even when you employ universal carding underage people will occasionally get served.
Third, universal carding weakens the quality of carding when it matters. Servers are constantly toggling between real carding (the patron who looks to be under 30) and ridiculous carding (friends, family, and people who are clearly over 30). It’s only a matter of time before a server looks at an underage ID without paying attention because half the time you are just glancing at the ID to satisfy ABC. This happened recently at Clyde’s in Chattanooga.
It would be more effective to tell servers, “only card when it matters and take every one of them seriously.” I pose this question to anyone who favors universal carding – how does carding patrons over 30 make you better at catching patrons under 21?
Fourth, As Will alluded to on August 9th, universal carding is bad for tourism. It’s a big industry for our state and draws millions of visitors each year. We don’t come off as very good hosts when we demonstrate that Tennessee has done away with common sense. In addition to looking silly we have many situations where servers and managers flat out lie to tourists and tell them ‘It’s a state law’. I for one don’t think lying to tourists is a good way to represent Tennessee. Eventually we will lose some major convention business or even business relocation opportunities due to this policy.
Fifth, we are setting a very troubling precedent about the role of government. Universal carding says that you (the server) are not entitled to use your own knowledge or common sense. You are not allowed to simply know that your mother is older than you. You must see her state-issued ID. You are not allowed to safely reason that the man with the grey beard is at least a day passed his 21st birthday. You must ask to see his state-issued ID. ABC is effectively telling all of us that we are not allowed to think and we must rely on the state. The government can’t get much bigger and more intrusive than forcing you to abandon your own judgment.
The next time you see a 23-year-old server tell a 55-year-old man that she must see his ID, just remember that somewhere just down the street a 17-year-old is drinking the beer that his older brother bought him. This policy will ban common sense but it will not stop underage drinking.