NY: Pandemic-Driven Takeout, Delivery Privileges Expire
New York Gov. Andrew Cuomo ended the state’s state of emergency on Thursday, which meant the expiration of delivery and to-go privileges granted to breweries, bars and restaurants during the pandemic.
“This will mean the end of the temporary to-go and delivery privileges for bars, restaurants, and manufacturers,” the New York State Liquor Authority wrote in an update. “The resumption of those privileges only as they exist under the law, e.g., on-premises retailers may sell beer, cider, and mead to go or for delivery, and manufacturers may generally make sales only to persons physically at the premises.”
In addition to the loss of delivery and to-go privileges, breweries and other on-premise licensees also lost the ability to expand their service area to outdoor spaces beyond the space their licenses cover.
Home delivery and to-go sales were lifelines for breweries, bars and restaurants during the pandemic, which were forced to operate at reduced capacity for most of 2020 and several months of 2021. Many on-premise businesses are still clawing their way back. Zach Mack, owner of New York City’s Alphabet City Beer Co., a craft beer bar, pointed out the disadvantages the hospitality industry faced for the last year-plus.
And of *course* lawmakers immediately forget that restaurants and bars have a cool 15 months of revenue to make up for right as the pandemic is winding down. Out of sight, out of mind, baby!! https://t.co/9uSjkgWiz1
— Zach Mack (@zmack) June 24, 2021
“The delivery business single handedly kept our business solvent for the past 12 months,” Manhattan-based Torch and Crown Brewing marketing director Chris McClellan told Brewbound.
Torch and Crown relied on home delivery throughout the city while its brewery and taproom was under construction ahead of its late October 2020 opening. However, the company planned to keep DTC sales as a major part of its business. Those sales were key to building the brewery’s brand before its taproom opened.
“We see ourselves as potentially one of the largest direct-to-consumer breweries in the country, both because of our positioning in the market — where we are in New York City, customers are used to getting things delivered — and also just because we wanted to invest in it so heavily,” McClellan said. “We were one of the first movers in the space initially.”
Since pandemic on-premise restrictions have lifted, Torch and Crown’s delivery volume has decreased, “but it has certainly not gone away in any way,” he added.
“We see the direct-to-consumer channel as both something of a novelty for customers initially, but there’s a massive amount of growing demand for that particular business,” McClellan said. “Buying direct from breweries and then getting it delivered to your front door is something people appreciate, so we have a core group of very strong and passionate and consistent customers that we work with.”
In an email to members Wednesday evening, New York State Brewers Association (NYSBA) executive director Paul Leone noted that Cuomo had “once again made a sudden and unexpected decision” and admitted the move “caught us by surprise.” Leone reassured members that the SLA would be sympathetic to breweries given the abruptness of the changes.
“The SLA understands the suddenness of this decision by the governor,” he wrote. “You shouldn’t worry about a crackdown to occur immediately but you should make plans to adjust accordingly.”
Fast-moving policy changes have been an albatross for Empire State breweries since the pandemic began.
New York breweries have the ability to obtain licenses that will allow them to continue shipping and delivering beer, Leone wrote in his update. They can also apply for an alterations permit to keep their expanded space.
With an on-premises retail license, a brewery can deliver to New York residences with a vehicle registered to the licensee or through a third-party service, and ship in-state and to states that accept interstate shipments of alcohol.
“It gives you so much more freedom,” Chris Spinelli, co-owner of Rochester-headquartered Roc Brewing and NYSBA treasurer and board member, told Brewbound. However, he acknowledged the cost of the license and the food service requirement that comes with it may be daunting for some breweries.
A two-year on-premise retail license costs $4,354 in all New York City boroughs except Staten Island; $3,072 on Staten Island and in Buffalo, Rochester, Syracuse and Yonkers; $2,432 in Albany, Mount Vernon, New Rochelle, Schenectady, White Plains and Utica; and $1,792 everywhere else in the state.
The discrepancy in price underlines the tension between New York City and the rest of the state. Breweries in both communities have vastly different needs and operations.
For Roc Brewing, delivery was a non-starter, Spinelli said. The brewery experimented with the service for about two weeks, but found its consumers were more interested in purchasing Roc Beer from other retailers, such as Wegmans. However, Spinelli understands how vital the privilege was for fellow brewers in New York City.
“It’s this weird line where we’re trying to support the whole state, but we also have New York City which is its own beast — it has its own limitations — and so we’re working through all that stuff,” he said. “I don’t think delivery is ever really going to be on the table, unless someone like the retailers pick that up. They would have to really push that kind of legislation forward.”
DTC delivery and shipping is a hot topic among all three tiers in the state, but for different and sometimes not obvious reasons, Spinelli said.
“The wholesalers are very anxious about direct-to-customer shipping, and it’s fair,” he said. “Their biggest concern isn’t necessarily us, because the reality is they know that none of our businesses are necessarily set up for this shift to customer shipping and the few that are aren’t going to go through distribution as it is.
“Their bigger concern, and rightfully so — also a concern for us — is that Amazon or Whole Foods or some of these much bigger shipping companies are going to come in and undercut the distributor,” Spinelli continued. “Because if you have Amazon who ships it directly to your door, well then you’re not going to go to Wegmans or all the mom-and-pop shops and buy the beer.”
NJ: Spirits Tax Equivalency Legislation Pulled From Consideration … For Now
The New Jersey bill (S.B. 3452) that would have brought the state excise tax rate on spirits-based, ready-to-drink canned cocktails in line with beer has been pulled from consideration for now, sources confirmed with Brewbound.
The proposed legislation, sponsored by Senate president Stephen Sweeney, would cut the state excise tax rate on ready-to-drink canned cocktails from $5.50 per gallon to $0.12 per gallon. After initially calling for a threshold of up to 8% ABV, the measure was amended to lower the tax rate for hard liquor of less than 9.9% ABV.
Those proposed changes have met strong opposition from beer industry trade groups, manufacturers and state guilds. Nevertheless, the measure has moved through the state Senate.
Last week, the measure “reported favorably” out of the Senate Budget and Appropriations Committee on a 10-1-1 vote. The bill passed out of the Senate Law and Public Safety Committee in May.
Although the legislation appears to be off the table for the time being, it’s far from dead. Lawmakers still have three days to consider it before they recess for the summer. And the legislation is expected to come back under consideration in the fall following state elections.
PA: Cocktails To-Go Permanence Threatened by Attempts to Expand RTD Spirits Sales
Pennsylvania Gov. Tom Wolf supports making sales of cocktails to-go permanent, however attempts to expand sales of spirits-based ready-to-drink canned cocktails is threatening to poison pill the legislation (H.B. 1154), according to the Pennsylvania Capital-Star.
On Thursday, the state House of Representatives passed the measure after stripping out language that would have expanded the sales of spirits-based RTDs to restaurants, bars, grocery and convenience stores. State law allows beer wholesalers to sell malt-based RTDs, but spirits-based offerings are required to be sold through state-run Pennsylvania Liquor Control Board stores.
The measure has been sent back to the Senate, and Wolf has threatened to veto the measure should it be amended again with expanded spirits-based RTD sales privileges.
In addition to cocktails to-go, the legislation would allow restaurants with extended outdoor premises to remain through 2022, as well as receive unlimited catering permits.
The measure is expected to go before the Senate’s Rules & Executive Nominations Committee today.
RI: Legislature Approves Extension of Alcohol To-Go Sales
Rhode Island lawmakers this week approved legislation (Senate bill and House bill) that would extend takeout alcohol sales from Class B liquor license holders and brewpubs through March 1, 2022, according to What’s Up Newp. The measure is now awaiting a signature from Gov. Daniel McKee.
The measure will permit the sale of two 750 mL bottles of wine, 72 oz. of mixed-wine drinks, 144 oz. of beer, and mixed drinks containing no more than 9 oz. of distilled spirits. Each offering must be sold in factory-sealed or sealed containers.
The measure does not permit delivery of alcoholic beverages.
CO: Governor Extends Alcohol To-Go
Colorado Gov. Jared Polis has signed a law extending the sales of alcohol to-go sales for takeout and delivery through July 2025, according to The Denver Post.
The law (H.B. 21-1027) will allow restaurants to sell two bottles of wine, a liter of spirits or two 6-packs of beer.