More than a year since the COVID-19 pandemic first began, we are all familiar with the ways in which it has impacted industry in the United States. While it decimated brick and mortar businesses and caused thousands of bars and restaurants to close, it also propelled retail trends in e-commerce to light speed. “Direct to consumer” trends are impacting every industry, with consumer convenience as the primary objective.
The alcohol industry is among those irreversibly altered by the COVID-19 pandemic. Aside from the obvious pain caused to the bar and restaurant community, the same trends towards consumer convenience have gained substantial momentum. While some of those trends occurred organically as consumer demand shifted, the COVID-19 pandemic also spurred legislative efforts to loosen certain regulatory restrictions in Florida’s Beverage Law.
As a highly regulated industry, state-by-state beverage alcohol laws trace their origins to the repeal of “Prohibition” by the Twenty-First Amendment, and adoption of the “three-tier system” in the vast majority of states. With certain exceptions, the three-tier system segments the industry into three distinct and separate layers—producers, wholesalers, and retailers—creating a regulated environment whereby the interests of the different tiers are generally required to be separate, with regulations and restrictions aimed at each level. As one example, within the retail tier the Florida Division of Alcohol Beverages and Tobacco maintains dozens of varying licensure requirements depending on the types of alcohol a vendor seeks to sell to consumers, and distinguishing between sales for consumer consumption on-premise (think bars and restaurants) or off-premise (think liquor stores).
The 2021 Legislative session saw several notable bills aimed at loosening alcohol regulation in Florida, particularly at the retail and consumer level. One noteworthy bill that the Legislature passed was Senate Bill 46, aimed at easing restrictions on “craft distilleries” by increasing production limits to qualify as a “craft distillery” from 75,000 gallons per calendar year to 250,000 gallons per calendar year. The bill further allows a craft distillery to sell up to 75,000 gallons per calendar year directly to consumers at the
distillery, and creates opportunities for qualifying craft distilleries to operate in “destination entertainment venues” where they can be licensed to operate similar to a bar. Another bill, HB 6073, attempted to repeal Florida law prohibiting the sale of wine in containers larger than a gallon.
SB 46 and HB 6073 represent trends that have been developing for a number of years. The Florida Legislature previously carved out exceptions for craft distilleries to make direct to consumer sales, and this is not the first year that the industry has attempted to repeal the maximum container size for wine sales in Florida.
On the other hand, the Florida Legislature also passed SB 148 during this session, which
permanently permits restaurants and food establishments to sell “alcohol to-go” and was a direct result and response to the COVID-19 pandemic. In Florida, alcohol to-go was first legalized by Governor DeSantis as a temporary emergency measure included within his executive orders establishing Florida’s COVID-19 lockdowns. However, alcohol to-go was met with overwhelming public support, and the consensus among the industry is that it was key to survival for many businesses in the hospitality industry during the heights of the COVID-19 pandemic.
Development of Alcohol To-Go by Executive Order
Governor DeSantis first declared a state of emergency as a result of the COVID-19 pandemic on March 1, 2020. Like most states across the country, subsequent executive orders took further steps to avoid social gatherings. DeSantis’ March 17, 2020, executive order required all restaurants immediately limit occupancy to 50%, and ordered restaurants to follow other CDC guidelines about spacing between groups of patrons, limiting party sizes, and screening of employees for COVID-19 symptoms or exposures. That order further required all businesses that derive more than 50% of gross revenue from the sale of alcoholic beverages to suspend the sale of alcoholic beverages.
Three days later, on March 20, 2020, DeSantis issued another executive order that, among other things, suspended restaurants and food establishments from serving food for on-premise consumption, as well as the service of on-premise alcohol. However, DeSantis’ March 20, 2020 order did permit restaurants and food establishments to operate kitchens for the purpose of providing delivery or take-out services. Importantly, the March 20, 2020 order also permitted vendors licensed to sell alcoholic beverages on-premise, to sell alcohol to-go in “sealed containers” for consumption off-premise. The order contained particular guidance for restaurants licensed to sell alcohol under section 561.20(2)(a)4., permitting them to sell alcohol for consumption off-premise so long as it is in a sealed container and is accompanied by the sale of food within the same order, among other requirements.
Initially, there was substantial confusion among Florida bars and restaurants about what the executive order meant by “sealed container.” Some vendors were advised that “sealed containers” referred only to containers that were sealed by the manufacturer, thus prohibiting a bar or restaurant from mixing its own cocktails, pouring them into a container and selling them for consumption offpremise. That confusion was subsequently resolved, and it was clarified that the Division would not enforce any requirement that bars and restaurants were limited to beverages sealed by the manufacturer, and could in fact mix their own beverages and seal them for sale to-go.
Florida was not alone in instituting emergency measures to allow for alcohol to-go in response to the COVID-19 pandemic. More than 30 states and the District of Columbia allowed for some version of alcohol to-go in response to the pandemic, with eligibility requirements and restrictions varying state-bystate.
Legislation Making Alcohol To-Go Permanent in Florida
Alcohol to-go has been a lifeline to restaurants during the COVID-19 pandemic, and was perceived as so successful that in the fall of 2020 discussions began about legislation to allow restaurants to sell alcohol to-go on a permanent basis. In September 2020, DeSantis voiced support for legislation making alcohol to-go permanent and suggested that such action would likely be well-received by the Legislature as a result of the positive experience under the executive order.
Legislation designed to make the measure permanent was filed by several state Senators and Representatives, but shortly after the legislative session began it became clear that Senator Jennifer Bradley’s SB 148 was selected as the frontrunner in committee. After several amendments, SB 148 garnered a near-unanimous vote, being unanimously approved by the Senate and passing the Florida House by 111-1.
Under SB 148, alcohol to-go only applies to licensed restaurants or food service
establishments. Key features of the legislation include the following:
- The sale or delivery of alcohol must be accompanied by the sale of food in the same order;
- The alcoholic beverage must be in a “sealed container,” sealed by the licensee’s employees with an unbroken seal preventing consumption before leaving the premises;
- The alcoholic beverage must be placed in a bag or other container secured so that it is visible if the beverage has been opened or tampered with;
- A dated receipt for the alcoholic beverage and food must be provided and attached to the bag or container;
- Sales and deliveries of the alcoholic beverages may not occur after food service ends, or after midnight, whichever is earlier;
- If transported in a motor vehicle, the alcoholic beverage must be placed in a locked compartment, a locked trunk, or the area behind the last upright seats;
- If delivered to the consumer, Florida law must be complied with and the delivery must be made by someone over the age of 21.
In the event a restaurant or food establishment operates under a quota license, rather than under section 561.20(2)(a)4., the restaurant or food establishment only qualifies for service of alcohol for consumption off-premise if the charge for the sale of food and nonalcoholic beverages is at least 40% of the total charge for the order, excluding the charge for any manufacturer-sealed containers of alcoholic beverages included in the order.
Finally, SB 148 also amends current beverage law such that restaurants licensed to sell wine on premise may permit a consumer to remove one unsealed bottle of wine for consumption off-premise if the patron purchased a meal and consumed a portion of the bottle of wine on the premises. Similar to cocktails to-go, the restaurant’s employees must seal the bottle, it must be accompanied by a dated receipt, and if transported in a motor vehicle it must be stored in a locked glove compartment, locked trunk, or behind the last row of upright seats.
Trends toward consumer convenience will no doubt continue to dominate the retail sector in the United States, including in the alcohol industry. Alcohol to-go provided critical support to restaurants during the COVID-19 pandemic, but by passing SB 148 the Legislature also signaled an increased interest in loosening restrictions in Florida’s Beverage Law that may continue into the future.