Lawmakers finalizing draft bill that would get rid of the liquor ratio for most restaurants

Lawmakers are getting closer to finalizing proposed legislation to change Virginia’s alcohol-control laws, including the mixed-drink ratio rule that limits liquor sales and essentially prevents full-fledged bars from operating in the state.

This week, the Senate’s Subcommittee on Alcoholic Beverage Control has drafted a bill that would exempt restaurants that sell more than $500,0000 in food each year from the ratio law.

Currently, restaurants licensed to sell liquor have to prove that 45 percent of their annual sales come from food, among other requirements. Only 55 percent can be from liquor (beer and wine are excluded from the ratio).

Under the draft legislation, restaurants that make less than $500,000 a year from food sales would still have to adhere to the ratio.

About 59 percent of the state’s restaurants would no longer have to abide by the ratio rule if the bill is passed as currently written, said David May, senior attorney in the Division of Legislative Services.

The subcommittee will likely meet two or three more times to iron out details of the bill and other directions to ABC, said Sen. Bill DeSteph, R-Virginia Beach, the chairman.

“I think what we have here is a great starting point,” he said.

The draft legislation is the culmination of work the subcommittee has done since the end of the last General Assembly session.

Most of the conversations have focused on simplifying the licensing process for restaurants that want to serve liquor and making changes to the liquor ratio rule, which is tough to enforce and is difficult, if not impossible, to comply with for businesses that primarily serve high-end, craft spirits.

Eliminating the ratio requirement for a large number of Virginia’s restaurants would free up limited enforcement agents, May told the subcommittee. ABC administers alcohol-related laws in the state, operates more than 365 stories selling distilled spirits and also has a law enforcement division with sworn officers who make sure rules are being followed.

Michael Byrne, a member of the Virginia Restaurant, Lodging and Travel Association, disagreed with the notion that loosening the ratio law would help with enforcement. He told the subcommittee on Wednesday that would require more enforcement, not less.

Byrne, who has spent the last few months defending the ratio law to the subcommittee, helped defeat past efforts to change the ratio and has said the rule helps ensure public safety.

In addition to changing the ratio rule, the subcommittee wants to:

• Establish a mixed beverage craft cocktail restaurant license that would regulate businesses through an alcohol volume ratio instead of sales ratio.
• Direct ABC to study its dozens of licenses and consolidate the list.
• Change the wording of a state law so that localities have to vote by referendum to be “dry,” meaning they do not allow liquor service at restaurants. “We would make Virginia (by) default, wet,” May said. Right now, localities have to vote to allow liquor sales in restaurants, and many did so in the 1960s, but there are still dry counties in the western part of the state.
• Create a penalty for restaurants that don’t file the required paperwork proving adherence to the ratio rule.

The draft legislation could still change, and will have to make it through the General Assembly to become law.

The Virginia Mercury is a new, nonpartisan, nonprofit news organization covering Virginia government and policy.