Alcohol

A Food Fight Over Virginia Liquor Laws

It's time for Virginia's restrictive regulation of alcohol sales to go.

|

For decades, Virginia has forced bars and restaurants in the commonwealth to jump through a costly and pointless hoop. It's time to give them a break.

The antiquated rule requires establishments to make up at least 45 percent of their revenue from food and nonalcoholic beverages. On top of that, they have to bring in at least $4,000 a month in food sales, and half of that must be from "substantial entrées."

Restaurateurs (along with caterers and private clubs) have not been happy with these requirements—and shouldn't be. The rules impose a huge paperwork burden. Every year the establishments have to submit a Mixed Beverage Annual Review to the state proving they're in compliance. They also have to submit an inventory list of all the booze they have on hand at the end of the year.

This is irksome enough. But now restaurants are feeling squeezed and discriminated against. The rise of microbreweries and brew pubs has introduced another competitor class to the marketplace. Recently Virginia Beach exempted craft breweries from the food-ratio rule.

You might think the food-beverage ratio rule helps curb drunken driving, public inebriation, and other social ills. In fact it might do just the opposite: Because the ratio is based on gross receipts, it creates an incentive to sell cheap booze. As state Sen. Bill DeSteph points out, a restaurant that sells a $30 martini has to sell $25 worth of food to offset it.

Cheap drinks, on the other hand, make it easier to meet the state's ratio. Cheap drinks also make it easier to get drunk fast. And what a restaurant loses in profit margin on each individual drink, it can always make up on volume.

(If you think the food-beverage ratio requirement is questionable, you should take a look at the state's rules governing happy hours. For a long time, a joint could not announce drink discounts anywhere except inside its own doors. In 2010 the state deigned to let restaurants advertise happy hours on a sign attached to the exterior, so long as the sign was 17 inches by 22 inches. Two years ago the state finally let restaurants advertise happy hours on their websites and in social and traditional media outlets. But it still limits what they can say: "Happy Hour 4-7" is acceptable, but "discounted margaritas," "beer and wine specials daily" and "Thirsty Thursday" are not, because you can't use the word discount or name specific types of beverages or use alcohol-related promotional phrases. Other than that, you can say whatever you want!)

In addition to the misguided public-safety rationale, there is another, less lofty, theory to explain the food-beverage ratio: It might have started out as a way to protect restaurants from competition. Forcing sellers of mixed drinks to sell a large amount of food closes the market to saloons where people go just to drink. That's just a guess—but it would be well in keeping with other market-entry barriers in the commonwealth, from the Certificate of Public Need for medical facilities to the various occupational licensing rules that make it harder to start a skilled-trade business.

DeSteph has introduced legislation to give restaurants some relief. It would lift the rule for any establishment that sells more than $10,000 worth of food. Those selling less than that would face a ratio of only 35 percent. That's progress.

Ideally, the food-ratio rule would disappear altogether. There's little evidence that it serves an important public purpose—or that the same public purpose is not served equally well by other policies, such as tough drunken-driving laws. All the food-ratio requirement does is make a lot of work for restaurants.

Well, and for ABC bureaucrats too. Virginia's Department of Alcoholic Beverage Control has a friendly message for proprietors: "Your special agent is ready to help you avoid the costly consequences of not meeting the food-beverage ratio… Agents should be able to order a menu item anytime during your operating hours to ensure food sales are being conducted in the proper way… When your special agent arrives for his or her visit, be prepared to discuss various points of your business. Keep regular, accurate records on site, that are immediately available for review."

They're from the government, you see—and they're here to help.

This column originally appeared in the Richmond Times-Dispatch.

NEXT: Soliciting Sex Could Lead to 10 Years Prison in Connecticut

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. WTF is a “substantial entree”? No vegan food allowed?

      1. I wonder if a big salad counts. You know, a salad, only bigger, with lots of stuff in it.

    1. Whatever the ABC feels it is. Which is part of the problem.

      1. Always Be Cunt?

    2. It keeps them from selling peanuts or bags of chips to get around the law.

      1. “So, is soup a meal?? What if you have crackers with it? A hearty matzo ball soup? Judges?”

        1. It’s like I’m talking to my Aunt Sylvia here.

        2. ” A hearty matzo ball soup” is barely food.

        3. 5.7 from the East German judge.

  2. I know of only one surefire method for convincing members of the Political Class to keep their noses out of what their ‘inferiors’ eat and drink. It’s called the guillotine.

    1. That escalated quickly.

      1. cut them off at the knees, only higher?

  3. Recently Virginia Beach exempted craft breweries from the food-ratio rule.

    That’s because hipsters. You don’t want to get in the way of anything that gets millennials out of their parents’ basements. Jesus, for a magazine called Reason.

    1. Hey, fuck you.

      We live in our parent’s attics as well, asshole.

      1. Is it a finished attic, at least?

        1. Does a craigslist futon and a poster of Nirvana count as finished?

          1. How much jizz is on the futon? And the poster?

            1. Mine? or…

              I think the usual amount.

          2. Yes, in fact I’d call it “game over”.

    2. My understanding is that the food ratio rule only applies to liquor sales, not beer and wine, so I am confused how this exception works…

      1. must puts lots of olives in the martinis & lots of celery in the bloody marys

  4. It seems like every article about a retarded bit of overregulation, particularly as it applies to food or drugs, is always about Virginia.

    1. Well, not every. The madness of extra taxes on sugary drinks (and non-sugary drinks that fall within the poorly-written laws) has not yet reached here. And we are pretty good on 2A.

      1. VA is the place where they wanted you to give a robot a blowjob in order to buy wine at the grocery store, right?

        1. Sounds like if libertarian Jesus wants to go where the sinners are, he’s going straight to Virginia.

        2. No. You can actually buy beer and wine at the self-check. I’m definitely middle-aged and look it and it has been years since anyone has actually carded me even at the state ABC store. Beer and wine can be sold at groceries, convenience stores, etc. Bottled liquor can only be sold at state run ABC stores, which used to be closed on Sundays (and may still be in some backwaters).

          1. Go to TN, you’ll get carded, I don’t care if you look 80. They card everyone, it’s sort of absurd.

            1. My guess is they have a law that if you don’t card you can be fined.

        3. That was PA, I think. They have even worse liquor laws there.

          1. I travelled to PA a while back and could not believe the fucking hoops I had to jump through to acquire alcohol at retail prices. What. A. Racket.

  5. “For decades, Virginia has forced bars and restaurants in the commonwealth to jump through a costly and pointless hoop. It’s time to give them a break.”

    Look, people aren’t just going to extort money from themselves and give it to the state, so there’s gotta be rulez and regulashunz. Reason obviously have gone back to hating the children and wanting the terrorists to win.

  6. And what a restaurant loses in profit margin on each individual drink, it can always make up on total sales volume.

    Right?

  7. “The antiquated rule requires establishments to make up at least 45 percent of their revenue from food and nonalcoholic beverages. On top of that, they have to bring in at least $4,000 a month in food sales, and half of that must be from “substantial entr?es”

    At least they aren’t required to report suspected prostitutes. Yet.

    1. I believe that the laws prohibiting serving of alcohol to loose women, prostitutes and known homosexuals are still on the books, though unenforceable. NB – actual discrimination against homosexuals codified into law.

      1. We can never have enough laws, Tonio, so we can’t get rid of that one no matter how stupid it is.

        1. “We might need it some day” is the argument for keeping anti-sodomy laws on the books. The real reason is that cowardly politicians are afraid of the blowback for repealing even the most antiquated nonsense – like that PA law that requires motor vehicles to stop every 100 yards to send up a warning flare.

          1. If I lived in PA and had a lot of time on my hands, I’d start driving around doing exactly that.

            1. providing blowback?

              1. Shooting off flares every 100 yards.

                1. In violation of BATFE regulations?

  8. Agents should be able to order a menu item anytime during your operating hours to ensure food sales are being conducted in the proper way… When your special agent arrives for his or her visit, be prepared to discuss various points of your business. Keep regular, accurate records on site, that are immediately available for review.”

    ?We do the work, you do the pleasure!?

    1. They’re going to pay for the food they order, right?

      1. It will be billed to the taxpayer, so yes.

    2. Look, we totally do no have too many unnecessary regulations. If not for this regulation, people would just die! We have to protect the children!

      1. And as Tonio mentioned, keep booze out of the hands of the gays.

  9. The rise of microbreweries and brew pubs has introduced another competitor class to the marketplace.

    Yes, but don’t decry the incremental progress. That will inevitably lead to the death of the food sales requirement, ie you will finally be able to operate a proper saloon here.

    Also, tasting rooms at breweries state-wide are exempted from the food sales requirement; they don’t even have to sell food, but they can only sell beverages made on-premises.

    Also, also you neglect to mention that the current food sales requirement incentivizes many restaurants to cook the books about food sales. All those nightclubs “open for lunch?” That’s simply to provide plausible cover that they actually do a lunch business. Also, the reason why the bar food is overpriced.

    Overall good article, Bart, but details need a bit of tweaking.

    1. No one needs 30 different kinds of beer.

      1. No one needs beer that tastes like peaches. Or pumpkins.

      2. high capacity bottles?

  10. OT, but I just gotta say this before my head explodes.

    I was talking to somebody yesterday about how we simply can’t afford all the things people like Sanders believe we’re somehow entitled to for free. Add up the free college and the free healthcare and the free housing and the free food and the free everything else and it adds up to about $21 trillion to give everybody for free all the free shit they’re entitled to. Which is more than the GDP of the entire country so it’s simply not mathematically possible.

    His reply? I’m an idiot. The GDP is what the private sector produces, which – duh – that’s why we need the government to pay for this stuff, because the private sector can’t afford it. The private sector only produces about $18 trillion, the government has a printing press so their production is infinite.

    We are so screwed.

    1. If all of you filthy one percenters making over 40K a year would just pay your fair share, like 90%, then this will all work. But noooo, you Kochtopus puppets are too greedy!

    2. #ekonomikz

    3. We all have those friends, Jerry. And many of them are otherwise nice people. But they are still idiots. And then there are the people who really do know better, but keep spouting nonsense like that so they can virtue signal.

    4. And did you take the 30 seconds to direct him to the calculation of GDP on wikipedia to explain that the expenditure method of calculation does in fact include government spending?

      It wouldn’t address the underlying foolishness, but it would least show him that he’s a moron talking to someone more knowledgeable, and should shut up before embarrassing himself further.

      For fun, try to get him to explain why counterfeiting is harmful.

      1. GDP = C + I + G + (Ex – Im)?

        So theoretically, the government can double the GDP just by raising taxes to 100 percent and spending it all.

        1. god dam people = cunts + intellectuals + gays + (Ex hippies – immigrants)

          1. now thatz some science stuff right there

  11. Sad to see the mighty fall.
    Started with “Sic semper tyrannis”, got whipped by the invaders from the north, and now pass laws like peanuts at a bar.

  12. But what about the children?

Please to post comments

Comments are closed.