Wine In Grocery Stores May Be Headed for Major Roadblocks in Memphis

By - March 27, 2014 | Alcoholic Beverage Law | Email Will Cheek

Tennesseans are generally excited about the prospect of wine in grocery stores, which we lovingly refer to as WIGS.  Most folks are oblivious to crucial details in the liquor laws that will play out over the next few years.  Some of the details will be quite unpopular.

Memphis could be a huge disappointment for fans of WIGS.

Janis Joplin captures the sentiment:

Why can’t I love you, baby ?
You try to block my road
You try to block my road. Hey

Although WIGS destroyed many longstanding rules for liquor stores, WIGS did not eliminate local distance requirements.  Memphis has a 1,500 distance requirement between liquor stores and churches, schools, parks and libraries.  1,500 feet is nearly one quarter mile, significantly further than most restrictions in major Tennessee cities.

Complicating matters are the number of mega-churches in Memphis that tend to locate near major intersections, which are also the preferred location for Kroger, Target and Wal-Mart.  The distance issue is so bad in Memphis that recent legislation created an exception for food stores from the 250 foot rule for beer.

A trusted surveyor in Memphis noted that without a change in Memphis law for grocery stores, lots of groceries will not qualify for wine licenses.

We see this as one of many important “kinks” that will need to be ironed out before WIGS rolls out in July 1, 2016.

How to Prevent Sales of Alcohol to Minors

By - March 25, 2014 | Alcoholic Beverage Law | Email Will Cheek

Tennessee has really cracked down on sales of liquor to minors.  A second sale of beer, wine or spirits to minors often results in 10 to 14 day suspensions from both the local beer board and the Tennessee ABC. Tennessee imposes strict liability for sales to minors – if the minor was served, the license holder is guilty, regardless of the circumstances.

Sales to minors conjures up Aerosmith’s hit ‘Walk This Way’

Schoolgirl sweetie with a classy kinda sexy little skirt’s climbin’ way up her knee.

How do I prevent sales to minors?  Here are some basic tips.

1. Training.  The TABC requires training for all servers.  License holders should seek out the best trainers   There is no reason to send your staff to crummy courses, and there are lots of crummy courses out there.

2. Strict Policies.  We find that firing an employee that sells to a minor sends a strong reminder to staff.  Adopt a written policy about sales to minors and act quickly to terminate an employee that sells to a minor.

3. Reminders. Frequent reminders of carding rules are good, but servers do not seem to remember minimum age dates well.  LED clocks with the dates seem to help, and these are available through many beer wholesalers.

4. Lighting. We old folks know how hard it is to read small print without enough light.  Invincible 20-somethings do not.  Make sure areas where servers card are well lit.  If not, improve lighting, provide good flashlights or require servers to read IDs in a brighter area.

5. Under 21 IDs. For folks that follow the procedures above, we find that the most common mistake is misreading the date on an ID.  Tennessee drivers licenses clearly indicate that a person is under 21.  We have been recommending that license holders consider a policy that requires a secondary check of all IDS with the under 21 mark.  These are the IDs that are leading to most compliance check violations.  The universe of over 21 patrons with an under 21 ID is relatively small.

A simple policy is to require servers to obtain manager approval before serving to anyone presenting an under 21 ID.

Punching in the birth date into the POS system can also help, but only if the server looks at the ID twice – when checking the ID at the table and when punching in the date.  Keep in mind that the server could easily misread the ID twice.

6.  The Hawaii Five-0 Defense. Look the patron in the eye and ask “are you 21?” Although the infamous Five-0 Defense will get you laughed out of criminal court, if an undercover informant lies to the server about his or her age, a beer board or the ABC may reduce the penalty or dismiss the citation.

If you have other successful strategies to prevent sales to minors, please share with us at wcheek@bonelaw.com.

Tennessee ABC Announces Citation Gauntlet for Nashville, Murfreesboro, Clarksville and Other Middle Tennessee Liquor License Holders

By - March 25, 2014 | Alcoholic Beverage Law | Email Will Cheek

At today’s March 25, 2014 ABC meeting, Director Keith Bell informed the Commission that for two to three days in April, almost all of the TABC agents in Tennessee will converge on Nashville for a training exercise.  The agents will be conducting a large number of compliance checks.  We expect agents to primarily be looking for sales to minors, but given recent enforcement action by the ABC, the checks could include a broader array of liquor rules.

These checks could target restaurants, bars, hotels, liquor stores, wholesalers and distilleries. Tennessee license holders are encouraged to be extra vigilant during the month of April and not be surprised if two or more TABC agents show up at the same time.

Conjures up the 1957 hit by Elvis Presley:

The warden threw a party in the county jail
The prison band was there and they began to wail
The band was jumpin’ and the joint began to swing
You should’ve heard them knocked-out jailbirds sing

 

Red Tape Monthly Inventory Becomes for Real for Tennessee Restaurants, Bars, Hotels and Venues

By - March 23, 2014 | Alcoholic Beverage Law | Email Will Cheek

We hear from reliable sources that the Tennessee Department of Revenue will require a monthly inventory when LBD tax returns become due starting April 15, 2014.   We first blogged about it here.

Although the requirement was created to resolve problems with LBD audits, we have heard from licensees of all sizes, from local proprietors to huge restaurants brands, about a variety of problems with the new requirement.

Brings to mind Kenny Chesney’s hit “No Shoes, No Shirt, No Problems”

Want to soak up life for a while in laid back mode
No boss, no clocks, no stress, no dress code
And no shoes, no shirt, no problems
 

Revenue has a draft of the form for the audit LBD Audit.  Stay tuned for more as this fascinating tale unfolds.

Simplifying LBD Tax Audits Translates to Monthly Inventories for all Tennessee Restaurants, Bars, Hotels and other LBD Venues

By - March 04, 2014 | Alcoholic Beverage Law | Email Will Cheek

The Tennessee tax man has announced that as of March 2014, monthly liquor-by-the-drink tax returns must include a beginning and ending inventory. According to instructions from the Tennessee Department of Revenue, a monthly statement should include inventory by brand name, size and dollar value of alcoholic beverages on hand the last day of each month. Read more here.

It’s time to crank up The Who’s “Success Story:”

Away for the weekend
I gotta play some one-night stands
Six for the tax man, and one for the band

The monthly inventory was part of the solution to significant problems with the LBD audit process. Anyone audited by Revenue knows how painful and time-consuming an audit was under the prior system.

Information concerning the new audit procedures is here. We applaud industry representatives and Revenue for working to conquer the audit beast.

For many, the cure may be more painful than the disease. Owners of multiple concepts or multiple locations may have to hire outside staffing to fulfill the inventory mandate. Keep in mind all inventories must be completed at the same time.

Bevinco has already sent out a solicitation to assist with the monthly inventory process.

We have identified a couple of problems with the audit process. The instructions provided by Revenue require that monthly statements “include inventory by brand name, size and dollar value of alcoholic beverages on hand the last day of each month.” The tax form will only have two new lines, one for beginning and one for ending inventory. Do the monthly statements get filed with the monthly tax returns?

On the last day of each month, many licensees do not close until the wee hours of the next day. Certainly, Revenue does not expect a bar owner to stop selling at 11:59 and count all the bottles.

We hope to have responses to these questions soon. In the meantime, if you see additional issues with the new monthly inventory process, please e-mail us here.

If you would like to have your voice heard at Revenue, contact Wyla Posey Porcello at (615) 741-8499, or via e-mail here.  Sources at Revenue say that the new inventory requirement has stirred up some internal “discussions” at Revenue.