AAIAC

The Alliance of Alcohol Industry Attorneys & Consultants is a select organization of alcoholic beverage licensing and compliance professionals.

Metro Nashville Beer Board announced temporary beer permit charge

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Category: beer, Metro Nashville Beer Board

09.19.18

At its regular meeting last week, the Metro Nashville Beer Board announced it will charge $8.33 per month for temporary beer permits. The new charge became effective Monday, September 17, 2018.

Instead of seeing this as a bitter pill to swallow, we see the new procedure as icing on the cake. $8.33 is basically the margin on a couple of domestics on Lower Broadway. It’s really not much money for a permit to sell beer.

The Metro Beer Board has been streamlining the process for applications since Benton McDonough was named Executive Director a few months ago. After you supply all your documents and required inspections to the Beer Board, you can new obtain a temporary beer permit, instead of waiting for the next Beer Board meeting. Paying for the permit is only fair.

Although there is nothing in state law that specifically authorizes the city to charge for a temporary beer permit, it is just a beer permit, and beer boards are authorized to charge $100 per year for beer permits. The $8.33 amount represents the one-month prorated amount for a $100 beer permit. 

This passes statutory muster, in our humble opinion. 

For those thinking about bellyaching about the $8.33 fee, here’s a good one from Travis Tritt, suggested by our friend Willa:

Now won’t you tell me if you can

‘cause life’s so hard to understand

why’s the rich man busy dancing

while the poor man pays the band.

Oh they’re billing me for killing me

Lord have mercy on the working man.

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Can I Sell Sake in My Grocery Store in Tennessee?

New Tennessee open carry law is gamechanger for many restaurants, hotels

Can I buy alcohol on Labor Day in Tennessee?

Restaurants and hotels get the green light to give away alcohol

Metro Nashville Beer Board toasts new Tennessee open carry law

Original author: William T. Cheek III
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Duncan Liquor Law Letter - August 2018

Duncan Liquor Law Letter - August 2018

Read Duncan Liquor Law Letter

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Metro Nashville Beer Board toasts new Tennessee open carry law

Metro Nashville Beer Board toasts new Tennessee open carry law Metro Nashville Beer Board toasts new Tennessee open carry law

We believe that the Metro Nashville Beer Board has become the first local board in the State of Tennessee to officially approve “open carry” of beer between two different licensed premises, pursuant to the newly-enacted open carry law in P.C. 755.  We blogged about P.C. 755 here.

We should clarify that open carry involves carrying alcoholic beverages between two contiguous licensed premises.  Open carry is not open container, where alcohol can be carried on an open street, down a sidewalk or in other public places. 

The Metro Beer Board required full applications by each permittee in order to approve the expanded premises. Approval was required before patrons carry beer between the two permit holders. 

We have recommended that beer boards require some sort of notice, at a minimum, before alcohol is allowed to leave the traditional licensed premises.  Metro Nashville asked for an application, the $250 application fee and most of the normal documents one would expect for expanding the premises of a licensed establishment, much like adding a patio to an existing restaurant.

As much as we are disposed to rail on the man, we cannot fault Nashville’s requirement concerning open carry under P.C. 755 — it is entirely reasonable.

Our buddy Willa reminds us of Eric Church’s sentiments about cold beer and the man:

Early Monday morning, til Friday at five

Man I work, work, work but I don't climb, climb, climb

Boss man can shove that overtime up his can

All I want to do is put a drink in my hand

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Tennessee Alcoholic Beverage chairman Bryan Kaegi resigns

Tennessee ABC puts the smack down on Jell-O shots

Can I bring my own wine into a restaurant in Tennessee?

What to Expect During Alcoholic Beverage Recalls

How Whisky Distillers use Peat Bogs to Create Unforgettable Flavors

Original author: William T. Cheek III
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Tennessee legislature serves up a host of new alcohol laws in 2018

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07.31.18

Sunday sales of alcohol at retail liquor stores and grocery stores stole the spotlight in the 2018 Tennessee legislative session. 

For industry insiders, however, the biggest news in 2018 so far has not been legislative.  Ask anyone who has renewed a liquor license renewal in the ABC’s new online system, RLPS. It is a memorable experience, to say the least. (In case you have been living under a rock, all new liquor license applications and renewals in Tennessee must be filed online through RLPS.)

Without further ado, here are the highlights from the 2018 Tennessee legislative session.

Sunday and Holiday Sales.  P.C. 783 legalized the sale of beer, wine and spirits at retail liquor stores starting April 22. Sales of wine at food stores start on Sunday, January 6, 2019. 

In addition, P.C. 783 – available at this link – legalized the sale of beer, wine and spirits on New Year’s Day, Memorial Day, the Fourth of July and Labor Day.  Retail liquor stores must be closed, and food stores cannot sell wine on Easter, Thanksgiving or Christmas.

Some legislators had quite a scare when they discovered that P.C. 783 actually authorized the sale of wine in food stores on Easter, Thanksgiving and Christmas.  Following a plethora of speeches about the evils of alcohol and the virtues of attending church service on religious holidays, they found redemption and banned the sale of wine on Easter, Thanksgiving and Christmas in a late amendment to P.C. 1010.

Vertical Driver’s License.  Tennessee became the 48th state to enact a vertical driver’s license for drivers under the age of 21.

Image title

Tennessee started issuing vertical licenses on July 1. 

The vertical license does not expire when the driver turns 21, which continues a long-standing problem with under-21 driver’s licenses in Tennessee.  Read more at our blog.

Open Carry.  We predict that new “open carry” law in P.C. 755 will be the sleeper hit of 2018 among industry insiders. Open carry allows beer and alcoholic beverages to be carried by patrons between different licensed premises, provided they are connected. Open carry also paves the way for multiple restaurants to share a common dining space, such as a food court. The law even allows restaurants to open a free-standing bar in a common area, like a food hall.  Read more here

P.C. 755 also gives the Tennessee ABC more discretion concerning barriers in outdoor areas.  For decades, the ABC has consistently required fencing or similar barriers to surround outdoor dining areas. As of press time, the ABC has not issued any guidance concerning what type of barrier will work for “reasonable efforts to ensure that a customer cannot leave the premises with an alcoholic beverage or beer…”  Stay tuned to Last Call for more details.

Samples.  For decades, Tennessee law has prohibited on-premises retailers such as restaurants and hotels from giving away wine and spirits.  Section 2 of P.C. 755 allows a licensee to serve a sample of wine – up to one ounce. Hotels are authorized to “provision” up to four 750 milliliter-or-smaller sealed bottles of wine or spirits. Although not entirely clear, we believe that the legislation limits hotels to giving away wine or spirits, as part of the room rental. We do not read P.C. 755 as authorizing hotels to sell wine and spirits by the bottle.

New Handgun Sign.  Beginning January 1, 2018, a 2017 amendment to T.C.A. § 39-17-1359 set a new standard for signage required to prohibit patrons from carrying firearms onto a premises that has a liquor license. The universal “no handgun” sign is no longer valid in Tennessee.

In order to prohibit patrons from carrying handguns, restaurants, hotels and other license holders must post new larger signs that state “NO FIREARMS ALLOWED” in letters that are at least 1” high and 8” wide. The new law also requires that the sign state “As authorized by T.C.A. § 39-17-1359.”  And if that’s not enough, the sign also has to include the universal “no handgun” sign, inside a circle at least 4” in diameter.

Here is a sample.

Image title

Keep in mind that law enforcement officers may still carry firearms, regardless of sign postings.

We see the new law as either a favor for some legislator’s friend who makes handgun signs, or, more likely, a way to make it more difficult and less appealing to prohibit carrying firearms where alcoholic beverages are consumed on-premises.

Fresh Start Act.  P.C. 793 clears the way for some convicted criminals to own establishments with liquor licenses. Previously, Tennessee law was clear: Persons convicted of a felony or a crime involving the sale, transportation or manufacture of alcoholic beverages could not own an establishment that holds a liquor license, if convicted within eight years of the date of the application.

The Fresh Start Act muddies the waters and sets forth criteria to consider when denying an application or refusing a renewal based on a criminal conviction.  Kudos to Tennessee ABC Director Clay Byrd and staff for promptly issuing guidelines for the Fresh Start Act process.  Here is a copy of the memo

LBD Tax Notice

In response to recent legislation, the Tennessee Department of Revenue issued a tax notice in February that clarifies that drink taxes can be included in menu prices or listed on the final bill.  The law now gives restaurants and bars the option to decide whether liquor by the drink sales taxes should be listed on menus, or on the final bill presented to the customer.  Read more at our blog.

Retail Liquor Store Moratorium.  As part of the legislative tradeoff for allowing Sunday and holiday sales of wine in food stores, the Legislature imposed a moratorium on the issuance of new retail off-premises liquor licenses. The Tennessee ABC is no longer issuing new retail liquor licenses. An applicant must either purchase an existing store or wait until the moratorium expires on July 1, 2021.

P.C. 783 sets up a process to transfer liquor licenses if a purchaser would like to move the location of the liquor store. The new location cannot be within 1,500 feet of an existing retail liquor store and must be inside the same city or county.

The moratorium requires that all Certificates of Compliance for a transfer of location contain specific language stating that no other liquor store is located within 1,500 feet.

The moratorium may lead to a secondary market for the value of retail liquor licenses. Because the moratorium is set to expire in less than three years, we do not see licenses building significant value in Tennessee.

10% Markup on Spirits.  P.C. 783 also imposed a 10% minimum markup on the price of spirits. The 10% markup parallels the provisions of the 20% markup, already in place for wine.

We see the 10% markup on spirits as a first step toward legalizing the sale of spirits in food stores. Note to Consumers: don’t hold your breath. You are not going to be Krogering for vodka any time soon.

23-7.  Our favorite legislative development in 2018 was a law that never came to pass. Serving liquor 23-7 stole the show during the 2017 legislative session.  The Diner in downtown Nashville and Scoreboard Bar & Grill in Donelson lobbied for special legislation that allows the restaurants to serve alcohol 23 hours a day, 7 days a week, beginning at 4 a.m. until 3 a.m.

After all the chatter in the industry about the unfairness of allowing two bars to serve late-night drunks, no one seemed interested in pursuing an expansion of the legislation in 2018. Perhaps the industry is wise enough to know that last call at 3 a.m. ain’t so bad.

The Legislature adjourning always reminds us of the popular David Bowie tune Modern Love: 

Gets me to the Church on Time

(Church on Time)

Terrifies me

(Church on Time)

Makes me party

(Church on Time)

Puts my trust in God and Man

Delivery.  P.C. 765 paves the way for delivery of beer, wine and spirits by grocery delivery services such as InstaCart, Shipt, Post-Mates and ye olde mom and pop delivery service … Amazon. The new delivery law waters down the requirements for drivers and generally makes licensing for delivery services significantly easier.  Previously, only retail liquor stores and prepared food delivery services could deliver alcoholic beverages. P.C. 765 expands the scope of delivery services to include delivery of alcoholic beverages with groceries.

Instead of some form of responsible alcohol sale and age identification training, delivery service licensees only have to show that drivers are 21 or older, passed a background check indicating no felony convictions in the last 5 years, or any crime involving the sale or distribution of alcohol within the past seven years, and hold a valid driver’s license. The delivery service license fee is based on the number of delivery drivers. 

Perhaps most important is the provision allowing independent contractors to deliver. This allows an Uber-type arrangement, where random drivers respond to Internet delivery services to rush alcohol to someone’s home.

Under prior law, customers could order alcoholic beverages through apps such as Drizy, but delivery was made by employees of retail liquor stores who are trained as certified clerks.

P.C. 933 requires that delivery services only deliver to the physical address placed with the original order. Although delivery can only be made after checking the recipient’s age, there is no requirement that the delivery be made to the person who originally placed the order. All you need is one 21-year-old with an ID to deliver alcohol to a bunch of minors at a party. And with untrained Uber-type drivers delivering orders …oh well, we digress.

Local Option.  Under current law, only cities or towns with populations of more than 925 can authorize manufacturing, storage, distribution and sale of alcoholic beverages by local option.  P.C. 692 and 891 create exceptions to the minimum 925 population, allowing Etheridge and Cedar Hill to hold referendums to allow on and off-premise retail liquor sales. 

Storage.  P.C. 933 specifies that retailers can only store beer on the premises where beer will be sold.  Apparently, someone had the bright idea to self-wholesale beer for multiple stores, which is now prohibited.

Collegiate Sports.  As the dog days of summer drag on, one thing continues to inch closer – football. Fans of Middle Tennessee State University and Tennessee State University should be particularly excited about the 2018 football season. P.C. 1010 clears the path for authorizing the sale of alcohol at MTSU and TSU sporting events.

Sneaking alcohol into school sporting events is a time-honored tradition for co-eds and adults alike. Universities are beginning to capitalize on the lucrative revenue stream available from the sale of alcohol, which was generally prohibited under the guise of student safety. Indeed, seven Power Five Conference Schools – Texas, West Virginia, Minnesota, Maryland, Syracuse, Miami and Louisville, already sell beer at home games.

Because Western Kentucky University, another USA Conference member, also allows alcohol sales at sporting events, MTSU should not have an issue with Conference approval. As of press time, there was insufficient information concerning whether TSU must first obtain approval from the Ohio Valley Conference. For all those Vol fans out there, the Southeastern Conference currently does not allow any school to sell alcohol at school-sponsored sporting events.  P.C. 1010 only applies to facilities in Davidson and Rutherford counties.

Distilleries. P.C. 1027 clarified that samples served and beverages sold for consumption at the distillery are not subject to the 15% privilege tax. The legislation reverses an Attorney General Opinion finding that distiller’s retail sales are subject to the 15% privilege tax. The legislature clarified that aged whiskey barrels are not subject to property taxes, also overturning a Tennessee Attorney General opinion to the contrary.  P.C. 717 expands storage options for distilleries, allowing distilleries to store in adjacent counties, as well as any county that is authorized manufacturing. P.C. 650 allows manufacturing in Lenoir City.

Premier Type Tourist Resorts.  The following premier type tourist resorts were approved, allowing on-premises consumption of alcoholic beverages:

Pine Creek Golf Course in Wilson County Capitol Theatre in Greeneville Gaylord Springs Golf Links in Nashville Whitestone Country Inn in Kingston National Museum of African American Music in Nashville (Opening 2019) The Church @ 117 in Coffee County Drafts and Watercrafts in Franklin County The Caverns in Grundy County South Jackson Civic Center in Tullahoma Tellico Village in Loudon County Wildwood Resort & Marina in Granville 1892 Restaurant in Williamson County Leipers Fork Market in Williamson County Marblegate Farms in Blount County Blue Mountain Mist Country Inn & Spa in Sevier County Amis Mill Eatery in Hawkins County Shelly Belle’s in Claiborne County Oasis Pizza Bar in Claiborne County

Special credit goes to our summer associate and UT law student James Nelson for all his hard work on this project.


Click here to learn more about Waller's alcoholic beverage team.

Original author: William T. Cheek III
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Duncan Liquor Law - July 2018

Duncan Liquor Law Letter - July 2018

Read Duncan Liquor Law Letter

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The biggest problem with Tennessee's new vertical under-21 license

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Category: underage drinking, driver's license, under-21

07.10.18

With much media fanfare, Tennessee introduced a new silver bullet for carding – a vertical driver’s license that is mandatory for anyone under the age of 21. Problem is, the vertical driver’s license does not automatically expire when the driver turns 21.

In our humble opinion, flipping the orientation of the license dodges the real problem. Too many people with under-21 driver’s licenses are old enough to drink. The question has to be asked: why have an under-21 driver’s license if it can legally be used to purchase alcohol?

The Good News

Effective July 1, 2018, every person under the age of 21 that obtains a driver’s license will be issued a vertical ID: 

Image title

A copy of a sample vertical driver’s license is attached Vertical Driver License Example.jpg.

A copy of the new law, P.C. 388, is here. vertical license act.pdf

We have to admit that the vertical driver’s license is hard to miss.  It screams at you – “I am under 21.”

We also applaud the state for continuing to include Red Box ID technology, which allows a server or bartender to instantly determine when a person turns 21 by simply reading the date in red under the photo.  We have previously extolled the virtues of Red Box ID, which requires no math. 

The Problem

Just like the previous under-21 driver’s license, the vertical ID is not required to expire when the person turns 21. In the example ID, “Nick Sample” turns 21 on February 11, 2021, but his under-21 driver’s license does not expire until July 2, 2025.

For nearly 3-and-a-half years, Nick Sample will be able to present his under 21 driver’s license and legally be served an alcoholic beverage.

Using Nick’s under-21 ID.

To drink.

How hard would it have been for the state to require that alcohol cannot be served to a person with an under-21 driver’s license, regardless of the expiration date?

This would require Nick Sample to go get a new driver’s license when he turns 21, but that becomes his choice. Nick decides whether he wants to spend eight bucks to get a new driver’s license and be able to drink. If Nick doesn’t want to drink, he can continue to use the under-21 driver’s license to drive his car.

That would be too logical.

All this flipping around of driver’s licenses brings to mind the Diana Ross hit, “Upside Down.”

Upside down

Boy, you turn me

Inside out

And round and round

We thank our Summer Associate extraordinaire James Nelson for cleverly obtaining a copy of the sample driver’s license and his assistance researching this post.

Original author: William T. Cheek III
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Can I buy alcohol on July 4 in Tennessee?

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Category: beer, wine, wine in grocery stores

06.29.18

Can I buy beer, wine and spirits on Memorial Day, July 4 and Labor Day?

Summer is upon us and we hear that burning question: Can I buy alcohol on holidays at Tennessee liquor and grocery stores? Yes and no.

Here are the facts. The law recently changed to allow liquor and grocery stores to sell beer, wine and spirits on many federal holidays, including:

New Year’s Day Memorial Day July 4 Labor Day

No more stocking up on Friday and Saturday before a big summer holiday weekend, like this upcoming Memorial Day. You can buy your wine and spirits on both Sunday and Monday.

Alcohol still cannot be sold on Easter, Thanksgiving and Christmas. You are supposed to be at church or at home with family, not boozing it up.

To make things more confusing, grocery stores cannot sell wine on Sundays until next year, beginning January 6, 2019.

Holiday hours for wine at liquor and grocery stores are 8 am until 11 pm, except Sundays, when stores cannot open until 10 am. Keep in mind that hours for beer sales vary from city to city, with many selling beer starting at 6 am.

Surf’s up and Madonna’s smash summer song “Holiday” from 1983 comes to mind:

Everybody spread the word

We're gonna have a celebration

All across the world

In every nation


Click here to learn more about Waller's alcoholic beverage team.

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Can I Sell Sake in My Grocery Store in Tennessee?

Can I bring my own wine into a restaurant in Tennessee?

Tennessee Sunday alcohol sales: What you need to know

New Tennessee open carry law is gamechanger for many restaurants, hotels

Restaurants and hotels get the green light to give away alcohol

Original author: William T. Cheek III
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Can I buy alcohol on Labor Day in Tennessee?

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Category: beer, wine, wine in grocery stores

06.29.18

Can I buy beer, wine and spirits on Memorial Day, July 4 and Labor Day?

Fall is upon us and we hear that burning question: Can I buy alcohol on holidays at Tennessee liquor and grocery stores? Yes and no.

Here are the facts. The law recently changed to allow liquor and grocery stores to sell beer, wine and spirits on many federal holidays, including:

New Year’s Day Memorial Day July 4 Labor Day

No more stocking up on Friday and Saturday before a big holiday weekend. You can buy your wine and spirits on both Sunday and Monday.

Alcohol still cannot be sold on Easter, Thanksgiving and Christmas. You are supposed to be at church or at home with family, not boozing it up.

To make things more confusing, grocery stores cannot sell wine on Sundays until next year, beginning January 6, 2019.

Holiday hours for wine at liquor and grocery stores are 8 a.m. until 11 p.m., except Sundays, when stores cannot open until 10 a.m. Keep in mind that hours for beer sales vary from city to city, with many selling beer starting at 6 a.m.

Surf’s up and Madonna’s smash summer song “Holiday” from 1983 comes to mind:

Everybody spread the word

We're gonna have a celebration

All across the world

In every nation


Click here to learn more about Waller's alcoholic beverage team.

Subscribe Now!

Can I Sell Sake in My Grocery Store in Tennessee?

Can I bring my own wine into a restaurant in Tennessee?

Tennessee Sunday alcohol sales: What you need to know

New Tennessee open carry law is gamechanger for many restaurants, hotels

Restaurants and hotels get the green light to give away alcohol

Original author: William T. Cheek III
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Hospitality Law Update 2018, Vol. I

Hospitality Law Update - 2018 - Vol.-I Hospitality Law Update - 2018 - Vol.-I

With the 2018 regular legislative session underway in Kentucky, there is certainly the potential for hospitality law to experience significant change as it has for the last several years. HB 136 is one of the pending bills that could have the biggest impact for at least one segment of the hospitality industry; It would relieve some administrative burden on the still rapidly expanding microbrewery industry. The biggest potential change, however, comes from a new proposed regulation by the Department of Alcoholic Beverage Control (“ABC”), 804 KAR 9:051, to repeal the regulations regarding quota retail licenses. The effort to repeal the quota licenses now has the interest of legislators, and that will likely see discussion in the General Assembly.

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Restaurants and hotels get the green light to give away alcohol

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Category: free samples, wine, beer, restaurants, hotels

06.13.18

Generations of restauranteurs and hoteliers have been told they cannot give away liquor. Since liquor by the drink was originally adopted in Tennessee in the late 1960s, it has been illegal to give away wine or spirits at any restaurant, hotel, entertainment venue or other on-premise outlet.

No more.

P.C. 755 allows any liquor by the drink establishment to serve a complimentary sample of wine.  TCA § 57-4-203(3)(2)(B) now provides that patrons can be given up to a one-ounce sample of wine.

The law is not clear about giving away more than one sample. The idea, as we see it, is you can pour a taste of wine to a customer, to see if he or she likes it. Can a customer preview more than one wine?  We do not believe that the law is intended to allow a customer to knock back a flight of 4 different wines, effectively allowing four ounces of wine to be given away.  Nor do we think it is legal to pour 4 one ounce “samples” of the same wine. 

As of this post, we have not heard of the ABC taking a position on the new law.

Keep in mind that you can give away beer until the cows come home. The law allows you to serve free beer. You cannot give away samples of spirits.

Subsection (A) of the new law also allows a hotel to provide up to four 750 milliliter or smaller complimentary sealed packages of wine or spirits. Please note that this provision is specifically available only to hotels. No other liquor by the drink licensee may give away bottles of wine or spirits.

The full text of P.C. 755 is available at this link.

Chili Peppers, the Red Hot kind, come to mind:

I'm a low brow but I rock a little know how
No time for the piggies or the hoosegow
Get smart get down with the pow wow
Never been a better time than right now
Give it away give it away give it away now

<iframe width="560" height="315" src="https://www.youtube.com/embed/Mr_uHJPUlO8" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>

Photo By Narek75 - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=46403502

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Can I Sell Sake in My Grocery Store in Tennessee?

Can I bring my own wine into a restaurant in Tennessee?

Tennessee Sunday alcohol sales: What you need to know

New Tennessee open carry law is gamechanger for many restaurants, hotels

Can I buy alcohol on holidays in Tennessee?

Original author: William T. Cheek III
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Can I buy alcohol on holidays in Tennessee?

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Category: beer, wine, wine in grocery stores

05.26.18

Can I buy beer, wine and spirits on Memorial Day, July 4 and Labor Day?

Summer is upon us and we hear that burning question: Can I buy alcohol on holidays at Tennessee liquor stores?  Yes and no.

Here’s the facts.  The law recently changed to allow liquor stores to sell beer, wine and spirits on Sundays and many federal holidays, including:

New Year’s Day Memorial Day July 4 Labor Day

No more stocking up on Friday and Saturday before a big summer holiday weekend, like this upcoming Memorial Day.  You can buy your wine and spirits on both Sunday and Monday.

Same rules apply to wine at grocery stores.

Alcohol still cannot be sold on Easter, Thanksgiving and Christmas.  You are supposed to be at church or home with family, not boozing it up.

Surf’s up and Madonna’s smash summer song “Holiday” from 1983 comes to mind:

Everybody spread the word

We're gonna have a celebration

All across the world

In every nation

Subscribe Now!

Can I Sell Sake in My Grocery Store in Tennessee?

Can I bring my own wine into a restaurant in Tennessee?

Tennessee Sunday alcohol sales: What you need to know

New Tennessee open carry law is gamechanger for many restaurants, hotels

Restaurants and hotels get the green light to give away alcohol

Original author: William T. Cheek III
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Duncan Liquor Law Newsletter - May 2018

Duncan Liquor Law Letter Part Two - May 2018

Duncan Liquor Law Letter Index - May 2018

Read Duncan Liquor Law Letter

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New Tennessee open carry law is gamechanger for many restaurants, hotels

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Category: beer

05.18.18

Among the many liquor laws passed this legislative session by the Tennessee General Assembly, one of the biggest changes, in our humble opinion, is the new Open Carry law.  P.C. 755 allows restaurants, hotels and other liquor-by-the-drink establishments to serve alcohol into common areas and allow adjacent restaurant patrons to bring alcoholic beverages into their restaurant.  You can now walk between restaurants with your cocktail, glass of wine or mug of suds. 

READ:  P.C. 755 Open Carry Legislation in Tennessee

How does it work?  First, the restaurants must be "contiguous," our fancy lawyerly term for connected.  For example, a common outdoor patio or interior dining space may connect two restaurants, making them “contiguous.” 

In order to take advantage of the new open carry law, the ABC advises that establishments must first file an application to expand the licensed premises to include the adjacent restaurant.  If additional space, such as a common patio or courtyard are added in order to connect the two restaurants, the application must also include the new common space.  Applications must be accompanied by a $300 filing fee and permission to use any additional space. 

The law requires that restaurants use branded cups, so ABC agents can determine where folks purchased their alcoholic beverages.  We see this as primarily a means to track sales to minors and intoxicated persons. 

The open carry law does not work if there is any sort of gap between the two restaurants, such as a public street.  The restaurants must be connected in order to enjoy the open carry privileges. 

We see the new law working especially well for multiple restaurants that share a common space, such as a food court in a mall or several restaurants that connect to a common patio. 

Normal rules about fencing patios to prevent guests from leaving with an alcoholic beverage still apply.  Restaurants will also be responsible to ensure that patrons do not leave common spaces with an alcoholic beverage.

The new law specifically includes beer.  We suspect that most beer boards will want some sort of notice or new application before allowing beer to be carried between two establishments.  In addition to applying with the ABC, we encourage restaurants to seek approval from their local beer board. 

All this walking around with a beer makes us think of a line from our favorite Hank Williams, Jr. tune, There’s a Tear in My Beer:

"I’m gonna keep drinkin’

Till I can’t move a toe

And then maybe, my heart won’t hurt me so."

P.C. 755 also contains a provision that could be interpreted as allowing restaurants to expand into additional areas, such as parking lots or adjacent fields. We believe the language does not create any new rights for restaurants to expand. It merely states an unwritten policy that has been in effect for years. A restaurant can have an exterior patio, provided it is properly fenced, for example.

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Can I Sell Sake in My Grocery Store in Tennessee?

Can I buy alcohol on holidays in Tennessee?

Restaurants and hotels get the green light to give away alcohol

Original author: William T. Cheek III
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Direct Shipping Allows Visitors to Send Home the Kentucky Bourbon Experience

Direct Shipping Allows Visitors to send home Kentucky Bourbon Experience

It's been an exciting week for Kentucky's distillers with the passage of HB 400, legislation that allows distillery visitors to purchase alcohol and have it shipped to their homes. Visitors can also participate in "club" programs in which the distillery may ship products to users in regular intervals.

Today, The Bourbon Review features an update from McBrayer Member Stephen G. Amato on HB 400 and the passage of quota deregulation measure SB 110 under their section "Bourbon without Borders." Read it here.

Commentary provided by 

Stephen G. Amato focuses his practice in the areas of hospitality law, civil litigation, employment law, and administrative law, and is located in the firm's Lexington office. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. or (859) 231-8780, ext. 104.

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Tennessee Sunday alcohol sales: What you need to know

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Category: retail sales, wine in grocery stores, liquor stores

04.11.18

It appears we are just days away from the Sunday sale of wine and liquor in stores across Tennessee.

With everyone eagerly inquiring, “When can I buy wine on Sunday?," folks aren't really talking about the new restrictions imposed on retail stores.  We will break down the details for you.

Retail liquor stores can now start selling wine on Sundays at 10 a.m. The first day of sales begins on Sunday, April 22. 

However, grocery stores cannot start selling wine until 10 a.m. on January 6, 2019.  The legislation gives a decided advantage to retail liquor stores by giving liquor stores a head start on Sunday sales.

In addition to Sunday sales of wine, retail liquor stores will be able to sell spirits, beer and any other item allowed to be sold by a retail liquor store.  On Sundays.  

Sunday sales brings to mind Joan Osborne’s classic One of Us:

What if God was one of us?

Just a slob like one of us

Just a stranger on the bus

Tryin’ to make his way home?

The scriptures tell us that God can make wine out of water, so we know at least one person — or deity in this case — that was not waiting for the new law to pass to buy wine on Sunday.

We see Sunday sales of spirits and the ability to immediately sell wine on Sundays as part of the compromise offered by grocery stores for selling wine on Sundays.  Folks that followed the initial passage of the wine in grocery store law, which we affectionately call WIGS, remember that the final bill was an ugly compromise, where all parties sacrificed.

Holiday Sales

The legislation also changes days when wine and spirits cannot be sold at liquor stores and eliminates holidays for grocery stores. Prohibiting sales on holidays has been particularly confusing to consumers and grocers. The bill ends the confusion by allowing wine to be sold by grocery stores on every holiday, including Christmas. Three years ago when WIGS passed, who would have imagined Tennesseans Krogering for wine on Christmas Day, 2018.

You can now buy beer, wine and spirits on Labor Day, New Year’s Day and the Fourth of July at your favorite liquor store. You still cannot buy beer, wine or spirits at liquor stores on Thanksgiving and Christmas. The legislation adds Easter to the list of holidays when liquor stores must be closed.

Minimum Markup on Spirits

The Sunday sales legislation also introduces a 10 percent minimum markup on the price of spirits.  With the exception of the amount, the minimum markup on spirits mirrors the existing WIGS law imposing a 20 percent minimum markup on wine, including the amounts of fines, criminal penalties and injunctive relief.

We see the minimum markup on spirits as laying the foundation for legalizing the sale of spirits in grocery stores, too.  Imposing a minimum markup was critical to the original WIGS deal.

Moratorium on New Liquor Stores

The Sunday sales compromise also imposes a moratorium on issuance of new licenses to retail liquor stores.  There is an exception that allows new licenses to be issued for jurisdictions that approve of retail liquor stores by local option, or for any applicant with a pending application as of April 20, 2018.

The legislation sets up a process for transferring existing licenses.  We wonder if imposing a moratorium on new licenses and setting up a process for transferring licenses will create value in a retail liquor license.  In many states, limiting the number of licenses creates a market for purchasing liquor licenses.  Licenses are worth hundreds of thousands of dollars, or more, depending on the limitations and demands for licenses in a particular city or state.

Industry members generally agree that WIGS significantly reduced the value of retail liquor stores.  Many owners have seen a dramatic drop in the valuation of their businesses.  Given the decrease in valuation, will the moratorium on new licenses create any additional value in existing licenses?

The moratorium on new licenses and the transfer process expires on January 1, 2021.  At that time, new licenses can be issued and the ordinary transfer process kicks back in.

Inventory Liquidation

The legislation also provides some relief to retail liquor stores that close their doors.  Under current law, a retail liquor store can only sell its inventory back to wholesalers.  Wholesalers are required to repurchase “saleable” inventory and can impose restocking fees.  In practice, retail liquor store owners that close can be forced to accept devastating losses, particularly since wine inventory is often deemed not saleable by wholesalers.

The new law allows a closing store to hold a 30-day going out of business sale.  The store can price inventory as low as 10 percent below wholesale cost.  The law specifically authorizes a licensee to keep any product that is not sold, for personal consumption.  This has been the practice for years, although it has not been specifically authorized by any law.

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Original author: William T. Cheek III
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Duncan Liquor Law Newsletter - April 2018

Duncan Liqour Law Newsletter - April 2018

Duncan Liqour Law Newsletter - April 2018

Read Duncal Liquor Law Letter

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The tax man cometh — and he's thirsty

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Category: Tennessee Department of Revenue, drink prices, drink menu, Alcoholic Beverage Regulations

03.30.18

Lots of folks have been asking of late, “Do I have to show taxes in drink prices?”

The Tennessee Department of Revenue recently clarified that including taxes in drink prices is optional.  Previously, the state required that menu prices include both liquor by the drink and sales taxes.

The law now gives taxpayers the option to include taxes on the final bill to the customer, instead of in the sales price listed in menus.

A copy of the notice from Revenue is included here. LBD Tax Notice.pdf

Please keep in mind that price schedules should still contain all taxes, including both liquor by the drink and sales taxes. 

If menu prices do not include taxes, Revenue advises that the menu must state that the “15% LBD tax and sales taxes will be included on the final bill.”

See our blog post concerning price schedules here.

The notice clears up a long-standing dispute we have had with Revenue over taxes.  We have always thought that Revenue lacks statutory authority to require that taxes be included in drink prices on menus. 

There is this pesky American thing about free speech.  We love Metallica’s satirical take on freedom in Eye of the Beholder:

Independence limited

Freedom of choice

Choice is made for you, my friend

Freedom of speech

Speech is words that they will bend

Freedom no longer frees you

Doesn’t matter what you see

Or into it what you read

You can do it your own way

If it’s done just how I say

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Original author: William T. Cheek III
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Gov. Haslam taps newest ABC Commissioner

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Category: abc, Alcoholic Beverage Commission, Tennessee Alcoholic Beverage Commission, Ashleigh Harb Roberts

03.23.18

This week's Tennessee Alcoholic Beverage Commission meeting featured a new face up front. 

Ashleigh Harb Roberts is the new Commissioner for the Middle District of Tennessee.  Commissioner Roberts replaces Commissioner Kaegi, who resigned in December 2017 and we blogged about on Last Call

Commissioner Roberts joins Commission Chair Richard Skiles, who we blogged about here and long-term Commissioner John Jones, East Tennessee Commission Member.  The Commissioners are appointed by the Governor and meet on a monthly basis to conduct ABC business.

Commissioner Roberts is a lawyer, having served as deputy legal counsel to Gov. Haslam.  She is a Vanderbilt Law grad, a self-described fan of red wine and a mother to five young children, including quadruplets.  Married to Gabe Roberts, chief legal officer of the Tennessee Division of Finance and Administration’s Bureau of TennCare, both were recognized as members of the 40 Under 40 class in 2016 by the Nashville Business Journal.

Reminds us of Beyoncé’s Run the World:

Girls we run this motha, girls

Who run the world?

Girls

This goes out to all my girls

That's in the club rocking the latest

Who will buy it for themselves

And get more money later

In other ABC news, the next two ABC Meetings were set:

            Thursday, April 26 at 11 a.m.

            Thursday, May 24 at 11 a.m.

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Duncan Liquor Law Letter - March 2018

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REGULATORS INVESTICATE CALIFORNIA WINERIES
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Can I bring my own wine into a restaurant in Tennessee?

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Category: brown bagging, wine in restaurants, ABC, Alcoholic Beverage Commission

03.09.18

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Here's an oft-repeated question: can I "brown bag" — bring my own wine —  in a restaurant, hotel or bar that holds a liquor license in Tennessee?

Surprise, surprise — yes, you can.  In an unusual twist of Tennessee liquor laws, it is legal to brown bag into a restaurant, bar or club that holds a liquor-by-the-drink license.  However, it is still ultimately up to the owner to decide whether customers can bring in their own beer, wine or spirits. 

Brown bagging raises numerous questions:

Can a server uncork a bottle of wine for a customer?  Can the server provide glassware?  Once opened, should a server pour wine into a glass?  Can the server bring in an ice bucket and chill the wine or champagne?

The Tennessee Alcoholic Beverage Commission will look at control when determining whether a restaurant has violated the law concerning brown bagging. As with so many other liquor “laws,” none of the laws concerning what a restaurant can do with brown bagged wine are actually written down somewhere. 

We believe it is safe for a server to uncork a bottle of wine and provide glassware.  This shows very little control over the wine. 

When the server pours the wine, however, we believe the server may be exercising too much control over the customer’s wine.  We recommend that customers pour their own wine, in order to avoid stepping over that unwritten line of what is legal, and what is not. 

Setups are recognized as part of standard services for brown bagging.  A server can provide things like glasses and ice.  Mixing drinks, pouring wine and other bartending services fall outside the scope of what is generally accepted for brown bagging. 

We find ourselves singing Nickelback’s “Bottoms Up”:

So grab a Jim Beam, JD, whatever you need.

Have a shot from the bottle, doesn't matter to me.

'Nother round, fill 'er up, hammer down, grab a cup, bottoms up!

Although brown bagging spirits is legal in Tennessee, the ABC has a strong policy against allowing bottles of spirits in a liquor-by-the-drink establishment.  The ABC has indicated that it will cite a restaurant or bar owner if it sees a bottle of spirits on a table. 

We encourage owners to ban brown bagging of spirits.  There is nothing in the law that says that a liquor-by-the-drink establishment has to allow any form of brown bagging.  You can clearly decide to allow brown bagging wine, but not spirits. 

Tennessee law also allows an owner to charge corkage for brown bagging.  Although the law is not entirely clear, we believe that liquor-by-the-drink and sales taxes have to be paid on corkage. 

If all this seems terribly confusing, it is very simple to have a black-and-white rule.  You can prohibit brown bagging.  Nothing stops you from prohibiting customers from bringing their own alcoholic beverages into your establishment.  It is your restaurant, it is your liability, and ultimately, it is your decision.

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Original author: William T. Cheek III
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