Monthly Archives: June 2013
This just in from the Tennessee Alcoholic Beverage Commission. Restaurants and bars may continue infusing drinks after July 1. There is an indefinite moratorium on enforcement and the ABC will not take action against a license until further notice.
More to follow as news continues to break.
Here is the official notice from Tennessee ABC Director, Keith Bell:
To All Interested Parties:
Although the process of manufacturing infused alcoholic beverages, not for the consumer’s immediate consumption, by and on the premises of a Tennessee Alcoholic Beverage Commission (TABC) licensee’s on premises liquor by the drink restaurant remain violations of the Tennessee Code and TABC Rules, the TABC has nevertheless determined it to be in the public interest that the regulatory enforcement of this prohibition be indefinitely suspended in order to formulate workable guidelines and definitions so as to gauge the growing and changing taste and desires of the consuming public.
E. Keith Bell, Attorney at Law
This week, Tennessee ABC Director Keith Bell issued a proclamation that threatened citations for any restaurant or bar that makes infused drinks after July 1, 2013.
We think the ABC is wrong about the law on this point and have previously blogged about the issue. We joined with attorneys for the Tennessee Hospitality Association to request that the ABC reconsider its position. A copy is here: Attorney Letter to Bell re Infusions (00931444).
Although many bars feature infused spirits, it is the ban on pre-mixing that we see as having the broadest impact on the industry. Based on our reading of Director Bell’s announcement, we are advising folks to stop pre-mixing drinks like sangria, margaritas and shooters.
Many bars pre-mix popular drinks and shooters to cut down on wait times at peak hours for crowd-pleasing cocktails. Think Cinco de Mayo. Bartenders regularly make margaritas a few days in advance, so customers do not have long waits for margaritas as they are ordered.
The infusion ban will undoubtedly hurt purveyors of high end cocktails. Even sangria is affected – anyone in the industry knows that sangria tastes better when it ages overnight.
Tennessee has become known as a destination for food and beverage connoisseurs. We see the infusion ban as a blow to purveyors of cutting edge cocktails that are drawing national attention to Tennessee.
The most common question we hear is how do you get a liquor license to sell alcoholic beverages at a restaurant or bar in Tennessee? Here is a short summary of how to navigate alcoholic beverage laws and obtain liquor permits for a restaurant or bar.
Tennessee requires two liquor permits to serve alcohol. One is from the state – for wine and spirits. The other is from the city – for beer. You have to file separate applications for liquor and beer permits and the process is different for each.
The good news is that there is no limit on the number of restaurant and bar licenses and you do not need to purchase a license in Tennessee.
The bad news is that both liquor and beer permits generally are not issued until local building codes officials have issued a certificate of occupancy. This puts considerable pressure near the end of the construction process, at a time when the restaurant or bar owner is trying to train staff, finalize menus and mange the completion of construction.
Tennessee Liquor License
The state ABC application process requires basic disclosure from individual or corporate owners and officers, as well as managers. The application requires a lease or other proof or legal right to sell alcohol at the premises, copies of corporate charter, a sales tax certificate and a copy of the TTB registration.
The fee to apply for the state alcoholic beverage permit is $300 and annual liquor license fees range from a few hundred dollars for a wine only permit to $4,000 for a bar that sells very little food. Cities impose an annual tax that is slightly less than the license fee.
Food service is required for most liquor licenses in Tennessee. The basic bar license requires 15% food sales, as compared to liquor sales. The ABC will inspect before issuing a license and requires at least a minimal kitchen and a food menu.
The ABC staff approves LBD licenses and applications do not come before the full Alcoholic Beverage Commission.
Applicants must obtain a $10,000 bond for full bar service, and the state is very particular about the form of the bond. Do not be surprised if your bond is rejected by Revenue. Revenue also accepts CDs in lieu of the bond.
All servers must be trained and hold ABC issued server permit cards. The ABC regularly fines restaurants and bars for servers that do not have current server permit cards.
The ABC recently implemented a requirement that all corporate officers and owners, as well as servers, must file a declaration of citizenship. The declaration must accompanied by proof of citizenship or rights to work in the U.S.
The application process takes several weeks, and with the recent move of the Tennessee ABC in Nashville, approvals may take longer.
Tennessee Beer Permit
The beer board process varies depending on the city. Nashville, Johnson City and Memphis have more complicated rules for beer and obtaining a permit requires attention to detail.
Many cities have a fairly simple process for obtaining a beer permit.
The application fee for a beer permit is $250 and the annual beer permit tax is $100.
Most beer boards have distance requirements from churches, schools, residences and other places. Site selection should definitely examine distance requirements.
Oddly, there is no distance requirement for a Tennessee liquor license. There are restaurants that have a license to sell wine and spirits, but cannot sell beer because they are too close to a house, church or school.
Almost every Tennessee Beer Board hears applications at a public meeting, and many require a representative to be present at the meeting. Beer boards generally do not grill applicants at the meeting, but may ask questions about sales to minors and intoxicated persons.
The application process for beer takes three weeks for many beer boards, and as long as three months for cities like Johnson City. The timing of beer board approval should be carefully considered for new applicants.
2013 Tennessee law defined Tennessee Whiskey as hooch that is charcoal maple filtered and aged, like Jack Daniels.
Modern moonshine is not made like Jack Daniels. Moonshine does not meet the new definition of Tennessee Whiskey. Moonshiners worried about labeling their spirits as Tennessee White Whiskey and other variations.
We previously blogged about the pitfalls of the new Tennessee Whiskey law.
Under new Tennessee liquor laws, legal moonshine distilleries are popping up all across the Volunteer State. Many want to label their hooch as Tennessee Unaged Whiskey, Tennessee White Whiskey or some other variation of the Tennessee whiskey name.
The new moonshiners are following time-honored methods of generations of illegal Tennessee distillers. The lore of illegal moonshining in Tennessee has become a marketing tool.
Dolly Parton’s tune “Daddy’s Moonshine Still” reminds us that moonshining was not always a star-studded career:Folks say my daddy wasn’t much of a man For disobeying the laws of the land Folks say that my daddy wasn’t fit to kill Oh and I know it was true what the people said Cause we’d all’ve been better of dead Than to live a life of shame and strife Cause of daddy’s moonshine still
ABC Director Keith Bell has informally advised that the descriptive terms “Tennessee White Whiskey,” “Tennessee Corn Whiskey” and “Tennessee Unaged Whiskey” are not prohibited by the new Tennessee Whiskey law.
Ole Smoky Distillery has been a big boost for tourism in Gatlinburg. The distillery proudly boasts: “Ole Smoky is the first federally licensed distillery in the history of East Tennessee.” Ole Smoky founders have picked up on the popular cultural fascination with moonshiners and have apparently struck gold.
Nearby neighbor Pigeon Forge has been a reluctant supporter of alcohol. Pigeon Forge residents voted against liquor-by-the-drink in restaurants two times in recent memory. According to local media, Pigeon Forge “voters on Thursday (March 14, 2013) approved the sale of liquor 952 to 798. This is the 4th time in four years that they have voted on the issue.” The third vote went closely for liquor, but led to a lawsuit alleging that folks not residing in Pigeon Forge cast votes for the law.
We think that locating a successful distillery in Pigeon Forge could be a cash cow. Local newspaper The Mountain Press has a story about a potential distiller here.
The new distillery law has an opt out provision that allows cities like Pigeon Forge to prevent distilleries from opening in the city. Pigeon Forge could stick to its family values and opt out of the new state law.
With a huge tourism base, we are carefully following this issue. Stay tuned for more.
David Bowie embraced change in his 1971 underground hit “Changes”Turn and face the strange Ch-ch-changes
The Tennessee ABC seems to have “Changes” on heavy rotation in the office jukebox. There have been lots of changes.
Recently, we learned of new rules for filing retail off-premises, wholesale and distillery applications. We see the adoption of basic rules for these applications as a positive development, bring predictability to what many saw as a cryptic process.
Here are the basic new rules for filing a liquor store, wholesaler or distillery application:• Get your application mostly assembled (does not need to be totally complete, but you need basic documents and all financial documents) • Call local ABC office and speak with Rosemary/Virginia/Kathy/Jackie, whoever would work the file • Local employee will contact agent and the agent will call to set up time to meet with agent, ABC employee and applicant • “File” application at meeting, where agent will review financials and ask questions • Try to call about 4-5 weeks before ABC meeting date • Agent and ABC employee will work the file
The ABC is working out kinks with the process and we advise folks to contact the ABC more than 5 weeks out. We appreciate the adoption of formal rules for the application process and look forward to successful implementation of the new rules.
Many major retail stores in Memphis have failed the complicated distance requirement and cannot sell beer. We learned that Memphis recently adopted an ordinance that allows most major retailers to obtain beer permits, even if they are too close to a house or church.
The key is that alcohol sales must be less than 10% of gross sales. This should be easy for drug, grocery and big box retailers. We encourage folks that have locations disqualified for distance to take a new look and determine if the store now can be licensed to sell beer.