Alcohol

Here's Why It's Dumb to Tell a Restaurant How Much Booze it Can Sell

Virginia and other states force receipts to equal a high percentage of food sales. That's foolish.

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In Virginia, where Founding Father George Washington famously distilled whiskey, momentum is growing to change a decades-old Virginia law that hurts restaurateurs who opt to sell liquor in the state.

Under the law, the state requires food and nonalcoholic beverage sales at restaurants to equal at least 45 percent of their gross sales of liquor and food. Today, the state touts this ratio as "paramount." Restaurateurs argue otherwise.

As the Virginian-Pilot reported this week, the basis of the law, first established in the late 1960s and amended in 1980, is baldly prohibitionist. Lawmakers, the paper reports, "didn't want saloons propagating across the state."

The law's also protectionist.

"The ratio lives on because of a powerful group of established Richmond restaurateurs," writes attorney C. Jarrett Dieterle. "They are quick to invoke the absolute horrors of bars and nightclubs dotting every Virginia street corner, alleging that repeal of the ratio would lead to an abundance of seedy, alcohol-infused, crime-infested neighborhoods." Dieterle rightly calls that "hooey."

Add, too, to the list of hooey that the law infringes on the rights of restaurant owners, and limits choice for consumers. And it's difficult to comply with, in that it's next to impossible for a restaurateur to predict how much food or alcohol customers might want consume.

The law is also discriminatory. In part, that's because it's based on the price that a restaurant sells its food and drinks. Last year, a Virginia restaurant and craft-bourbon bar that had been penalized under the law sued the state. The suit, by McCormack's Whisky Grill and Smokehouse, argues the law discriminates against businesses that sell costly high-end liquors and favors those who sell cheap spirits—since the law is based on dollar value of sales, rather than quantity of sales.

Unsurprisingly, the law has forced some restaurants to abstain from selling higher-end drinks. Restaurants like McCormack's that skirt the law face the suspension or loss of their license.

Virginia is hardly alone in enforcing such laws. Other states, counties, and cities around the country have similar rules in place. North Carolina law requires at least 30 percent food sales. Nearly two-thirds of Kansas counties require the same. And Gainesville, Fla. requires restaurants to generate at least half of their sales from food.

Last year, Rome, Ga. lawmakers proposed eliminating the city's 50/50 requirement—though only for the city-owned convention center, rather than for privately owned establishments. Nearby Alpharetta, Ga. rules effectively don't allow bars. The city's 50 percent requirement for food and alcohol sales—which had been 60 percent until being lowered in 2011—is intended "to ensure the city had no bars, where alcohol sales were primary."

Alpharetta recently made a creative change to the 50 percent rule for restaurants, adopting a law that sales from food trucks parked in front of restaurants could contribute toward a restaurant's required food sales. That may sound nice, but the law requires restaurants "to maintain sales records from each truck and submit a monthly report."

Such onerous recordkeeping and paperwork requirements like these are a necessary feature of the abysmal ratio laws. Maryland requires the submission of regular notarized reports to a county liquor board. And in Virginia, the law requires "restaurants that sell liquor must tally their receipts each year and prove 45 percent came from food sales."

But these requirements often don't stop at paperwork. Virginia orders restaurants to provide food menu items "anytime during your operating hours" as proof of their commitment to serving food. Inspectors who visit may test this out, and will "want to see food in your freezer and other food storage facilities." And if a restaurant that sells liquor operates a buffet, "[i]t is incumbent upon the licensee, if using food from a buffet to meet the food beverage ratio, that the buffet fare is actually consumed by a customer. You must be able to document this." How to document whether a patron actually visited a buffet is left unsaid.

The fight in Virginia has moved to the legislature. A coalition of Virginia restaurateurs, dubbed Fix the Mix, is pushing to change the law.

"In general, I don't like the government telling you how much food you should order or restaurants how much food they should sell," says state delegate Scott Taylor, who's pushing to change the law. "It's an unfair burden on these small businesses." Others in states with similar laws agree.

"Just imagine if any other industry operated this way; mandating a taxi driver must have 35% of their business come from airport pickups, or mandating a coffee/tea shop must have 40% of their revenue coming from tea sales or risk shutting down," says Greg Pulscher, who produces the Free to Brew podcast in North Carolina, in an email to me this week.

Rules that require bars or restaurants to tie alcohol sales to some magical percentage of food sales are stupid, outdated, or some combination of both. Such personal decisions are best left up to businesses and consumers alone.

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47 responses to “Here's Why It's Dumb to Tell a Restaurant How Much Booze it Can Sell

  1. Such personal decisions are best left up to businesses and consumers alone.

    This is so naive I can’t even. That’s chaos. People need a certain percentage of food while they drink to maintain the obesity levels that make America number one.

    1. USA!! USA!! US…..*catches breath*…A! *sits down, eats doughnut*

      1. Actually, I find nothing makes me gain weight more than alcohol.

        1. Huh. I’d like to find something that makes me gain alcohol more than weight.

  2. “”””where Founding Father George Washington famously distilled whiskey,”””

    And who ordered the crushing of the Whiskey Rebellion.

    1. But not in his backyard.

    2. Easy Peasy, DJF. In point of fact – Washington was clearly only concerned with crushing the untaxed and illegal distilleries. His own particular moonshining operation was an entirely unrelated item to this I am sure.

  3. If, someday, a diet that actually does resist camcer and extend lifespan is discovered, food laws in 2/3rds of the States will hold it illegal.

    1. My dream is that the key to the miracle you describe would be based on GMO tobacco. Healthy Smokes would allow you to live to be 200.

      Watching the anti-smokers still try to ban them would be fantastic.

      Waitresses and bartenders working in saloons would live to 300 because of 2nd hand health smoke.

  4. How are they supposed to know what customers will order?

    1. Magnets.

      1. Motherfucking magnets. How do they work?

  5. I go to a restaurant that doesn’t sell drinks at all, but they do have a very nice eight-dollar olive served in a gin and vermouth sauce. The orange juice is surprisingly expensive but it does come with a free shot of vodka. Stay away from the lime wedge appetizer, those come with free tequila.

    1. I had brunch at this place with a few other Reason commenters. I ordered a Jack and Coke, and it came garnished with a baby back rib. That counts as food, right? So I had 4 ribs for breakfast, I guess.

      1. I was just in Long Beach and San Pedro yesterday, looks like I’m going to be down there on business a lot in the near future. If this brunch spot is a place that commenters would like to visit again — or somewhere else in this neck of the woods — let me know, it may be a good chance to see everyone again.

        Are you thinking of going to the Reason weekend? Looks like you could ride your bicycle to it from where you live.

        1. They do make some nice cocktails at the Attic. Bloodies are pretty amazing too. Plus, it’s a 30 second walk from my apartment 🙂

        2. I actually have no idea where the reason weekend is. I think I’m supposed to email them or something. Same with the “lunch with the editor” thing.

          1. Ah. Terranea. Spent a few nights there around Christmas. Clear enough to see San Nicholas and Santa Barbara Islands.

            1. Just a stones throw from TRUMP National!!!!

              1. Now THERE’S a motherfucking brunch!

  6. Virginia has one of the most oppressive and firmly established alcoholic beverage control regimes. McDonnell tried to bust up the state store system and got totally denied. Gun-toting ABC employees rough up college students buying water bottles in Charlottesville, etc…

    I would love to see every piece of it undone and those people sent out to find actual productive jobs.

  7. Virginia has actually made reasonable progress in this policy area the past 5 years or so. They legalized interstate wine shipments, legalized the practice of bringing personal wine into restaurants, and loosened restrictions on craft breweries and distillery’s.

    1. This is all true and we have further to go —

      – Privatize the VA ABC System and allow private distribution
      – Allow BARS, REAL BARS to sell alcohol and not food if they want.

      One of the guys seeking the Republican nomination for governor owns and operates a distillery in Nelson County, VA.

      1. Wat? There are no bars in VA?!

          1. $15 potato skins.

        1. We have restaurants that have bars in them. That’s the closest we can get.

  8. Fuck food sales ratios. We have those in Minnesoda too. We do allow straight up saloons, but it is easier to get a liquor license if your food to booze ratio is high enough.

    I’m just tickled pink because we might finally be able to go to a liquor store on Sunday.

  9. RE: Here’s Why It’s Dumb to Tell a Restaurant How Much Booze it Can Sell

    You can’t have a nanny state unless The State nannies, and as we all know, the little people cannot make prudent decisions. It takes an army of bureaucrats and our beloved socialist slavers to tell us what to do and when to do it. Otherwise we would all be eating oil filters, swim with crocodiles, use blow torches to comb our hair, sleep with poisonous snakes, etc. We would all be dead or suffer immeasurably if it weren’t for the nanny state and our obvious betters looking out for us. Be grateful we have such an intrusive government.

  10. What they’re promoting in this case is a bill to lower the ratio to 25%.

    1. That’s a considerable improvement, even if it isn’t the perfection of dropping the whole dumb idea.

  11. Huh. The nanny state is being run by Puritans. Who’d a thunk it.

    1. They could be protectionists. The term “baptists and bootleggers” comes to mind.

  12. ” I’m sorry, President Jefferson, but if you go on ordering Chateau Lafite, every post house between Montpelier and the Capital will lose its license.”

  13. For being the cradle of American liberty Virginia is one seriously statist State.

    1. I hate the local restaurant and cigarette taxes. The transponder-only tolls too. Virginia is also the only state to regulate what kind of radio receivers you can have in your vehicle.

      They did finally reciprocate with my state on concealed firearms.

    2. More than some, less than others. I’m afraid it will get worse with how populated Northern Virginia is becoming with overpaid, over-educated, elitist DC government workers and contractors.

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  14. Come on out to Livingston, Montana. It’s got more bars per capita than anywhere else. Some of them have chips hanging on a rack behind the bar … does that count as food? Neptune’s Brewery has a sushi bar, and the Hiatt House has nothing but cigarette smoke to ingest. You gotta’ love a good railroad town bar. And then, there’s Glasgow, MT … a world unto itself … but I digress …

    The point is this: In Montana, people don’t need any stinking food getting in the way of their booze and drinking. Freedom rocks! If not for the archaic liquor licensing quota, it would be HEAVEN on earth.

  15. There is a alcohol/food law in Gainesville, GA, not Gainesville, FL. College would have been a lot worse otherwise.

  16. Am I the only one thinking that a restaurant should have a special like buy a $12 piece of toast and get a free glass of Johnny Walker?

  17. Drunk people don’t eat buffet food?

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