I Got Some Action at the August Tennessee Alcoholic Beverage Commission Meeting

By - August 26, 2014 | Alcoholic Beverage Law | Email Will Cheek

Today’s August 26, 2014 Tennessee Alcoholic Beverage Commission meeting featured some notable firsts.  We like it when the ABC takes action in unchartered territory.

Reminds us of the classic disco tune “I Love The Nightlife” by Alicia Bridges from Adventures of Priscilla: Queen Of The Desert:

I want some action, I wanna live
Action, I got so much to give
I want to give it
I want to get some too
 
I love the nightlife, I got to boogie
On the disco ’round, yeah
I love the nightlife, I got to boogie
On the disco ’round, yeah
 

Wineries.

Bootleggers Homemade Wine LLC in Gatlinburg was approved for the first satellite winery under new 2014 legislation PC 1015.  Bootleggers will open a satellite store in nearby Pigeon Forge.

The satellite winery law allows Tennessee wineries to open up to two additional retail stores for tastings and sales of bottles and merchandise.  Satellite wineries cannot make or bottle wine.

In addition, the new winery law allows wineries to hold a restaurant or limited service restaurant LBD license.  Previously, winery owners were prohibited from owning a restaurant.

We see the new privileges as being very positive for the winery business in Tennessee.

Wholesalers.

Tennessee passed legislation that significantly expanded the location of liquor wholesalers.  The new law allows liquor wholesalers to be located in any “county in which the voters of any municipality or other jurisdiction within that county have approved retail package sales or consumption of alcoholic beverages on premises by referendum as provided in this title.”

Holston Beverages was the first wholesaler approved by the Tennessee ABC under the new law.  Holston primarily serves the tri-cities: Kingsport, Johnson City, and Bristo.  Previously, state law required Holston to be located in Knoxville.

Bone McAllester Norton Alcoholic Beverage team member Rob Pinson represented Bootleggers and Holston today at the ABC.

License Revocation.

In what we believe to be a first for the Commissioners appointed by Governor Haslam to the Tennessee Alcoholic Beverage Commission, Commissioners voted to revoke the liquor license of a retail liquor store. The manager was accused of lying to the ABC in connection with a no buy, based on a falsified letter.

The take away is never ever lie to the ABC.  Whatever you may have done, it most likely pales in comparison to the punishment you will get from trying to conceal the truth from the ABC.

Good News for Trendy Cocktails in Tennessee

By - August 22, 2014 | Alcoholic Beverage Law | Email Will Cheek

Infused alcoholic beverages became headline news last year as the Tennessee Alcoholic Beverage Commission questioned the legality of infusing for cocktails. Industry members and the TABC reached a compromise that became Tennessee law this summer.

We repeatedly hear two questions about the Tennessee infusion law:

1. The law limits infusions to a 10 day period.   When does the 10 day limit begin – when the infusion process begins or when the infusion is ready to be sold to the public?

2. How are bitters treated?

Conjures up the 1967 Cream classic Strange Brew:

Strange brew, kill what’s inside of you.
She’s a witch of trouble in electric blue,
In her own mad mind she’s in love with you
 

Reliable sources tell us that the ABC says that the 10 day period for infusions begins when the infused product is offered for sale.  This gives cocktail connoisseurs time for lengthy infusion processes, perhaps even including barrel aging.  We thought that 10 days was too short to properly infuse and sell all infused product.

Recently, bitters have emerged as a subject of discussion among the ABC and industry members.

Personally, we think bitters are non-beverage under federal law, and therefore are not alcoholic beverages subject to ABC jurisdiction.  Non-beverage products contain alcohol, but are not drinkable.  Think of peppermint extract, which is around 180 proof, or Scope.  Both have significant amounts of alcohol, but are not regulated as alcoholic beverages.

We understand that the liquor wholesalers are pressing the Tennessee ABC to require that bitters be distributed by liquor wholesalers and only sold at liquor stores.

In our humble opinion, this is plainly wrong.  Will the wholesalers’ next target be cooking wine or Calvin Kline Eternity perfume?

Brings to mind another classic rock song, this time from The Beatles:

You say you want a revolution
Well, you know
We all want to change the world
 

We hear that the ABC is moving toward a position that will allow barkeeps to continue making and using house-made bitters.  We see this as great news.  Nashville is reaping the benefits of being a trendy designation for tourists.  The freedom to serve cutting edge cocktails is an important part of pleasing trend-setting tourists.

Tennessee Liquor Stores Given Free Booze for Tastings

By - August 17, 2014 | Alcoholic Beverage Law | Email Will Cheek

The Tennessee Wine in Grocery Stores law was a game changer on many levels.  One obscure victory for retail liquor stores is the ability for distilleries and importers to donate product for tastings at retail liquor stores.

Tennessee liquor stores earned the right to conduct tastings in 2011.  We blogged about the new law here.

The Tennessee ABC cracked down on free liquor beginning on July 1, 2014.  Only nonprofits and liquor stores tastings can receive free liquor under Tennessee law.

The crackdown on free liquor was a big change for the Tennessee liquor industry.  Reminds us of a classic Beastie Boy tune about rebellion:

Yo ho ho and a pint of Brass Monkey
And when my girlie shakes her hips she sure gets funky
Skirt chasin’, free basin’, killin’ every village
We drink and rob and rhyme and pillage

 

Retail liquor stores scored a number of huge victories in the WIGS battle and we commend their lobbyist David McMahan for making the best out of WIGS. Grocers cannot conduct tastings, much less receive free product for doing so.

What Can I Sell at My Tennessee Retail Liquor Store?

By - August 10, 2014 | Alcoholic Beverage Law | Email Will Cheek

The Tennessee Wine in Grocery Store law, which we affectionately call WIGS, allows Tennessee liquor stores to sell a list of very specific items.  We understand that this list was the result of complicated and contentious negotiations.

We find it most interesting that before the specific list is a lawyerly phrase that gives enormous flexibility about what a retail liquor store can sell:  “Such items may include but are not limited to.”

Hank Williams’ classic “All My Rowdy Friends” comes to mind for no apparent reason:

And the hangovers hurt more than they used to
And corn bread and iced tea took the place of pills and 90-proof
And it seems like none of us do things quite like we used to do
And nobody wants to get high on the town
And all my rowdy friends have settled down

 

The list of items approved for sale at Tennessee retail liquor stores is quite specific.

Printed or video material related to alcoholic beverages or food
Utensils and supplies related to alcohol, including corkscrews, strainers, pourers, flasks, wine racks, etc.
Gift cards, packages and baskets
Nonalcoholic beverages, such as water, soft drinks, red bull, mixers, etc.
Kegs and growlers of beer, wine and possibly liquor (be aware of TTB restrictions and licensing requirements for liquor and wine)
Beer and wine-making kits and related products and supplies
Lemons, limes, cherries, olives, etc.
Peanuts, pretzels, chips, cheese, crackers and other snack foods
Coolers, ice chests and ice
Party supplies, decorations, bags, greeting cards, etc.
Articles of clothing and accessories related to alcoholic beverages
Combined packages of multiple alcoholic beverages
Cigarettes, cigars, lighters, etc.
Lottery tickets

 

Gas, for example, was excluded from the list, presumably by convenience stores.  Bread, milk and other food staples was excluded for grocery stores.

From a legal perspective, saying “include but are not limited to” suggests that the list should be read broadly.

For example, WIGS allows the sale of tobacco products.  Can a liquor store also sell e-cigarettes and other vaping devices?

Does “Peanuts, pretzels, chips, cheese, crackers and other snack foods” include stuffed olives, pate, humus, smoked sausages and cocktail shrimp?

Does party supplies include rented chairs, tables and tablecloths?

Given the Tennessee ABC’s strict construction of liquor laws and large monetary fines for alleged violations, retail liquor store owners have good reason to worry that deviating from the specific list is fraught with danger.

The compromises that lead to the passage of WIGS includes new opportunities for retail liquor stores.  It will be interesting to see how broad the Tennessee ABC will construe these privileges and how profitable the new lines of business will be for stores.

Where Is My Wine in Tennessee Grocery Stores?

By - August 06, 2014 | Alcoholic Beverage Law | Email Will Cheek

Tennessee’s Wine in Grocery Stores law, which we affectionately call WIGS, is deep into its next test.  Will enough local voters sign petitions to place the local option election authorizing WIGS in your city or county on the ballot for approval?

Whilst Tennessee wallows in the WIGS battle, we hear Pink Floyd singing:

Tired of lying in the sunshine staying home to watch the rain
You are young and life is long and there is time to kill today
And then one day you find ten years have got behind you
No one told you when to run, you missed the starting gun 

 

WIGS legalized wine in food stores.  But each city or county must have a local option election to authorize the sale of wine in food stores.  To place the local option on the ballot requires the signatures of 10 percent of the residents that voted in the last gubernatorial election.

Petitions must be completed and shared with the local election commissions by August 21 to be on the ballot for November 4th elections.

Although WIGS is hugely popular, the local option requirements pose a problem for some cities.

Confusion about WIGS complicates the local option process.  In Memphis, the Memphis Business Journal declared victory for wine, although WIGS insiders know Memphis is far short.  On average, about half of the signatures on wine petitions are from folks that do not vote in the city where they sign the petition, or are not registered voters.

The failure of Memphis to approve WIGS could be a huge setback for Memphis food stores that compete with grocers in Germantown, Bartlett and other suburbs.  Memphis is about half way to having enough petitioners to place WIGS on the ballot.

In addition, we have real concerns that Memphis voters may not approve WIGS at a popular election.

Other Tennessee cites are more promising for WIGS.  According to reliable sources, the following have enough signatures to place WIGS on the November 4 ballot:

 Alcoa
Brentwood
Bristol
Church Hill
Clarksville
Clinton
Dunlap
Dyersburg
Fairview
Farragut
Gallatin
Gatlinburg
Greeneville
Harriman
Hendersonville
Jonesborough
Kingsport
Kingston
Unincorporated Knox County
Knoxville
Lebanon
Lenoir City
Loudon
Maryville
Morristown
Mount Juliet
Murfreesboro
Newport
Oak Ridge
Oakland
Paris
Pleasant View
Rogersville
Sevierville
Smyrna
Spring Hill
Thompson’s Station
 

We understand that WIGS is close to having enough signatures to be on the ballot in Nashville, Brentwood, Franklin and Hendersonville.  Same with Chattanooga.

But the August 21 petition deadline is just days away.  Wine in Tennessee grocery stores is at a critical crossroad in many cities.  Although WIGS is largely about convenience to customers, the failure of a city to approve WIGS will be a huge blow to grocers trying to compete against grocers in neighboring cities.