VA: Could changes be coming to Virginia’s alcohol-ratio law for restaurants?
By Mechelle Hankerson
September 19, 2018
Sen. Bill DeSteph used to visit a restaurant in Arlington for a $50 glass of tequila.
The Republican senator from Virginia Beach likes high-end tequila, he said, but his go-to spot in Northern Virginia closed.
Sen. Bryce Reeves, R-Spotsylvania, once visited a restaurant in Washington D.C. that served expensive craft spirits hand-picked from North Carolina. He learned the restaurant used to be in Virginia, but couldn’t do business under the state’s mixed-drink ratio law, so it relocated.
“I would love to have him here,” Reeves said this week at the Senate subcommittee on alcoholic beverage control.
In the past, lawmakers like DeSteph and Reeves have tried to make it easier on restaurants by changing the state’s ratio law, which requires 45 percent of a restaurant’s sales to come from food and drinks without liquor. Beer and wine don’t count when calculating the ratio.
It’s been an issue for at least the five years Reeves has been on the subcommittee, and gets even more complicated as trends in the restaurant industry change.
This summer, the subcommittee has worked on tweaking regulations for restaurants that specialize in expensive, specialty liquor. In some places, glasses of liquor can go for thousands of dollars — making it extremely difficult for restaurants to sell enough food to comply with the ratio.
“We do need to find a way to accommodate for those business models,” DeSteph said. “We have more of that coming and we have to figure out how to deal with that.”
DeSteph has introduced legislation in the past to try to alter the ratio, but it wasn’t successful.
Staff from the Virginia Department of Alcoholic Beverage Control presented new options for the subcommittee to consider this week to address long-standing concerns about the ratio law.
The proposal keeps the ratio in place, but would calculate it based on the volume of alcohol sold at restaurants, not the dollar value of alcohol sales.
Staff estimated that for every liter of liquor sold, an establishment would have to sell between $79 and $98 worth of food.
“It would no longer be a matter of business with different pricing structures being treated differently under the ratio,” said ABC Chief Executive Officer Travis Hill.
Staff also proposed that if restaurants meet a minimum food-sales threshold, they wouldn’t have to operate under the ratio. If the minimum ratio was set at $300,000 a year, about 76 percent of the state’s restaurants wouldn’t need to worry about the ratio, Hill said.
At $500,000, which was noted in a presentation, most chain restaurants would qualify but ABC staff didn’t have data on how many establishments that included.
In addition to possible changes to the ratio, ABC staff will immediately start a study of retail, wholesale and manufacturer licensing and fees. It’s scheduled to be completed next May.