Carry-Out Alcohol and the Changing Dynamics of Bars of Restaurants in California
In California, like most states, it is illegal to drink alcohol in a public space. This prohibition on public drinking also affects how bars and restaurants can sell alcohol to the general public. Restaurants and bars rely heavily on alcohol sales to stay in business. On average, the revenue from alcohol can account for 20% – 25% of a restaurant’s income. The bar and restaurant closures have been sweeping in an attempt to control the pandemic. The shut down of in-person dining leading to the decrease of alcohol sales as people are no longer ordering beer, wine, or liquor with their sit-down meals. In July of 2020, it was estimated that 26,160 bars and restaurants closed, and, according to Yelp’s data, 16,000 of those closures have been permanent. Due to the closures, restaurants and bars have had to get creative in how they make money during this time.
In California, there are many different alcohol licenses. While most of these licenses allow for consumption of alcoholic beverages off the premises, there can be confusion on what that really means. Luckily, the California Department of Beverage Control has modified their requirements as a response to COVID-19 and have started to allow for more off premises consumption.
SERVING ALCOHOL TO-GO
In June of 2020, the California Department of Beverage Control rescinded the requirement that manufacture packaged alcoholic beverages can only be served in conjunction with bona fide meals for bars and restaurants. The department decided that it would allow pre-poured or pre-mixed drinks to be sold in conjunction with bona fide meals prepared on the licensed premises. A bona fide meal is defined by the California Department of Beverage Control as: “a usual assortment of foods commonly ordered at various hours of the day, that would be considered a legitimate meal; the service of prepackaged food like sandwiches or salads, or simply heating frozen or prepared meals, shall not be deemed compliant with a bona fide meal requirement.”
In October of 2020, the department suspended enforcement of prohibitions on sales of alcohol beverages to go (with bona fide meals), deliveries to consumers, free delivery, extended delivery services to midnight, drive-thru windows for off-sale transactions, and virtual wine tastings. The June and October guidelines and suspension of certain rules give retailers a broader ability to sell to consumers and hopefully allow restaurants and bars to avoid permanent closure. While there is a requirement for a bona fide meal to accompany to-go beverages, the requirement is not overly strict.
The bona fide meal requirement does not mean that every sale of an alcoholic beverage has to be in conjunction with a bona fide meal, it is just highly recommended. The California Department of Beverage Control says that beverages should not be provided to a customer that does not partake in meal service on the premises, but it is not required.
A NEW BUSINESS MODEL
In order to survive the pandemic, restaurants and bars will need to turn to alternate business models, which will include delivery of food and alcohol. In San Francisco, even the iconic House of Prime Rib, after some initial hesitation, started offering to-go meals. Offering alcohol to-go, either with meals or on its own, allows restaurants to recoup some of the losses that come from having a closed dining room. While the California Department of Beverage Control has currently relaxed the usual restrictions, business owners will need to keep themselves informed of the changing rules in order to take full advantage of the new guidelines, while making sure they don’t violate them as well.
DISCLAIMER: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. This blog should not be used as a substitute for legal advice from a licensed attorney in your jurisdiction. Information on this website may not constitute the most up-to-date legal or other information.