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Latest updates for alcohol delivery by restaurants in Tennessee



Latest updates for alcohol delivery by restaurants in Tennessee

Mar 23, 2020

UPDATED: April 15, 2020

Tennessee Gov. Bill Lee extended the executive order allowing drive-thru, carry-out and delivery service of beer, wine and spirits for restaurants. Executive Order 27 extended Executive Order 17. You can do “to-go” and delivery sales of beer, wine and spirits until midnight April 30. Read the original order here.

Restaurants, limited-service restaurants and wine-only restaurants can sell take-out and deliver alcoholic beverages and beer. There is no additional license or permission needed to deliver.

Restaurants can use employees or third-party delivery services such as Postmates and Uber Eats to deliver alcohol. Delivery personnel are not required to have server permit cards or any special qualifications.

Keep in mind that if you are using a third-party delivery service, your restaurant remains liable for sales to minors, intoxicated persons or the violation of any other law.  A restaurant will not be able  to avoid liability by saying the Uber driver did it. 

Since issuance of the order, restaurants and bars have sprung into action across Tennessee to start delivering alcohol with food orders.

We urge folks to keep hustling during these difficult times and check Last Call for updates. The Tennessee ABC has posted FAQs here.

Here is our summary of the rules of engagement for to-go, curbside, drive-through and delivery:

1. Alcohol must be delivered with food. At least one item of food must be sold in every order containing alcohol. The amount of food required is not specified, but given the emergency nature of this order, we encourage restaurants not to play games and count lime slices as food, for example.

Licensees are still required to be responsible. Restaurants can set rules, such as one entrée per two single-serving margaritas. You can always require that customers order a meal or set a minimum dollar amount of food for deliveries.

2. Alcohol must be packaged in a container or bottle with a secure lid or cap. We read this rule to mean that the container must be closed. Closed is not the same as sealed. For example, a lid screwed on the top of a plastic jug is closed. Alcohol does not have to be sealed, meaning you do not have to attach seals like you would find on commercial products at grocery stores.

The ABC advises restaurants to “cover containers in a reasonable manner that would require the consumer to unpackage them for consumption.” For example, we believe a styrofoam container with a lid that does not have a straw hole will work. If all your lids have straw holes, tape the straw holes.

3. Bottles and cans of beer and wine can be delivered, including regular-sized wine bottles. No bottles of spirits or liquor. The ABC has clarified that it considers a single serving to be a beverage containing no more than 16 ounces of beer, nine ounces of wine, or four ounces of spirits, and no more than 16 ounces of total liquid in the serving container. In Bristol, Chattanooga, Knoxville, Memphis and Nashville, where local beer boards have specifically authorized carry out and delivery of beer, these limitations do not apply to beer having an alcoholic content of 10.1 percent by volume. Once properly registered for delivery with your city, growlers are fine in these cities and any other city that has specifically authorized carryout and delivery of beer. Read more about beer delivery here.

4. Restaurants must post a sign with the following notice: “No driver shall consume any alcoholic beverage or beer or possess an open container of alcoholic beverage or beer while operating a motor vehicle in this state.” Although the order is not clear, we advise folks to post the sign on the wall, with your liquor license.

5. Mandatory carding for deliveries. Sales cannot be made to under 21 or intoxicated persons. 

With a third-party delivery service such as Postmates, you should ensure that delivery personnel are properly trained for carding. Some delivery services are not set up to require carding.

Drivers do not have to physically touch an identification to verify age. Because orders are most likely paid in advance, online or via phone, there is no need for drivers to risk potential contamination and make physical content with the customer.

That said, drivers need to ensure that they properly ID. We encourage Redbox carding and closer scrutiny of all Redbox IDs.

6. Drivers must be at least 21 years of age and have a valid driver’s license.

7. Carry out and delivery of alcohol are limited to current operating hours, which is not defined. We advise folks to adhere to the normal sales hours for beer and alcoholic beverages.

8. You can deliver cocktails! As long as the package has a secure lid, we read the order as allowing delivery of margaritas, cocktails and other mixed drinks.

9. Single serving packages only. Although wine by the bottle may be sold, no other multi-serving containers are allowed, under Tennessee ABC guidance here. For purposes of single servings, the ABC says no more than 16 oz. of beer, 9 oz. of wine or 4 oz. of spirits in a container with not more than 16 ounces of total liquid. If your local beer board allows you to sell low gravity beer for carry-out or delivery in greater amounts, then you may do so for purposes of low gravity beer only.  Low gravity beer is less than 8% ABW or 10.1% ABV.

No more carafes of sangria or pitchers of margarita’s to go. You can sell multiple single-serving containers with a meal, although we continue to recommend moderation under this emergency order.

Mini bottles of spirits present a conundrum. State law prohibits the sale of spirits by the bottle. However, Governor Lee’s order specifically authorizes “single servings of alcoholic beverages.”

In our humble opinion, Executive Order 17 allows a restaurant to deliver mini bottles of spirits, provided it is clear that the mini bottle is intended for a single serving. We advise folks to securely tape or otherwise attach a mini bottle of spirits to the mixer. That way, it is abundantly clear that the two items - the container and the mini bottle - are intended to be a single serving. Do not play games and toss twelve mini bottles of tequila in a bag and consider yourself in compliance with the order.

10. Curbside and drive-through. The order does not specifically address curbside and drive-through, but given the intent of the order, we believe it is OK to deliver drinks curbside and through drive-through windows.

The ABC has also clarified that although beer, wine and spirits may be sold at curbside, restaurants cannot stage multiple alcohol deliveries at tables outside the restaurant’s licensed premises. We understand that it is convenient for multiple orders to be brought out for immediate pickup at curbside. Although this is okay for food, alcohol must stay inside the restaurant until the customer or delivery service arrives for pickup.

11. Alcohol must come from the restaurant’s inventory. A restaurant cannot buy or deliver alcohol from a retail liquor store, food store or another restaurant. You must purchase your alcohol from a wholesaler.

12. The executive order only applies to establishments licensed as full-service restaurants, wine-only restaurants and limited service restaurants by the Tennessee ABC. Hotels, caterers, premier-type tourist resorts, convention centers and other special license types cannot deliver or sell alcohol to-go under the executive order.

There are special delivery rules for beer in many cities where local beer boards have established specific guidelines. Here is the process for beer delivery. 

Please note that the rules for beer-only delivery are very different from delivery under an ABC restaurant license. To make matters confusing, you can deliver beer under your restaurant liquor license. We see local beer delivery as really benefitting breweries, hotels and other license types that do not hold an ABC restaurant, limited service restaurant or wine-only restaurant license.

13. Get your beer here. Restaurants do not need permission from their local beer board to deliver under the Governor’s order. If you are a brewery that does not hold a restaurant license, or another license type that would like to deliver beer, please see our post herefor details concerning how to register with your local beer board to deliver beer. Please note that this process does not allow delivery of wine or spirits. Please note that this process does not allow delivery of wine or spirits.

14. Restaurant dining rooms are closed. You cannot pour a beer or drink while guests wait on to-go orders. Food and beverage cannot be consumed on-premises under the order.

15. Collect sales tax. Restaurants do not collect the 15% liquor by the drink tax for all wine and spirits sold to go or for delivery, including bottles and cans of beer, wine and single-serve cocktails. You do have to collect sales tax. Here is the post from Revenue. (link to attached). If you have more tax questions, see our post here.

16. Delivery applies to restaurants statewide, but we urge folks to exercise discretion and not deliver to dry towns and counties. We suspect that the Governor did not intend for delivery to areas that have not approved of liquor-by-the-drink.

17. The Order expires on April 30, 2020. Although it is possible the Governor will extend delivery privileges, the Order expires by its own terms at midnight on April 30.

Click here for the full order.

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